Egan Street Resources Ltd. said Dec. 13 that the results of a scoping study on its Rothsay gold project in Western Australia indicate that it will be a technically and financially viable operation.
As a result, the board has given its approval to go ahead with a feasibility study, which is due for completion in the second half of 2017.
The Rothsay project is expected to produce 101,000 ounces of gold over an initial 3.75 years for a capital outlay of about A$20.4 million and life-of-mine all-in sustaining costs of A$1,056 per ounce.
Peak production is tipped to be about 40,000 ounces each year when current surface stockpiles of 8,000 tonnes are included.
The scoping study estimates payback will be within 1.8 years, with Rothsay to generate a life-of-mine pretax operating cash surplus of A$26.7 million from revenue of A$161 million.
At a gold price of A$1,600 per ounce, the project has a pretax net present value of A$21.4 million and an internal rate of return of 40%.
Egan Street delivered the scoping study results three months to the day of listing on the ASX.