Introduction
In the evolving landscape of metal exploration and production, Western Australia continues to emerge as a hotspot for lucrative opportunities. Medallion Metals has recently unveiled ambitious plans to breathe new life into the historical Kundip mining center near Ravensthorpe. Here's a deep dive into the numbers, strategies, and prospects surrounding this initiative.
1. The Restart Plan: Numbers and Projections
Based on resources totaling 1.3 million ounces of gold and 59,000 tonnes of copper.
Estimated restart cost: A$163 million.
Projected mine life: Nine years.
Expected pre-tax cash flow: $85 million annually.
The primary goal is to set up a 1.5 million tonne per annum processing plant, unlocking potential avenues for the expansive Phillips River mineral field.
2. Revenue and Returns
Using base case prices, Medallion anticipates:
Net revenue of $2.4 billion.
Free cash flow amounting to $559 million.
Post-tax NPV and IRR valued at $309 million and 35%, respectively.
3. Exploring Further Potential
Medallion envisions a plethora of opportunities to amplify the prefeasibility, including:
Continuous resource conversion.
Optimization of schedules.
Exploration drilling around the processing facility.
Paul Bennett, the Managing Director, projects significant enhancements in reserves and resources over the next year. This optimism is underpinned by an additional 30,000m of planned drilling.
4. Unraveling Ravensthorpe's Potential
Bennett emphasizes the immense potential Ravensthorpe holds, suggesting that with the right investment, it could support production for several decades. Overcoming previous challenges, Medallion has successfully addressed concerns related to gold recovery in the presence of copper.
5. Addressing Funding Challenges
For junior explorers, funding remains a critical challenge. Medallion's proactive approach has seen them secure short-term funding through sub-leasing and other placements. With the PFS in hand, Bennett is hopeful about identifying non-dilutive funding solutions for the subsequent bankable study.
Conclusion
As the mining sector evolves, companies like Medallion Metals demonstrate resilience and adaptability. The Ravensthorpe restart, with its promising numbers and strategic approach, exemplifies the exciting future prospects within Western Australia's mining landscape. Stay updated with the latest in the mining world with MiningInsights.org.
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