De Grey reports 'outstanding' DFS results for its Hemi gold project, raises A$300M for development
Thu Sep 28 2023
De Grey Mining (ASX: DEG) today announced "outstanding" results of the definitive feasibility study (DFS) completed on its 100%-owned Hemi gold project, located in the Pilbara region of Western Australia.
The company said the DFS confirms Hemi's status as a Tier 1 gold project which, once in production, will be a top five Australian gold mine and in the lowest AISC quartile for large Australian gold mines, adding that Hemi is a "top three global undeveloped gold project" based on average annual gold production.
According to the DFS results, the project is expected to generate a net present value (NPV5%) of A$4.2 billion pre-tax and A$2.9 billion post-tax, and an internal rate of return (IRR) of 45% pre-tax and 36% post-tax.
The company said the project has a short payback period of 1.5 years pre-tax and 1.8 years post-tax due to commencement of mining operations at the high margin Brolga starter pit.
The production profile of the DFS demonstrates an annual production range up to approximately 570,000oz in year 2, with average production of 553,000oz over the first 5 years (at all-in sustaining costs (AISC) of A$1,229/oz) and 530,000oz over the first 10 years (at AISC of A$1,295/oz).
De Grey noted that total Hemi mineral resources increased by 1Moz to 9.5Moz and indicated mineral resources increased from 5.8Moz to 6.9Moz, whereas Hemi-only probable ore reserves increased by 0.9Moz to 121Mt @ 1.5g/t Au for 6.0Moz.
Importantly, the company said that full construction activities are expected to commence at Hemi in the second half of calendar year 2024 following the receipt of environmental approvals and the completion of project implementation activities.
De Grey pointed out that based on an estimated two year construction period, first gold pour at Hemi targeted for second half of calendar year 2026, subject to the receipt of approvals.
The company also announced it has launched its fully underwritten two tranche placement to raise A$300 million (before costs), which will provide "significant balance sheet strength" and flexibility to progress activities to support the project execution schedule.
De Grey Mining is a Western Australian gold explorer and project developer. The company's primary focus is the 100% owned Mallina gold project in the Pilbara. Here, in late 2019, the company made a large scale, high value, near surface gold discovery at an area called Hemi. The deposits have the potential to be mined by large scale, low strip ratio, low cost open pit mining methods.
Source: https://www.kitco.com