Stavely Minerals’ Scoping Study Highlights A$818M NPV and 13-Year Copper Project

• Pre-tax NPV7 of A$818 million and IRR of 40%
• 13-year open pit mine life with 210,000 tonnes CuEq production
• Estimated A$472 million pre-production capital required
• 75% of scheduled production value from Indicated Resources
• Potential underground mining excluded from current study

Robust Economic Outlook from Scoping Study

Stavely Minerals (ASX:SVY) has unveiled a detailed Scoping Study for its Thursday’s Gossan and Cayley Lode copper-gold-silver deposits within the 100%-owned Stavely Project in western Victoria. The study envisages a 13-year open pit operation feeding a standalone 4Mtpa processing plant, delivering compelling economics highlighted by a pre-tax net present value (NPV7) of A$818 million and an internal rate of return (IRR) of 40%. The project targets a rapid capital payback within 2.5 years of production commencement, with average annual free cash flow estimated at around A$110 million.

Over the life of mine, the operation is forecast to produce 210,000 tonnes of copper equivalent metal in concentrate, comprising approximately 170,000 tonnes of copper, 66,000 ounces of gold, and 3.3 million ounces of silver. All-in sustaining costs (AISC) are estimated at US$3.76/lb CuEq over the life of mine, dropping to US$2.75/lb CuEq in the first three years, underscoring the project’s potential competitiveness in the copper market.

Resource Base and Production Schedule

The Scoping Study is underpinned by a Mineral Resource Estimate (MRE) of 59 million tonnes at 0.58% CuEq grade, prepared by ERM Australia Consultants. Approximately 75% of the scheduled production value by net smelter return (NSR) comes from Indicated Resources, with the remaining 25% from Inferred Resources. Notably, the first 10 quarters of production rely on 96% Indicated Resources by NSR value, ensuring early-stage financial viability independent of the lower-confidence Inferred Resources.

Mining is planned from a single open pit with a 2.5:1 waste-to-ore strip ratio, sequenced in three stages to prioritise higher-grade feed from the Cayley Lode early in the mine life. The processing plant design incorporates conventional crushing, grinding, and sulphide flotation circuits, producing a 24% copper concentrate for export via road transport to the Port of Portland.

Capital and Operating Costs with Funding Considerations

The study estimates total pre-production capital expenditure of approximately A$472 million, split between A$333 million for the process plant and mine-site infrastructure post-final investment decision (FID), and A$139 million for pre-production activities including open pit pre-stripping. Operating costs are benchmarked at A$17.51 per tonne milled for processing, with mining costs averaging A$6.54 per tonne mined.

Stavely Minerals acknowledges the need for further technical studies, including Pre-Feasibility and Feasibility Studies, which will require additional funding not yet estimated. While the company expresses confidence in securing development capital based on its current cash position, management track record, and favourable copper price outlook, it cautions that funding availability is not guaranteed and may involve equity dilution or alternative value realisation strategies such as partial sales or joint ventures.

Metallurgical and Mining Insights

Extensive metallurgical testwork by Strategic Metallurgy Pty Ltd confirms that all ore types from the deposit can be processed via conventional flotation to produce saleable copper concentrates with recoveries ranging from 75% to 89% depending on ore type. The study highlights challenges such as fine-grained chalcopyrite intergrown with pyrite causing some copper losses, and oxidation effects in the chalcocite blanket requiring sulfidisation treatment.

Mining studies by Entech Mining Consultants model a three-stage open pit with detailed scheduling to maximise early cash flow. Potential underground mining opportunities at depth have been identified through mineable shape optimisation software but are excluded from the current economic evaluation pending further drilling and study.

Regulatory and Environmental Considerations

The deposits are held under Retention Licence 2017, with a 10-year term renewable at the Minister’s discretion. The project will require a series of approvals including an Environmental Effects Statement (EES) by the Victorian Minister for Planning, followed by mining licences and various local government permits. The site is located on freehold land primarily used for broad-acre cropping, with no native title claims affecting the immediate area. Stavely Minerals has executed a Cultural Heritage Agreement with the Eastern Maar people.

While two recent mine approvals and exploration decline permits in Victoria signal a potentially supportive regulatory environment, the Thursday’s Gossan development would be the first major hard-rock open pit approval sought in decades, adding an element of regulatory risk and uncertainty to the project timeline.

Sensitivity and Risks

The project’s financial returns are highly sensitive to copper price fluctuations, which account for 81% of revenue. Sensitivity analysis shows that a 20% increase in copper price could nearly double the NPV to over A$1.2 billion, while a 20% decrease could reduce it to under A$400 million. Other variables such as operating costs, metallurgical recovery, and capital costs have more moderate impacts.

Investors should note the preliminary nature of the study, with a ±35% accuracy range and inclusion of Inferred Resources carrying geological uncertainty. Funding is not secured, and the company may need to pursue equity or joint venture options that could dilute current holdings. Regulatory approvals remain pending and could influence project development timing.

Bottom Line?

Thursday’s Gossan offers a strong foundation for a copper-gold-silver mine in Victoria, but funding, resource upgrades, and regulatory approvals remain key hurdles ahead.

Questions in the middle?

• Will Stavely Minerals secure the estimated A$472 million pre-production funding on favourable terms?
• Can further drilling upgrade Inferred Resources to Indicated and support underground mining potential?
• How will regulatory approvals and community engagement shape the project’s development timeline?