Home / World News / De Grey Mining’s $1b-plus Mallina to be top-five gold mine

De Grey Mining’s $1b-plus Mallina to be top-five gold mine

De Grey Mining expects to make a final investment decision on its $1b-plus Mallina gold project by the middle of next year, with the mine set to be among Australia’s top five producers of the precious metal.

The Glenn Jardine-led company unveiled a preliminary feasibility study for the project near Port Hedland on Thursday, which showed it would produce 540,000 ounces over the first 10 years of its life, with total output of 6.4 million ounces over a 13.6-year period.

The production rate would place it third behind Newmont’s Boddington mine south of Perth and Newcrest’s Cadia mine in New South Wales in terms of annual production based on current rates.

The capital cost for the 10 million-tonne-per-annum plant and site infrastructure at Mallina is estimated at $985m with an additional pre-strip capital cost of $68m.

De Grey estimated the mine would operate at average all-in sustaining costs of $1220/oz for the first five years, putting it in the lowest quartile of Australian producing gold mines and making it one of the world’s lowest capital intensive gold projects.

Mr Jardine said the preliminary feasibility study was a significant upgrade on the company’s scoping study released in October last year and was based on a resource upgrade announced in May, which put Mallina’s resource inventory at 10.6Moz.

He said total production had increased by nearly 50 per cent with annual production rates up by 25 per cent.

The company expects to move quickly to a definitive feasibility study and make a final investment decision by the middle of next year.

The study gives the project a post-tax net present value of $2.7 billion, generating an internal rate of return of 41 per cent post-tax. The post-tax payback period is forecast at 1.8 years.

De Grey says it expects to achieve a gold recovery rate of 93.6 per cent with the deposits mainly refractory ore by processing via pressure oxidation and a comminution circuit.

Shares in De Grey surged from less than 10¢ in early 2020 to a high of $1.67 in April last year on investor excitement around the company’s celebrated Hemi deposit at Mallina. The company’s rise is part of a broader resurgence of the Pilbara gold sector in recent years, with Capricorn Metals and Calidus Resources being other notable success stories.

Gold Road Resources picked up a 15 per cent stake in De Grey earlier this year with its $245m takeover of DGO Gold and last month boosted its holding to 19.99 per cent, but hosed down expectations of a corporate move on the explorer. De Grey shares closed up 5¢ at 97¢ on Thursday.

About brandsauthority

Check Also

Police car v pedestrian: Woman, 20, still fighting for life after being hit crossing Wellington Street

A woman who suffered severe head injuries when she was hit by a police car …

%d bloggers like this: