Santana Minerals (ASX:SMI) has released pre-feasibility study (PFS) results for the Bendigo-Ophir Gold project in the Otago region of New Zealand, showing a high-margin, long-duration gold development with low capital costs.
The study estimates that the project, which includes both open-pit and underground mining, will produce 1.15 million ounces of gold over a 9.2-year period, with an average annual production of 125,000 ounces.
The PFS highlights a probable mineral reserve of 15.5 million tonnes (Mt) at 2.37 grams per tonne (g/t) for approximately 1.18 million ounces of gold. With strong gold prices, the project’s total sustaining cost (AISC) is expected to be A$1,416 per ounce, generating significant returns. Santana expects revenue of A$4.6 billion and EBITDA of A$3.1 billion at the current gold price of A$4,000 per ounce, with a net present value (NPV) after tax of A$1.06 billion and an impressive internal rate of return (IRR). ) by 68%. Initial capital expenditure, including plant and infrastructure, is estimated at A$340 million.
The Bendigo-Ophir project is located on private land with established infrastructure and is designated for New Zealand’s fast-track approval process. The processing plant, which uses Carbon-in-Leach (CIL) technology, is designed to recover 92.4% gold. This project could make a significant contribution to the New Zealand economy, with royalties and taxes estimated at A$1 billion over its lifetime.
CEO Damian Spring highlighted the project’s economic potential and alignment with Santana’s growth strategy, saying: “The Bendigo-Ophir project represents a transformative opportunity, both for Santana and the Otago region, with strong financial and operational parameters”.
Santana shares are trading 1.65% higher at 61.5 cents.