Bendigo-Ophir PFS Shows 1.15Moz Gold Output at A$1,416/oz AISC
Santana Minerals has reported a robust Pre-feasibility Study for its Bendigo-Ophir Gold Project, lifting the after-tax NPV to A$1.2 billion and IRR to 76%, as it progresses detailed engineering and fast-track permitting in New Zealand.
- Pre-feasibility Study indicates 1.15Moz gold production over 9 years at A$1,416/oz AISC
- After-tax NPV8 rises to A$1.2 billion with IRR climbing to 76% amid rising gold prices
- Fast-track approvals law enacted, expediting mine permitting process
- Detailed engineering and trade-off studies underway to reduce pre-production costs
- Company ends quarter with A$31 million cash and approved 3-for-1 share split
Robust Pre-feasibility Study Sets Stage
Santana Minerals Ltd has marked a significant milestone in its Bendigo-Ophir Gold Project (BOGP) in New Zealand with the completion of an initial Pre-feasibility Study (PFS). The study outlines a compelling development scenario producing approximately 1.15 million ounces of gold over an initial nine-year mine life, with an annual output averaging 125,000 ounces. The All-in-Sustaining-Cost (AISC) is estimated at A$1,416 per ounce, positioning the project competitively within the gold sector.
Since the PFS announcement in November 2024, the gold price has surged from A$4,000 to A$4,375 per ounce, significantly enhancing the project’s financial metrics. The after-tax Net Present Value (NPV8) has increased to A$1.2 billion, while the Internal Rate of Return (IRR) has climbed to an impressive 76%. Free cash flow projections now exceed A$2 billion, underscoring the project's strong economic potential.
Fast-Track Approvals and Permitting Progress
In a regulatory boost, the New Zealand government ratified the Fast-track Approvals Act in December 2024, designating the Bendigo-Ophir project as a 'Fast-track' development. This legislative change aims to accelerate permitting processes for projects deemed nationally and regionally significant, shifting focus towards economic outcomes and reducing previous delays under the Resource Management Act.
Santana is preparing to lodge its development proposal in early 2025, having completed most technical and environmental baseline studies. The company is integrating recent spring ecological survey results and finalising mitigation strategies to ensure a comprehensive submission. This expedited pathway is expected to streamline approvals and support timely project advancement.
Engineering Optimisation and Cost Reduction Efforts
Following the PFS, Santana has initiated detailed engineering and mine planning to refine project economics further. Key focus areas include optimising the pit design to improve strip ratios, reducing pre-strip earthmoving costs, and evaluating the interface between open-pit and underground mining operations. These trade-off studies aim to lower pre-production capital expenditure, currently estimated at A$340 million.
The company is also engaging with mining and construction contractors to validate cost assumptions and initiate tender processes for major contracts. These steps are critical in preparing for project financing and the Final Investment Decision (FID), ensuring the Bendigo-Ophir project is positioned for efficient execution.
Exploration Upside and Resource Expansion
While the PFS focuses on the Indicated Resource category, Santana continues to explore the substantial Inferred Resources at the Rise and Shine (RAS) deposit, which exceed 770,000 ounces, as well as satellite deposits at Come-in-Time (CIT) and Srex (SRX) containing around 150,000 ounces. Recent infill drilling has confirmed high-grade zones and expanded mineralisation at these satellite sites, offering potential to supplement mill feed and enhance project value.
Ongoing exploration and resource definition work could extend mine life and improve production profiles, particularly as down-plunge ore remains open and untested. This exploration upside adds a layer of optionality to the project’s long-term outlook.
Corporate Developments and Financial Position
On the corporate front, shareholders approved a 3-for-1 share split to improve stock liquidity. The company also held its 2024 Annual General Meeting in Auckland, reflecting its dual listing on the ASX and NZX. Santana closed the quarter with approximately A$31 million in cash, bolstered by the exercise of 13.4 million options at A$0.36 per share, with nearly 80 million options still available for conversion before expiry in February 2025.
Exploration and project study expenditures during the quarter totaled A$4.4 million, reflecting continued investment in advancing the Bendigo-Ophir project. The company is also progressing recruitment for key operational leadership roles, signaling readiness to scale up as permitting and financing milestones are achieved.
Bottom Line?
Santana Minerals’ strong PFS results and fast-track permitting position Bendigo-Ophir for a decisive development phase, but execution risks and resource expansion remain key watchpoints.
Questions in the middle?
- How will ongoing exploration of Inferred Resources impact the mine plan and project economics?
- What are the timelines and potential hurdles for securing final mining permits under the new Fast-track regime?
- How will rising gold prices influence financing terms and investor appetite for the project?