Legacy Minerals reveals a robust 19-year Mt Carrington gold-silver project with a pre-tax NPV of A$716 million and low operating costs, advancing towards pre-feasibility studies amid resource conversion plans.
- 19-year mine life with 373koz Au and 9.91Moz Ag production
- Pre-tax NPV7 of A$716M under spot metal prices
- Low all-in sustaining cost (AISC) of A$1,061/oz Au
- Initial capital expenditure of A$220.5M leveraging brownfield infrastructure
- Targeted drilling to convert Inferred to Indicated Resources
Mt Carrington Delivers Strong Financial Case
Legacy Minerals Holdings Limited (ASX:LGM) has unveiled a compelling Ausenco-led Scoping Study for its Mt Carrington Project in New South Wales, positioning the asset as a long-life, low-cost gold-silver producer. The study outlines a 19-year mine life, generating a pre-tax net present value (NPV7) of A$716 million under spot metal prices (Au A$6,500/oz, Ag A$105/oz), with a robust internal rate of return (IRR) of 38% and a swift payback period of 32 months from first production.
The project targets 373,000 ounces of gold and nearly 10 million ounces of silver, with an average annual production of 21,400 ounces of gold and 569,000 ounces of silver. Notably, the all-in sustaining cost (AISC) is estimated at a competitive A$1,061 per ounce of gold, including silver credits, placing Mt Carrington in the first quartile of global producers on this metric. This financial profile is underpinned by a modest initial capital expenditure of A$220.5 million, which benefits from existing brownfield infrastructure and a grid power connection that reduces reliance on diesel fuel.
Brownfield Site and Low-Cost Operations
The Mt Carrington operation is designed as a conventional, shallow open-pit mine with a 1 million tonnes per annum processing plant employing a cyanide-free flotation flowsheet. This approach produces a bulk gold-silver concentrate for third-party refining, offering flexibility in offtake arrangements. The project leverages extensive existing infrastructure including sealed access roads, cleared plant footprints, water dams, and an established tailings storage facility, significantly de-risking development timelines.
Mining Plus Pty Ltd has developed a 19-year mine plan featuring eight adjacent pits sequenced to optimise feed grade and concentrate quality. The mine plan incorporates a strip ratio of 3.06:1 and is based on a blend of 46% Indicated and 54% Inferred Mineral Resources over the life of mine, with 71% Indicated Resources in the first 11 years. This resource mix supports a payback within 42 months at base case metal prices (Au A$5,950/oz, Ag A$85/oz), underscoring project viability without reliance on Inferred Resources in the early stages.
Advancing Resource Confidence and Project Development
Legacy Minerals plans to progress Mt Carrington into the Pre-Feasibility Study phase, focusing on targeted drilling to convert Inferred Resources to Indicated within Stage 1 and Stage 2 pit footprints. This drilling campaign aims to increase geological confidence, improve grade control, and support better financing terms. The company also intends to undertake further metallurgical test work to optimise recoveries and refine the flotation flowsheet.
The Scoping Study highlights several avenues to enhance project value, including potential plant throughput expansion beyond 1 Mtpa, incorporation of additional silver and base metal resources such as zinc and copper, and optimisation of concentrate blending to maximise payability. These opportunities could materially increase cash flow and extend the mine life.
Importantly, Legacy Minerals enters these next phases well funded, with approximately A$8 million in cash, following a series of capital raises and exploration successes at Mt Carrington, including promising drill results at the Mascotte Prospect. The company’s recent pending assay results and new gold discovery underpin ongoing confidence in resource expansion potential.
Key Risks and Funding Considerations
While the Scoping Study presents a strong development case, it carries the usual caveats of a preliminary technical and economic assessment with ±30% to +45% accuracy. Material assumptions include the availability of approximately A$220.5 million in funding, which has not yet been secured. Funding could come through debt, equity, or alternative strategies, potentially dilutive to existing shareholders.
Other risks include hydrological uncertainties, closure planning, and the need for detailed geotechnical and environmental studies. Commodity price volatility remains a key sensitivity, with gold and silver prices materially impacting project valuation as demonstrated by sensitivity analyses.
Legacy Minerals acknowledges these challenges but highlights the brownfield nature of Mt Carrington, existing infrastructure, and the conventional mining and processing methods as factors mitigating execution risk. The company is also engaging with potential offtake partners and advancing permitting and community engagement efforts.
Bottom Line?
Legacy Minerals’ Mt Carrington Scoping Study sets a solid foundation, but upcoming drilling and funding moves will be critical to transforming potential into production.
Questions in the middle?
- How will Legacy Minerals secure the A$220.5 million funding required for development?
- What impact will converting Inferred to Indicated Resources have on project risk and financing terms?
- Can Mt Carrington’s processing capacity and base metal credits be expanded to boost returns?