Legacy Minerals (ASX: LGM) has reported a compelling development case for its Mt Carrington gold-silver project in New South Wales after a scoping study by Ausenco outlined a 19-year mine plan and strong pre-tax economics.
The study’s spot case delivered a pre-tax net present value of $716 million, an internal rate of return of 38%, and payback within 32 months from first production.
The base case also returned a pre-tax net present value of $542m, an internal rate of return of 32%, and payback within 36 months.
The data supports the company’s view that Mt Carrington can remain financially robust across a range of metal price assumptions.
Legacy is now preparing to move the project toward a pre-feasibility study (PFS), backed by about $8m in cash and planned work programs covering resource conversion drilling, metallurgical test work, geotechnical drilling, hydrology, tailings design, and permitting.
Long-Life Mine Plan Outlined
The scoping study is based on a proposed 1 million tonne per annum conventional open pit operation producing a bulk gold-silver sulphide concentrate.
The mine plan covers eight shallow adjacent pits within a single mining area comprising Strauss, Kylo, Lady Hampden, Guy Bell, Carrington, Silver King, White Rock, and Red Rock.
Mining Plus developed the mining component of the study using a staged schedule designed to preserve feed grade profile and concentrate specification.
The plan includes 17.04Mt of plant feed at 0.87 grams per tonne gold and 21.45g/t silver, with a strip ratio of 3.06:1 on a plant feed basis.
Production Profile Supports Cash Flow
Mt Carrington is forecast to produce 373,000 ounces of payable gold and 9.91 million ounces of payable silver in concentrate over the life of mine.
Average annual production after ramp-up is estimated at 21,420oz gold and 568,707oz silver, with peak annual output of 31,934oz gold and 845,355oz silver.
The spot case generates life-of-mine pre-tax free cash flow of $1.597 billion, while the base case generates $1.247b.
The spot case all-in sustaining cost is estimated at $1,061/oz gold after silver credits, placing the project in the first quartile globally on the company’s assessment.
Brownfield Site Reduces Development Complexity
The study outlined initial capital expenditure of $220.5m including engineering, procurement, and construction management costs and contingencies.
Mt Carrington benefits from existing infrastructure from historical operations, including grid power access, established roads, cleared mine areas, water infrastructure, and a tailings storage facility.
The study adopts a 32-kilovolt overhead powerline connection to the state grid, materially reducing reliance on diesel fuel.
Legacy said the brownfield setting and shallow conventional open pit mining method help de-risk the potential development pathway.
Cyanide-Free Flowsheet Selected
The processing plan uses a cyanide-free flotation flowsheet, representing a shift from the carbon-in-leach circuits used in historical studies and operations at Mt Carrington.
The proposed plant includes primary crushing, semi-autogenous grinding and ball mill grinding, rougher-scavenger flotation, concentrate regrind, cleaner-scavenger flotation, concentrate thickening and filtration, and conventional tailings handling.
The flowsheet is designed to produce a bulk gold-silver sulphide concentrate suitable for sale to a third-party refinery.
Life-of-mine recoveries average 78% for gold and 84% for silver, with further metallurgical work planned to refine the flowsheet and assess potential recovery improvements.
Resource Growth Remains Key Lever
Mt Carrington’s global JORC 2012 mineral resource estimate totals 34.4Mt at 104.7g/t silver equivalent, containing about 115.8Moz silver equivalent.
The current study processes 17Mt of that 34Mt resource and includes only gold and silver content in the production target, with no copper, lead or zinc credits assumed.
Legacy has identified further upside from silver resources including White Rock North, along with about 180,000t of zinc-lead-copper metal across the broader resource base.
The company is also assessing opportunities to increase plant throughput beyond 1Mtpa, add base metal circuits and pursue near-mine resource growth around Emu, Battery, and Mascotte.
Improved Value Proposition
Chief executive officer Christopher Byrne said the study delivered the first long-life, development-ready mine plan for Mt Carrington.
“Ausenco is a globally recognised engineering and consulting firm with a strong track record of delivering precious metals projects, particularly in Australia—its experience from concept through to execution provides confidence in the robustness of the Scoping Study outcomes and the pathway to development,” he said.
“We see multiple opportunities to significantly improve the value proposition demonstrated through this initial Scoping Study including near-mine resource extensions, updated metallurgical recoveries, increased plant throughput, and the potential addition of zinc and copper as saleable products within the project’s broader mineralised system.”
“Together with near-mine exploration at the Emu, Battery, and Mascotte prospects, these factors support our view that Mt Carrington can be a key driver of future value for Legacy Minerals shareholders.”
Legacy will now advance Mt Carrington towards the PFS stage with a targeted drilling program to convert resources from the Inferred to Indicated category in key early-mine areas, supporting its metallurgical and geotechnical work.
