Santana Minerals (ASX:SMI) has released its Pre-Feasibility Study (PFS) results for the Bendigo-Ophir Gold Project in New Zealand’s Otago region, showcasing a high-margin, long-life gold development with low capital costs.
The study estimates that the project, encompassing both open-pit and underground mining, will yield 1.15 million ounces of gold over a 9.2-year lifespan, with an average annual production of 125,000 ounces.
The PFS highlights a probable mining reserve of 15.5 million tonnes (Mt) grading 2.37 grams per tonne (g/t) for approximately 1.18 million ounces of gold. With strong gold prices, the project’s All-In Sustaining Cost (AISC) is expected to be A$1,416 per ounce, generating significant returns. Santana projects a revenue of A$4.6bn and an EBITDA of A$3.1bn at the current gold price of A$4,000 per ounce, with a post-tax Net Present Value (NPV) of A$1.06bn and an impressive Internal Rate of Return (IRR) of 68%. Initial capital expenditure, including plant and infrastructure, is estimated at A$340m.
The Bendigo-Ophir project is situated on private land with established infrastructure and is designated for New Zealand’s Fast Track Approval process. The processing plant, utilising carbon-in-leach (CIL) technology, is designed for 92.4% gold recovery. This project could become a significant contributor to the New Zealand economy, with royalties and taxes estimated at A$1bn over its life.
CEO Damian Spring emphasised the project's economic potential and alignment with Santana’s growth strategy, stating, “The Bendigo-Ophir project represents a transformational opportunity, both for Santana and the Otago region, with strong financial and operational metrics.”
Shares in Santana are trading 1.65% higher at 61.5 cents.
