De Grey progresses Pilbara gold project

Local explorer De Grey Mining has progressed plans to develop its Pilbara gold project with the release of a scoping study today, which revealed a development cost of $96 million.

De Grey’s Pilbara gold operation comprises its Turner River project and the Indee project, which it has agreed to acquire from private company Northwest Nonferrous Mining Australia for $15 million.

The project is located close to Port Hedland.

The scoping study released today showed a development cost of $78 million for a new oxide carbon-in-leach plant and associated infrastructure, with a further $18 million to be spent on sulphide circuit upgrades in the third year of production.

The study also foreshadowed about 290,000 ounces of gold production over five years with a base case C1 cash cost of $1,000/oz, and an all-in sustaining cost of $1,200/oz.

Following completion of the scoping study, De Grey has commenced pre-feasibility study work.

“The scoping study results, using reasonable assumptions, are highly encouraging,” chairman Simon Lill said.

“The project currently shows a five-year open pit mine life, but there is clear potential for significantly increased cash flow through increases in mine life, which we can expect to achieve through the company’s current resource program.

“Further substantial upside is seen in improved mine scheduling, increased economies of scale, inclusion of low capital cost heap leaching of low grade mined material and potentially improved recoveries within the sulphide material.”

De Grey shares were unchanged at 3.6 cents each at 10:45am.