Maronan Metals (ASX: MMA) has identified a standalone processing option as its preferred development pathway for the Starter Zone at its polymetallic Maronan underground project in north-west Queensland.
The new scoping study suggests there is a strong economic case to develop the Starter zone silver-lead-copper-gold deposit with upside to be followed up on.
The study assessed the construction of both an onsite standalone processing facility and a toll-treatment option, finding that either option would deliver a 10-year life of mine (LOM) with annual mining and processing throughput of 1.2 million tonnes.
Long-Life Operation
The study confirmed Maronan’s potential as a long life, diversified polymetallic operation underpinned by a high-grade silver-lead resource, with silver representing 53% of revenue after payabilities.
It estimated a LOM metal resource in concentrate of 23 million ounces of silver, 280,000t lead, 5,800t copper, and 34,000oz gold, unhedged and vendor-royalty free, with annual steady state production equating to approximately 5.4Moz silver equivalent.
The onsite standalone processing plant offers more advantageous LOM free cashflow of $683m (v $595m) and a better net present value of $362m (v $377m), along with a favourable all-in sustaining cost of A$30.18 (v A$36.43) per equivalent ounce of silver produced.
The regional toll-treatment option offers a lower upfront CapEx requirement of $98 million (v the standalone’s $266m), while delivering a higher 67% internal rate of return (v 37%).
Compelling Investment Case
Non-executive chair Simon Bird said the results of the study highlighted the compelling investment case of the Starter zone, along with its development optionality, adding that the project “has the potential to be one of Australia’s largest silver producers, generating industry leading margins over a long life”.
The company is currently advancing permit applications and is accelerating key project development activities to allow it proceed to the next stage.
It is also in discussions on a range of options to fund the ongoing studies and potential development of the Starter zone and, ultimately, the much larger Maronan mineral resource that was not part of the study.
“These steps will enable Maronan Metals to advance to a definitive feasibility study and capture upside from favourable demand fundamentals for silver, copper, and gold,” Mr Bird said.
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