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Highlights
- Santana Minerals' Bendigo-Ophir Gold Project forecasts substantial gold output.
- Projected revenue of A$4.6bn with a post-tax NPV of A$1.06bn.
- Located on private land in New Zealand’s Otago region with Fast Track Approval designation.
Santana Minerals (ASX:SMI) has unveiled the Pre-Feasibility Study (PFS) results for its Bendigo-Ophir Gold Project, located in the Otago region of New Zealand. The findings indicate that this ASX gold stock development, projected to be high-margin with a lengthy operational life, could offer a profitable venture due to its cost-efficient approach.
The PFS details that the project combines open-pit and underground mining, estimating a production of 1.15 million ounces of gold over a span of 9.2 years. Annual production is expected to average around 125,000 ounces, solidifying Bendigo-Ophir as a steady contributor to Santana's growth strategy. This steady production could leverage the project’s efficient design and low capital expenses.
The mineral reserve estimate outlines a probable reserve of 15.5 million tonnes (Mt) with a grade of 2.37 grams per tonne (g/t), which translates to approximately 1.18 million ounces of gold. With current strong gold market prices, the study projects the All-In Sustaining Cost (AISC) at A$1,416 per ounce. This cost structure aligns well with projected revenues, positioning the project for substantial returns. Forecasts suggest a revenue of A$4.6bn and an EBITDA of A$3.1bn, based on an assumed gold price of A$4,000 per ounce. Notably, the project’s post-tax Net Present Value (NPV) is estimated at A$1.06bn, with an Internal Rate of Return (IRR) of 68%, signaling promising financial outcomes.
Initial capital expenditure for the Bendigo-Ophir project is projected at A$340 million, which includes plant and infrastructure costs. The project's design includes a processing plant equipped with carbon-in-leach (CIL) technology, anticipated to achieve a 92.4% recovery rate. Positioned on private land with established infrastructure, the project has been designated for New Zealand’s Fast Track Approval, which could expedite its development timeline.
Beyond direct financial benefits, Bendigo-Ophir is expected to contribute significantly to the New Zealand economy, with projected royalties and taxes amounting to A$1bn over the project’s life. This potential economic contribution emphasizes the project's alignment with Santana’s strategic priorities.
Damian Spring, CEO of Santana Minerals, highlighted the economic significance of Bendigo-Ophir, describing it as transformative for both the company and the Otago region. With shares currently trading 1.65% higher at 61.5 cents, Santana Minerals’ progress on the Bendigo-Ophir project continues to gain positive market attention.
