New study shows positive development scenario for Thomson Resources’ ‘hub and spoke’ strategy
Thomson executive chairman David Williams says the Lachlan Fold Belt is “largely untapped” with a number of gold and tin targets to be drilled.
Results from a stage one central processing pathway study have delivered a positive development scenario and up to $425 million in cash flow for Thomson Resources’ (ASX: TMZ) New England Fold Belt Hub and Spoke (NEFBHS) strategy in New South Wales.
The study was prepared by engineering consultant Core Resources and considered a number of different flowsheet and processing options for projects within the group including the Mt Carrington polymetallic deposit, and the Webbs, Conrad, Strauss and Kylo silver deposits.
Thomson’s Texas project deposits were not included in the study given concerns surrounding their commercial viability at current metal prices.
Indicative figures from the techno-economic evaluation estimate (before capital expenditure and costs) showed a $334 million cash flow over a nominal eight-year project life using a silver price of $28 per ounce.
Approximately $206 million will be accumulated within the first three years.
In an alternate scenario using a $34/oz silver price, the total aggregate positive cash flow over 11 years would be $425 million with $255 million accumulating in the first three years.
Central processing option
The pathway study settled on a central processing option with satellite sites at the Mt Carrington and Webbs projects which would feed into a facility at a new site near Tenterfield.
The site was selected for its proximity to Mt Carrington, which will have the largest resources of all projects within the NEFBHS.
Mt Carrington and Webbs would each have a crushing and flotation circuit to produce rougher concentrates which would be sent to Tenterfield for further processing.
The study suggested it may also be viable to transport ore from the Silver Spur project to the Webbs concentrator for processing.
Ore from the Conrad project is expected to be processed at the mine site using the Webbs concentrator.
Production schedule
An indicative production schedule was prepared based on a 1 million tonnes per annum treatment rate at Mt Carrington and a 750,000tpa rate at Webbs.
Net revenue figures using current metal prices were calculated for assumed products and considered the cost of transport as well as metal payables.
An annual cash flow considering typical mining and plant operating costs for similar types of developments was also prepared to provide an indication of funds available to pay back capital and generate project profits.
The analysis indicated positive cash flows; however, Thomson said further engineering would be required to establish actual operating and capital costs as part of a formal concept study.
Clear picture
Thomson executive chairman David Williams said the pathway study gives the company a clear picture of what the NEFBHS strategy will look like.
“The very pleasing aspect of the study is that even with using today’s current low metal prices and without expanding the resources or fine tuning the processes, the early stage indicative numbers are positive for proceeding forward,” he said.
“While these are only indicative numbers, to see such strong cash flows at today’s prices and using only four of the deposits is very encouraging … as we add more resources through extensional and expansional resource drilling, this project will just get stronger.”
Key projects
The key assets underpinning the NEFBHS concept were aggressively acquired by Thomson over a four-month period from late-2020 and include Conrad, Webbs and Texas District silver-gold-zinc-lead-copper (tin) projects.
While these deposits are predominantly silver-based, they are believed to also contain some base metals.
The Mt Carrington project area contains gold and silver-dominant deposits, with and without base metals.
Thomson has reported mineral resource estimates for the wholly-owned Webbs, Conrad, Silver Spur, Twin Hills and Mt Gunyan deposits and restated the Strauss-Kylo estimates (where it is earning up to 70% interest).
The deposits contain a combined total of 22.8Mt at 119 grams per tonne gold equivalent for a total resource base of 87.1Moz.
Mr Williams said the Mt Carrington polymetallic project had the potential to make a “significant contribution” to Thomson’s target of an aggregate plus-100Moz silver equivalent resource base available to the centralised processing facility.
Mt Carrington could potentially underpin the development of that facility, which would be designed to treat silver-gold and polymetallic ores.