29Metals [ASX:29M], a copper and precious metals mining company with exploration assets in Australia and Chile, today announced its latest results for a feasibility study performed at Gossan Valley, as well as a pre-feasibility study for Cervantes.
These two parts make one greater extension for its Golden Grove project.
29M believes its Gossan Valley findings mean a third mining front can be adopted, which will offer greater operational flexibility and add derisking qualities to the wider Golden Grove project.
Likewise, Cervantes’ pre-feasibility study suggests an opportunity to extend the Scuddles underground mine.
Shares for 29M may have surged 30% over the last month, however, today, they have declined more than 2%, and so far in 2022, they have also dwindled more than 21%.
Source: Marketindex.com
What 29Metals’ Golden Grove studies reveal
The miner’s studies at Gossan Valley revealed its viability as a third mining site, boosting operating flexibility and cutting Golden Grove’s production risk profile.
High-grade minerals were also found to be conveniently close to the surface within the project envelope — a welcome find 29M expects should improve development and capital profile amidst otherwise challenging market conditions.
Positive NPV provided a boost for the company’s potential in mineral inventory even outside the initial designated area of existing mineral resource estimates.
An initial six-year mine life at 326 000 tonnes/year average mining rate is now expected, with the possibility of an increase to 550 000 annual tonnes.
Capital costs for the first year of production are expected to be $88 million. 29M also expects production to occur within three years of the first capital injection, with an average production of 2,900 annual tonnes of copper and 20,000 annual tonnes of zinc.
As for the PFS at Cervantes, results revealed the company could extend the operating life of its existing Scuddles underground mine, as well as build onto current infrastructure.
The miner intends to make these extensions a priority, spurred on by increased geological benefits to boost product targets and related project economics, with both sites suggesting a material upside to spot pricing.
29M’s CEO, Peter Albert, stated:
‘We are delighted to report the results of the GV Studies and the Cervantes PFS today.
‘This an important milestone for 29Metals as we progress against our pipeline of organic opportunities to grow production and extend mine life, with these lower risk, brownfield development opportunities at Gossan Valley and Cervantes.
‘There are no material capital commitments before the end of 2023, and we will commence the regulatory approval process for Gossan Valley early in 2023. The Cervantes PFS was commissioned following the excellent drilling results reported in 2021 and a significant increase in Mineral Resources estimates for Cervantes at year end.’
29M continues to evaluate holistic site value opportunities, including the timing of both projects in relation to the wider Golden Grove mining plan and milling rates.
Regulatory approval processes for Gossan Valley will begin in the March 2023 quarter, with final approval requests to be lodged in the September 2023 quarter.
As for Cervantes, which does not yet hold a PFS with incorporated 2022 drilling results, its updates to Mineral Resources estimates are currently ongoing and are expected to be released in the March 2023 quarter.
It will be interesting to see what the drilling results add to the project’s overall extension viability.
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Regards,
Mahlia Stewart,
For Money Morning
