Wallbridge Mining Co. Ltd. on Feb. 2 said a pre-feasibility study on its Fenelon gold property in Quebec estimated a posttax net present value, discounted at 5%, of C$2.8 million, with a 60% internal rate of return.

Initial construction CapEx was estimated at C$5.2 million, with operating costs expected to average US$1,056 per ounce of gold. The company will seek funding for initial costs through a variety of options including off-take partners.

The study defined a pretax net cash flow of C$6.6 million with a 12-month payback period for an initial mine life of about 18 months. The initial mine life is based on reserves located above 100 meters depth and near the existing ramp.

Fenelon hosts proven and probable reserves containing 28,922 ounces of gold within 96,721 tonnes grading 9.30 g/t.

"The next key step in the development of Fenelon is the continuation of the permitting process as well as exploration around the existing deposit to add potential ounces and extend mine life," Wallbridge CEO Marz Kord commented.

The company also intends to continue with required studies ahead of making a production decision in the second quarter.

"With recent exploration results at Fenelon, we are optimistic that we can add additional ounces with very limited drilling by initially pursuing high-quality targets around the existing deposit," Kord added. "This exploration effort will continue from underground when in production in order to expand the deposit to depth and along strike."