WIN Metals Ltd has confirmed the technical and financial viability of its Butchers Creek Gold Project in Western Australia, outlining a 9-year mine plan with strong financial metrics and significant upside potential.
- 9-year mine life with 200,000 ounces gold production target
- Pre-production capital cost estimated at A$142 million
- Net Present Value (NPV8%) of A$143 million and Internal Rate of Return (IRR) of 25%
- Average annual gold production of 33,000 ounces at A$2,592/oz C1 cash cost
- Funding of approximately A$142 million required; no funding secured yet
Project Overview and Significance
WIN Metals Ltd (ASX:WIN) has released a comprehensive Scoping Study for its Butchers Creek Gold Project (BCGP), located in the Kimberley region of Western Australia. The study confirms the technical and financial viability of developing a standalone gold operation combining open pit and underground mining with a 600,000 tonnes per annum carbon-in-leach (CIL) processing plant. This milestone marks a significant step forward for WIN Metals, positioning Butchers Creek as a potential cornerstone asset with a projected mine life of nine years.
Resource and Production Profile
The project’s production target is based on a Mineral Resource Estimate (MRE) of approximately 3.29 million tonnes at 2.0 grams per tonne gold, equating to 211,000 ounces of contained gold. Notably, 96% of this material is classified as Indicated, providing a high level of geological confidence. The mine plan anticipates an average annual gold production of 33,000 ounces during peak years, with a maximum output of 37,000 ounces forecast in year five.
Financial Metrics and Capital Requirements
The Scoping Study projects a pre-production capital expenditure of A$142 million, encompassing the processing plant, mining infrastructure, and general administration. Financial modelling, based on a conservative gold price assumption of A$5,385 per ounce, yields a net present value (NPV) at an 8% discount rate of A$143 million and an internal rate of return (IRR) of 25%. The payback period is estimated at 3.5 years from the start of gold production, underscoring the project’s robust economic fundamentals.
Operational and Cost Considerations
The operation will feature both open pit and underground mining methods, with the open pit designed to provide access for underground portals. The processing plant design incorporates conventional crushing, grinding, gravity concentration, and CIL circuits, supported by metallurgical testwork indicating gold recoveries of approximately 94.6%. Operating costs are estimated at A$2,592 per ounce (C1 cash cost) and an all-in sustaining cost (AISC) of A$3,032 per ounce, competitive within the current Australian gold mining sector.
Funding and Future Development
WIN Metals currently does not have funding secured for the project and anticipates raising approximately A$142 million through a combination of debt and equity, or alternative financing mechanisms such as forward gold sales or joint ventures. The company acknowledges the risks associated with funding availability and potential dilution. The study recommends advancing to feasibility studies, initiating permitting processes, and exploring cost optimization strategies, including renewable energy integration and sourcing key consumables from Indonesia to reduce operating expenses.
Upside Potential and Regional Impact
Beyond the Butchers Creek deposit, the nearby Golden Crown deposit, with an inferred resource of 400,000 tonnes at 3.1 grams per tonne gold (38,000 ounces), offers significant upside potential pending further drilling and resource upgrades. WIN Metals emphasizes the project’s expected contribution to the local economy, projecting over A$748 million in economic value over the initial mine life and creating employment opportunities for up to 161 personnel during operations.
Bottom Line?
As WIN Metals moves toward feasibility and funding, the Butchers Creek Gold Project stands poised to reshape its growth trajectory, pending successful capital raising and regulatory approvals.
Questions in the middle?
- How will WIN Metals secure the estimated A$142 million funding amid market uncertainties?
- What impact will potential expansions, including Golden Crown, have on project economics and mine life?
- How will evolving regulatory and permitting timelines in Western Australia affect the project schedule?