Stavely’s A$818 million mine study now faces a funding test

Strong mine economics, limited cash runway

Stavely Minerals Limited (ASX:SVY) has outlined an A$818 million pre-tax NPV7 and 40% IRR for its Thursday’s Gossan copper-gold-silver development, but the headline project value arrives alongside a more immediate constraint: the explorer finished September with A$2.006 million in cash and no financing facilities, equivalent to 1.9 quarters of funding based on the latest reported outgoings.

The scoping study describes a 13-year, 4-million-tonne-a-year open-pit operation in western Victoria producing 210,439 tonnes of copper equivalent in concentrate. The plan would generate 170,249 tonnes of copper, 65,682 ounces of gold and 3.28 million ounces of silver, with the first three years forecast to average 24,300 tonnes of copper equivalent a year.

The study requires A$333.2 million for processing and infrastructure, plus A$138.5 million in capitalised pre-production mining expenditure, including pre-stripping. That puts total capital and pre-production mining costs at about A$471.7 million before any future underground expansion. The filing says the large-scale concept would typically require a strategic development partner or a sale to a larger multi-asset company, rather than presenting it as the only route forward.

Alternative mine plans target lower upfront capital

Stavely is now comparing a small-footprint underground mine focused on the 9.1-million-tonne Cayley Lode, a starter open pit that transitions underground, and a separate heap-leach option for the 22-million-tonne chalcocite-enriched blanket. The company expects these alternatives could produce lower NPVs than the large open-pit case, while potentially requiring less capital and delivering comparable IRRs.

The work extends the company’s alternative Thursday’s Gossan studies, which were reported as a response to the upfront funding burden of the larger mine. No preferred development pathway has been selected. The current production targets and financial forecasts also exclude any transition from open pit to underground mining, so the scoping-study figures should not be read as a full-life plan for the deposit.

There is another qualification in the numbers: the filing contains differing payback references. Its highlights cite about 2.5 years of production, while the detailed table gives 3.25 years from a final investment decision and 10 quarters from first ore. The study is preliminary, not a definitive feasibility study, and its economics are especially sensitive to copper prices: a 20% decline would reduce the pre-tax NPV7 from A$818 million to A$388 million under the company’s sensitivity analysis.

Freddy’s Find extends beneath shallow discovery

Exploration supplied a second positive thread. Diamond hole STDD002 at Freddy’s Find intersected 13.7 metres at 1.80g/t gold equivalent from 223.3 metres, within a broader 32-metre interval at 1.00g/t AuEq. The result included 4 metres at 3.41g/t AuEq and a 1-metre interval grading 7.03g/t AuEq.

The deeper result appears higher grade than the earlier shallow intercepts, extending mineralisation beneath up to about 50 metres of younger basalt cover. Stavely describes Freddy’s Find as part of a potentially larger porphyry-epithermal system, with the S4 porphyry prospect nearby and another magnetic destruction feature to the north. The gold-equivalent calculation assumes 80% silver recovery, however, and the company says no metallurgical testwork has yet been completed at Freddy’s Find. The latest result follows the Freddy’s Find discovery, which had identified mineralisation beneath the basalt cover.

Funding decision now sits beside exploration plans

Stavely reported net operating cash use of A$1.079 million for the quarter, including A$603,000 of exploration and evaluation spending, A$246,000 in exploration staff costs and A$336,000 in administrative and corporate costs. The company said next quarter’s exploration and corporate expenditure should be lower, partly because annual one-off costs fell in the September period.

The board said it continually monitors the cash position and that future fundraisings will be based on planned exploration programs. The immediate program includes completing and interpreting the Hawkstone moving-loop electromagnetic survey in Western Australia, while work at Thursday’s Gossan focuses on comparing development scenarios. That leaves Stavely with two linked tests: whether Freddy’s Find can grow into a meaningful discovery, and whether the company can fund the next stage of a project whose most attractive development case is still far beyond its current balance sheet.