Shares in Conquest Mining have plunged after a definitive feasibility study found the Silver Hill gold-silver-copper project in Queensland could not deliver commercial returns.
"The DFS outcomes has resulted in a project that would still be profitable but is now sufficiently robust to develop before offtake arrangements are finalised," the company said in a statement.
"In its current form, the project does not provide the board sufficient confidence to commit to a development timetable at this stage."
Key findings from the study estimated upfront capital cost would be $138 million with payback pegged at between two to 3.5 years and internal rate of return of between 29 per cent and 37 per cent.
The net present value of the project was estimated to be between $106 million to $133 million.
The study was based on an annual gold production of 60,000 tonnes for about seven years with cash costs estimated at $500 per ounce.
Conquest said it had appointed former Sino Gold chief Jake Klein to carry out a strategic review of the Silver Hill project and to consider alternative routes to production.
The review will assess other processing options, alternative financing structures, joint venture, acquisition and consolidation opportunities and establishing links with Chinese gold producers.
"Conquest remains confident that the Silver Hill project remains a strong and viable asset," the company said.
Shares in the company closed down 21 cents, or 46 per cent, to 25c today.
