Bendigo-Ophir PFS Shows A$277M Capex, 1.25Moz Gold, 65% IRR

A Refined Path to New Zealand’s Richest Gold Mine

Santana Minerals Limited has released an updated Pre-Feasibility Study (PFS) for its Bendigo-Ophir Gold Project, located on private freehold farmland in New Zealand. The revised study highlights a significant reduction in capital expenditure to A$277 million, down from an earlier estimate of A$340 million, while simultaneously increasing the expected gold grade and recoverable ounces. This combination enhances the project’s economic profile, positioning it as a potentially lucrative, low-cost gold producer.

The project boasts a 13.8-year mine life with an overall ore grade of 2.54 grams per tonne, including an open pit grade of 2.75 g/t at the Rise & Shine (RAS) deposit. Total recoverable gold is projected at 1.25 million ounces, with underground mining contributing an increased 295,000 ounces. These improvements underpin a robust financial outlook, featuring A$6.2 billion in gold sales and an impressive A$3.5 billion profit before tax.

Strong Financial Metrics and Operational Efficiency

The updated PFS reveals a compelling investment case with an after-tax internal rate of return (IRR) of 65% and a simple payback period of less than 1.7 years. Operating costs remain competitive, with a cash cost of A$1,741 per ounce and an all-in sustaining cost (AISC) of A$1,842 per ounce, based on a gold price of A$4,950 per ounce. The project’s net present value (NPV) after tax stands at A$1.5 billion, supported by a steady production profile peaking at approximately 120,000 ounces annually.

Mining methods include conventional open pit operations at RAS and Srex (SRX) deposits, complemented by underground long-hole stoping at RAS. The processing plant is designed around simple carbon-in-leach (CIL) technology, achieving high recovery rates of 93%. Infrastructure plans are well advanced, with early works and detailed engineering underway, and a pathway to first gold targeted for March 2027.

Environmental and Regulatory Progress

Santana has completed extensive environmental baseline studies and is preparing to submit its resource consent applications imminently. The project benefits from its location on private farmland with existing agreements in place, facilitating a smoother permitting process. However, the company cautions that required consents and permits are yet to be granted, which remains a critical milestone for project advancement.

Financing remains a key consideration, with the PFS estimating a capital requirement of approximately A$277 million. While Santana expresses confidence in securing funding, it acknowledges the potential for dilution or alternative strategies such as divesting revenue streams or partial asset sales. Investors should weigh these factors alongside the geological risk, as about 7% of the production target is derived from inferred resources, which carry inherent uncertainty.

Outlook and Market Implications

The updated PFS positions the Bendigo-Ophir Gold Project as a resilient and profitable venture, even under scenarios of significantly lower gold prices. Sensitivity analysis shows the project remains viable with gold prices halved, underscoring its low-cost structure and strong margins. As Santana moves into early works and detailed engineering, market participants will be watching closely for permitting progress and financing arrangements that will ultimately determine the project’s trajectory.