Nova Minerals chasing improved economics from review of Estelle gold project
Nova Minerals (ASX: NVA) is progressing a strategic review of the Estelle gold project in Alaska with a view to achieving first production at a lower risk profile and as soon as practical.
The review kicked off in August and is being led by Perth-based METS Engineering in conjunction with Alaskan company Rough Stock Mining Services.
Rough Stock has also been engaged to complete a report to standards set by the US Securities and Exchange Commission and pursue Nova’s potential public listing in that region.
Review objectives
The in-depth and formal strategic review is expected to significantly improve Estelle’s processing flow sheet, lower Nova’s initial capital costs and establish a faster path to commercial production based on increased recoveries and maximum value for tonnage.
It will include an examination of potential plant options; pre-feasibility test work to investigate stockpile processing options such as heap leach agglomeration; and geotechnical studies and blasting methods to improve pit slope design.
It will also consider a “right size” startup operation to minimise upfront costs and scale the project to a minimum steady state production of 200,000 ounces of gold per year in the near future, incorporating a potentially larger plant and ore sorters.
In late 2020, Nova demonstrated the ore sorters could upgrade ore to 6 grams per tonne gold using free cashflow once payback has been achieved.
Finally, the review will look at different power options for early start-up and operation, including the use of environmentally-friendly diesel generators which can offer efficient consumption rates and lower emissions.
Pre-feasibility studies
Nova will use the review results in ongoing pre-feasibility studies at Estelle based on the initial development of a low capital expenditure plant to process higher value material for the first several years.
The board expects the study will enable the option of multiple funding sources with minimal dilution to shareholders.
Path to profitability
Nova director Rodrigo Pasqua said the review is centred on moving Estelle toward production and accelerating the path to profitability.
“We understand the significance of current elevated gold prices and their potential impact on the project economics, where even slight increases in metal prices can have a substantial positive effect given the significant amount of additional material that would become economically viable,” he said.
“Unlocking value from mineral deposits requires a cohesive team of skilled individuals capable of building robust mines to withstand industry cycles and we are fortunate to have assembled such a team… once you delve into Estelle’s geology, it becomes evident that this project is poised for successful production and a sustained long-term operation.”