PERTH (miningweekly.com) - Gold developer Mutiny Gold on Tuesday reported that a feasibility study had confirmed its flagship Deflector project, in Western Australia, as a premium gold/copper project.

For a capital investment of A$87-million, the Deflector project could support a seven-year life-of-mine, starting with a two-year openpit operation, followed by a five-year underground operation.

Production would start at 480 000 t/y in the openpit period, followed by 360 000 t/y during the underground period, resulting in a total metal production of 382 000 oz of gold equivalent.

In financial terms, the feasibility study has indicated that the Deflector project could be highly profitable, at low costs. The project was forecast to generate an initial net operating cash flow of A$341-million and earnings before interest, taxes, depreciation and amortisation of A$323-million.

The project would have a net present value of A$103-million, and an internal rate of return of 43%.

“The bankable feasibility study shows Deflector as a premium, highly profitable gold/copper mine. We are planning for Deflector to be the platform for Mutiny to grow into a far larger gold/copper-producing operation,” said MD John Greeve on Tuesday.

He noted that the company was well positioned to achieve its goal, especially given the low operating costs of A$617/oz and the development upside both in the rate of production and target increase in gold ounces.

“Deflector is just the first of a multiple gold mine strategy, and it bodes well that we have such a strong launch pad,” Greeve said.

Meanwhile, Greeve noted that the company was also progressing an updated resource model that would include high-grade intersections reported in its recently completed extensional Deflector drill programme.

Greeve said that these results were not in the current mine inventory, and the new resource would be used to generate a new mine programme, reserve and resource inventory.

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