Hayes Creek proves positive for PNX

PERTH (miningweekly.com) – Base and precious metals explorer PNX Metals reported on Thursday that a scoping study had demonstrated that the Hayes Creek project, in the Northern Territory, was financially robust.

The project was expected to produce 400 000 t/y of ore, containing 13 700 t of zinc in concentrate, 1 290 oz of silver and 14 000 oz of gold. With production slated to start in 2019, the project was estimated to have an indicative mine life of seven years.

Openpit mining from the Mt Bonnie deposit would deliver the initial ore during the first two years of operation, followed by an underground mine at the Iron Blow deposit.

The scoping study estimated that the project would require a capital investment of A$54-million, but could deliver a net present value of A$109.4-million and an internal rate of return of 58%.

Yearly life-of-mine (LoM) cash flow was expected to be A$35-million, resulting in a total LoM cash flow of A$244-million.

“The Hayes Creek scoping study provides a robust economic base case that confirms the potential for the project to become an economically viable operation,” said PNX MD James Fox.

“The level of capital investment that has been scoped provides for a modest mining and ore throughput rate and demonstrates a project payback period of less than two years. This is likely to be attractive to stakeholders or other financiers, as is the inherent commodity mix of zinc, gold and silver.”

Fox said that the results from the study would underpin the completion of a prefeasibility study (PFS), which was already under way. The PFS aimed to improve the certainty of the mining inventory and associated operating and development costs, and to reduce the technical risk of the project towards a development decision.