Vertex Minerals (ASX: VTX) reports ‘stronger economics’ from updated PFS for Reward Gold Mine - Kalkine Media

February 27, 2024 12:19 PM AEDT | By Sonal Goyal
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  • The updated PFS for the Reward Gold Mine has increased NPV by 18%, IRR by 43% and free cash flow by 15%.
  • The study suggested decreased pre-production CAPEX by 40%.
  • The monthly gold production is averaged at 2,169 oz with 92% gold recovery over 23 months.
  • The capital required for pre-production stands at AU$17 million as acquisition of Morning Star Plant has resulted in significant savings.

Vertex Minerals Limited (ASX: VTX) has shared outstanding economics from the updated pre-feasibility study (PFS) for gold operations at its Reward Gold Mine, located in New South Wales. The indicated mineral resource estimate (MRE) for the Reward gold deposit is 70,500 ounces of gold while inferred MRE is 154,700 ounces.

The updated PFS for the Reward Gold Mine has increased NPV by 18%, IRR by 43% and free cash flow by 15%. 

Converting inferred to indicated resources via further drilling would improve the key financial metrics of the Project, believes the company. Opting to conduct a Pre-Feasibility Study (PFS) on the existing resource base is a result of the notably enhanced exploration drilling results anticipated from new development activities within the underground mine.

The positive outcomes from the PFS serve as a rationale for developing a mine plan which is expected to substantially improve the company's capacity to upgrade the inferred mineral resource by enhancing access. Importantly, it facilitates more efficient exploration of the mineralised corridor both below and along the strike of the current mineral resource.

Updated PFS demonstrates stronger economics

The updated PFS delivered positive results, including an increase of 18% in NPV, 43% in IRR and 15% in free cash flow, along with a drop of 40% in pre-production CAPEX and a 6-month payback period.

Key highlights of PFS –

  • The company can conduct mineral processing activities at the project for two years.
  • The project is expected to deliver gross revenue of AU$150 million with nearly AU$17 million (pre-production) of capital expenditure.
  • The pre-tax cash over the life of mine is AU$41 million at a gold price of AU$3,000 per ounce.
  • Consistent monthly gold production averages 2,169 ounces over a 23-month period, with a robust 92% gold recovery rate.
  • The annualised gold production amounts to 26,000 ounces per year.
  • The mine design adopts mechanised mining methods.
  • The intended processing involves 181,000 tonnes of material at a head grade of 9.3 g/t, targeting the recovery of 49,890 ounces of gold.
  • NPV at 7% is over AU$33 million pre-tax, IRR is 110% pre-tax and free cash flow stands at AU$41 million pre-tax.

To know about mineral processing at Reward Gold Mine, click here.

VTX shares traded at AU$0.088 apiece at the time of writing on 27 February 2024.


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