Drake Project Now Hosts 0.8Moz Gold-Equivalent; Scoping Study Shows A$290M NPV
Legacy Minerals has significantly upgraded its Drake Project resource to 0.8 million ounces gold-equivalent and reported a robust Stage 1 Scoping Study, setting the stage for potential production growth. Exploration momentum continues across its NSW portfolio with ongoing drilling and geophysical surveys.
- Drake Project resource updated to 0.8Moz gold-equivalent and 35Moz silver-equivalent
- Stage 1 Scoping Study indicates potential annual gold production of ~31,400oz at A$1,726/oz AISC
- Robust pre-tax NPV of approximately A$290 million based on conservative gold price assumptions
- Active drilling underway at Thomson Project targeting intrusion-related gold-copper systems
- Geophysical surveys at Glenlogan identify compelling porphyry copper-gold targets
Resource Upgrade at Drake Project
Legacy Minerals Holdings Limited (ASX: LGM) has delivered a substantial update to its Mineral Resource Estimate (MRE) for the Drake Project in northern New South Wales. The updated resource now totals 0.8 million ounces gold-equivalent (AuEq) and 35 million ounces silver-equivalent (AgEq), contained within 34 million tonnes of open-pit resources. This upgrade reflects a combination of gold-rich and silver-rich deposits, with notable high-grade zones including 2.4 million tonnes at 2.7 g/t gold for 0.2 million ounces of gold.
The resource expansion was driven by incorporating base metals into the economic pit modelling, updated commodity prices, and enhanced geological modelling of historical drill data. The deposits remain open along strike and at depth, suggesting further upside potential for resource growth.
Positive Economics from Stage 1 Scoping Study
Following the resource update, Legacy Minerals commissioned a Stage 1 Scoping Study which reported encouraging economic metrics. The study envisages an initial five-and-a-half-year production period with average annual gold output of approximately 31,400 ounces at an all-in sustaining cost (AISC) of around A$1,726 per ounce. Using a conservative base case gold price of A$4,250 per ounce, well below current market levels, the project is forecast to generate strong free cash flows averaging about A$52.8 million pre-tax annually and a net present value (NPV) of approximately A$290.4 million.
Importantly, this study is based on a subset of the total resource, indicating that a future Stage 2 study incorporating the full MRE could materially enhance these economic outcomes.
Exploration Momentum Across NSW Portfolio
Legacy Minerals continues to advance exploration across its broader New South Wales portfolio. At the Thomson Project, drilling is underway targeting large gold-copper anomalies interpreted as intrusion-related systems. Two 600-metre drill holes are testing the F4 and Cut-B anomalies, which exhibit coincident magnetic and gravity signatures indicative of hydrothermal alteration.
Meanwhile, at the Glenlogan Project, joint venture partner S2 Resources has identified a compelling porphyry copper-gold target through ground geophysical surveys combining Tensor Induced Polarisation and Magnetotelluric methods. This target lies within a highly prospective region of the Lachlan Fold Belt, near world-class deposits such as Cadia-Ridgeway.
Additional projects such as Bauloora and Fontenoy have also seen recent drilling and geochemical sampling, with results expected to further define the exploration potential of these large-scale systems.
Financial Position and Outlook
As at the end of the March quarter, Legacy Minerals held approximately A$1.8 million in cash. Exploration and evaluation expenditure for the quarter was around A$0.9 million, reflecting active drilling, geophysical surveys, and technical studies. The company reported no substantive mining production or development activities during the period.
CEO Christopher Byrne highlighted the company's focus on advancing the Drake Project and other exploration assets, emphasizing the strong foundation laid by the resource upgrade and positive scoping study results. He also noted the steady stream of news flow expected in coming months as drilling and assay results from multiple projects are received.
Bottom Line?
Legacy Minerals’ upgraded Drake resource and promising economics mark a pivotal step, but upcoming drilling results and funding will be critical to sustaining momentum.
Questions in the middle?
- How will the results of the Stage 2 Scoping or Feasibility Study at Drake impact project economics and timelines?
- What are the expected timelines and potential outcomes for the ongoing drilling at Thomson and Glenlogan?
- Given the modest cash position, what are Legacy Minerals’ plans for funding continued exploration and development?
