Highland Gold Mining Ltd. said Feb. 7 that a pre-feasibility study for its Belaya Gora and Blagodatnoye gold operations in Russia pegged a net present value, discounted at 10%, of US$97 million and a 142% internal rate of return.
The study is based on an updated probable ore reserve of 932,000 ounces contained in 20.1 million tonnes grading 1.44 g/t for both the Belaya Gora and Blagodatnoye operations and a gold price of US$1,250 per ounce. The reserve is based on a variable cutoff grade for Belaya Gora of between 0.4 g/t and 2.05 g/t and of 0.77g/t for Blagodatnoye within an engineered pit design.
Estimated CapEx is US$15 million for the upgrades to the Belaya Gora processing plant, including adding a carbon-in-pulp circuit to improve recoveries from 72% to as much as 91% for Belaya Gora ore and 90% for Blagodatnoye ore.
An additional US$21 million in CapEx is needed in 2023 to move mining activity from Belaya Gora to Blagodatnoye, which includes purchasing a crushing circuit as well as road construction and upgrades and equipment replacement.
Average annual production is expected at 55,000 ounces over the combined life of the mines, expected until 2032, at an average total cash cost of US$802 per ounce and all-in sustaining costs of US$848 per ounce.
