Mutiny reports positive Deflector results

Mutiny Gold looks set to forge ahead with developing its Deflector deposit in the mid-west following positive results from a bankable feasibility study.

The company has announced its flagship project could become a 55,000 ounce per year operation and bring the company $171 million net profit.

Cash costs are estimated to be $617 per ounce; while an increase on the initial $524 per ounce estimate, it positions the project at the mid to lower end of the production cost scale.

The company said the feasibility study confirmed Deflector was a “low cost, premium” project.

 “Considering this is only an initial position given there is pending resource upgrade…the economics of the project are compelling,” it said in a statement to the Australian Securities Exchange.

Managing director John Greeve said production forecasts were expected to increase as drilling subsequent to that used for the feasibility study had shown further positive results.

“Mutiny expects that the revised feasibility study, incorporating recent drilling results will lift mining production with only marginal additional financial capital costs,” he said.

Forecast capital expenditure has increased from initial $52 million estimates to $87 million; $66 million to be spent on building the plant and $22 million on mine construction.

Mutiny secured $11 million in funding from Credit Suisse last year to finalise acquisition of the Gullewa Gold tenements, which includes the Deflector deposit, and to undertake the feasibility study.

The transaction also including a hedge facility in which Mutiny will deliver 50,000 ounces of gold to Credit Suisse at an average price of $1,847.

Gold was trading at $1,603 per ounce at the time of publication.

The company is intending to commence production in the final quarter of this year.

Mutiny bought the Gullewa tenements from Redhill Resources Corp (formerly ATW Gold Corp) for approximately $13 million.