Prodigy Gold’s scoping study for the Hyperion Gold Deposit confirms a viable open pit project with a 4-year mine life and strong financial metrics, underpinned by a 454,000-ounce resource.
- Hyperion hosts 9.8Mt @ 1.4g/t Au for 454koz resource
- Open pit production target of 4.2Mt @ 1.9g/t Au for 260koz
- NPV10 of A$107M and IRR of 63% at A$4,250/oz gold price
- Capital costs estimated at A$24M with AISC around A$3,400/oz
- Resource remains open with potential for underground mining
Scoping Study Lays Out Clear Open Pit Development Pathway
Prodigy Gold NL (ASX:PRX) has unveiled a scoping study for its Hyperion Gold Deposit in the Tanami North project, Northern Territory, affirming the deposit’s potential as a straightforward open pit mining operation. The study is built on a solid Mineral Resource base of 9.8 million tonnes at 1.4 grams per tonne gold, equating to 454,000 ounces, with a high proportion in the Indicated category, which supports the development case.
The proposed mining plan targets three multi-staged open pits, designed to extract 4.2 million tonnes at a higher grade of 1.9g/t Au, producing approximately 260,000 ounces over four years of mining and five years of processing. The deposit’s geometry and continuity are well suited to conventional open pit extraction, with mining planned down to about 180 metres below surface.
Financially, the project shows promise with a net present value (NPV) at a 10% discount rate of A$107 million and an internal rate of return (IRR) of 63% based on a gold price of A$4,250 per ounce. These metrics improve significantly to an NPV of A$192 million and IRR of 106% at a gold price of A$4,750 per ounce, reflecting the sensitivity to gold price fluctuations. The payback period is estimated at 20 months at the base gold price, shrinking to just over a year at the higher price.
Metallurgy and Processing Options Highlighted
Metallurgical testwork confirms that Hyperion’s mineralisation is amenable to conventional carbon-in-leach (CIL) processing, with recoveries exceeding 95% for oxide and transitional material. Fresh rock recoveries are lower at 86% in the base case but could improve beyond 90% with the addition of flotation circuits, pending further studies. This simplicity in processing mitigates technical risk and aligns with regional precedents.
Notably, the scoping study assumes processing will occur off-site at a third-party facility, with ongoing discussions with potential partners such as Tanami Gold NL. However, no processing agreements are yet in place, adding a degree of uncertainty to the development timeline.
Resource Growth and Underground Potential Remain Untapped
While the study focuses on open pit mining, the deposit remains open along strike and at depth, with recent drilling revealing high-grade zones such as a 10-metre intercept at 15.9g/t Au in the Tethys lode. These deeper zones hint at underground mining potential that could extend the project’s life and improve economics, though this is not included in the current scoping study.
Prodigy Gold plans further drilling to upgrade Inferred Resources to Indicated and to expand the resource base. This builds on recent efforts that saw a 70% increase in indicated ounces at Hyperion earlier this year, underscoring the deposit’s evolving profile and the company’s commitment to advancing the project’s development stage Hyperion Indicated Ounces by 70 Percent.
Approvals, Infrastructure, and Environmental Studies Underway
Prodigy Gold is progressing environmental baseline studies and has lodged a Mineral Lease application, with negotiations ongoing with the Central Land Council representing Traditional Owners. The project lies on Aboriginal freehold land, and mining agreements under the Aboriginal Land Rights (NT) Act are required before mining can proceed.
Infrastructure plans include construction of access haul roads, a workforce accommodation village, offices, workshops, fuel facilities, and power supply. The company anticipates contract mining and haulage, with sustaining capital of approximately A$1.2 million per annum to maintain infrastructure.
Environmental considerations are critical, as the mining area is within an Indigenous Protected Area, potentially triggering a detailed Environmental Impact Statement. Prodigy Gold has engaged consultants to conduct flora, fauna, water, and waste rock studies to support approvals.
Financials Reflect Conservative Assumptions With Upside Potential
The study assumes capital expenditure of A$24 million to establish the site and infrastructure, with operating costs including mining, processing, haulage, administration, royalties, and gold sale costs summing to an all-in sustaining cost of around A$3,400 per ounce. This cost structure is benchmarked against similar Australian operations and allows for the remote location.
Revenue sensitivity analysis shows that every A$250 per ounce change in gold price affects project revenue by approximately A$57 million, highlighting the project’s leverage to gold price movements.
Prodigy Gold’s managing director, Mark Edwards, emphasised the project’s simplicity and growth potential, noting the deposit’s continuous mineralisation and straightforward metallurgy as key strengths. The company aims to advance the project through further drilling, metallurgical optimisation, and engineering studies towards a Pre-Feasibility Study stage.
The scoping study builds on a series of recent milestones including updated mineral resources and strong drilling results that have steadily de-risked the project Elevates Hyperion Resource with 70 Percent and Unveils Strong Drilling Results.
Bottom Line?
Hyperion’s scoping study charts a promising open pit path but hinges on securing processing agreements and advancing approvals amid ongoing resource growth efforts.
Questions in the middle?
- Will Prodigy Gold secure a processing agreement to underpin project economics?
- How quickly can the company upgrade Inferred Resources to Indicated to reduce geological uncertainty?
- What impact will environmental and Indigenous approvals have on the project timeline?