Alt Resources (ASX: ARS) has reported a pre-feasibility study (PFS) confirms the technical and financial viability of its plans for a 750,000 tonne-per-year mining operation and processing plant at its Mt Ida and Bottle Creek gold project in the northern goldfields of Western Australia.
The study shows production with an all-in sustaining cost of $1,396 per ounce; that compares with a current gold price in Australian dollars of around $2,585/oz.
A local gold price of $2,305/oz was used as a price model, meaning the project will generate a 41% post-tax internal rate of return over a seven-year mine life. Post-tax payback is 39 months.
Alt also revealed a maiden ore reserve for Mt Ida and Bottle Creek, estimated at 4.61 million tonnes grading 1.8 grams per tonne of gold and 15.8g/t silver.
The contained 272,000oz of gold and 2.1 million ounces of silver will be extracted from 10 open pit operations.
Initial metallurgical test work indicates average gold recovery of 91.1%.
Processing plant will encourage development of other stranded deposits
Alt chief executive officer James Anderson said the PFS and maiden ore reserve confirm the project as a promising undeveloped gold asset.
“The work the company has done over the past three years culminating in this PFS demonstrates the potential for this under-explored northern goldfields region,” he said.
“The future development of a treatment plant will encourage other stranded assets located in the region to be further explored and developed,” Mr Anderson added.
Mt Ida and Bottle Creek project
The Mt Ida and Bottle Creek project comprises 10 separate deposits divided into two regions, Bottle Creek and Mt Ida.
The project area is located 100km north of Menzies in the Mt Ida gold belt. Access to the site is by sealed and unsealed road from the Goldfields Highway.
Bottle Creek includes the Emu, Southward, Cascade, VB North, VB and Boags deposits, while the Mt Ida and Quinns project area encompasses Tims Find, Shepards Bush, Forrest Belle and Boudie Rat.
Bottle Creek was mined between 1988 and 1989 but was prematurely shut down due to a pit wall failure at a time when the gold price was declining. Some 93,000oz was produced from two pits.
Mining took place at Quinns until 1997 through two shallow pits.
Takeover bid by Aurenne Resources
In May, Alt received an off-market takeover offer from private Australian company Aurenne Resources. It was an all-cash bid of $0.0505 per share.
Alt closed Friday at $0.047 after Aurenne updated its holding in the company to 99.76 million shares, or 16.4% of Alt.
At the time the offer was pitched, Alt chairman William Ellis said the board of directors was supportive of Aurenne’s offer but shareholders should take no action until the company had fully considered the offer.