Redcastle Resources (ASX: RC1) has confirmed the potential for early cash returns after receiving robust results from a scoping study of its Queen Alexandra gold project in the Yilgarn region of Western Australia.
The new study has identified the potential to generate revenue of approximately $65.6 million in just 10 months, with the two-stage pit development focused on various options to maximise near term cash flow.
The study investigated an upgraded design targeting 73,000 tonnes of gold at 3.83 grams per tonne, significantly higher than the previously assumed minimum parcel size of 50,000t for toll treating.
According to the study, with a mine life featuring two daily shifts over a 10-month period, the project would produce 13,700 ounces of gold at a head grade of 2.56g/t.
On that basis, Queen Alexandra would generate estimated pre-tax cash surplus of approximately $15 million after all working capital costs, including pre-mining capital and start-up costs of roughly $6m.
The company is currently gauging the potential for toll milling opportunities whilst also assessing a joint venture proposal relating to production and milling operations.
Redcastle believes Queen Alexandra’s close proximity to the Redcastle Reef project just 700 metres away offers the company a clear opportunity for co-development, with potential for shared infrastructure and reduced unit operating costs.
Redcastle chair Ray Shaw said the company was also examining growth opportunities involving a third pit extension to a depth of approximately 70m, providing access to approximately 1,700 additional ounces of produced gold, depending upon gold price and final pit design.
“This opportunity is supported by modest capital requirements and compelling economics at current gold prices,” Mr Shaw said.
“With strong grades, straightforward metallurgy, and close proximity to existing processing infrastructure, the low-risk development outlined for the initial shallow pit design confirms the potential for near-term production.”
“We will continue to apply a disciplined approach as we progress the commercialisation of Queen Alexandra, and nearby deposits in due course, maintaining our focus on delivering Redcastle’s first gold pour,” he added.
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