Godolphin Resources has released a Scoping Study for its Lewis Ponds project in NSW, revealing strong economics with a 12-year mine life and a pre-tax NPV of AUD$481 million under conservative metal prices.
- 12-year combined open pit and underground mine life at 1.25Mtpa throughput
- Base case pre-tax NPV of AUD$481M and IRR of 24% with six-year payback
- Upside case with spot prices delivers AUD$1.1 billion free cash flow and 40% IRR
- Pre-production capital estimated at AUD$268M with AISC of AUD$3,254 per gold equivalent ounce
- 70% Indicated and 30% Inferred Mineral Resources underpin production target
Overview of the Scoping Study
Godolphin Resources Limited (ASX – GRL) has announced the results of its Scoping Study for the Lewis Ponds gold, silver, and base metals project located in New South Wales’ Lachlan Fold Belt. The study outlines a technically straightforward development plan combining open pit and underground mining over an initial 12-year mine life, processing 1.25 million tonnes per annum.
Under a conservative base case gold price of US$3,700 per ounce and silver at US$55 per ounce, the project delivers a pre-tax net present value (NPV) of AUD$481 million and an internal rate of return (IRR) of 24%, with a payback period estimated at six years. The study also highlights an upside scenario based on current spot prices (gold at US$5,055/oz and silver at US$82/oz), which significantly boosts the pre-tax NPV to AUD$1.088 billion and IRR to 40%, shortening payback to four years.
Resource Base and Production Profile
The production target is supported by a December 2025 Mineral Resource Estimate comprising 17.52 million tonnes at 1.12 g/t gold, 53.34 g/t silver, 2.06% zinc, 1.10% lead, and 0.14% copper. Notably, 70% of the scheduled mined material is classified as Indicated Resources, with the remaining 30% as Inferred Resources, reflecting a moderate level of geological confidence. The first six years, covering the payback period, see 74% of mined material from Indicated Resources, which helps de-risk the early project phase.
The mining plan initiates with four years of open pit operations, extracting 3.8 million tonnes at a strip ratio of 7.5 – 1, followed by eight years of underground mining targeting 8.9 million tonnes. Ore will be processed onsite producing two concentrates – a zinc-dominant concentrate and a lead-gold-silver concentrate, with metallurgical testwork confirming strong recoveries and clean concentrate grades.
Capital and Operating Costs
The pre-production capital cost is estimated at AUD$268 million, including a processing plant designed for 1.25 Mtpa throughput and associated infrastructure. Sustaining capital over the mine life is forecast at AUD$64 million. Operating costs, including mining, processing, transport, treatment, refining, and royalties, are projected at AUD$1.512 billion, resulting in an all-in sustaining cost (AISC) of AUD$3,254 per gold equivalent ounce.
Godolphin’s Managing Director, Jeneta Owens, emphasised the project’s robust economics and strategic location near Orange, NSW, which benefits from established infrastructure and a skilled workforce. She highlighted the clear pathway to development and the potential for further resource growth and optimisation through ongoing drilling and metallurgical improvements.
Funding and Next Steps
While the Scoping Study provides a compelling economic case, Godolphin acknowledges the need to secure approximately AUD$268 million in pre-production funding. The company is exploring a mix of equity raises, strategic partnerships, joint ventures, and offtake agreements to finance the project. However, there is no guarantee that funding will be obtained on favourable terms, and potential dilution to shareholders remains a risk.
The Board has approved advancing Lewis Ponds to the Pre-Feasibility Study stage, which will refine technical and economic parameters, including permitting and environmental assessments. The company also plans to continue infill drilling to convert Inferred Resources to Indicated and explore near-mine growth targets.
Regional Context and Market Outlook
Lewis Ponds is situated in a premier mining jurisdiction with proximity to major operations such as Newmont’s Cadia Valley and Evolution Mining’s Northparkes. The project’s polymetallic nature, with exposure to gold, silver, zinc, lead, and copper, positions it well to benefit from diverse commodity markets, including the growing demand for critical minerals.
Commodity price sensitivity analysis indicates that the project’s value is most influenced by metal prices, metallurgical recoveries, and foreign exchange rates, underscoring the importance of market conditions in the project’s future viability.
Bottom Line?
Godolphin’s Lewis Ponds project is poised for a significant development phase, but securing funding and converting resources remain key hurdles ahead.
Questions in the middle?
- Will Godolphin secure the necessary AUD$268 million pre-production funding on favourable terms?
- How effectively can the company convert Inferred Resources to Indicated to reduce project risk?
- What impact will fluctuating commodity prices have on the project’s economic viability?