U.S. Gold Corp has officially published the results from an updated pre-feasibility study (“PFS”) for its CK Gold Project in Wyoming, U.S.A.
According to certain reports, the stated PFS takes into account provisions from the completed permitting activities and optimization advances in engineering studies to show robust potential economic performance of CK.
Talk about the whole exercise on a slightly deeper level, it discovered that the site’s average gold equivalent (AuEq) production is of around 1,112,000 AuEq ounces over the mine life, or 111,250 AuEq ounces per year. The latter was markedly calculation on the assumption of a 10-year mine life.
Anyway, over the given period, US Gold’s PFS estimates total production of approximately 679,548 ounces of gold, 208.3 million pounds of copper, and 2.04 million ounces of silver.
Next up, we must dig into CK’s Base case Net Present Value, which was adjudged to be $459 million (pre-tax) at a discount rate of 5% and Internal Rate of Return (“IRR”) of 36.0%. Both the discount rate and IRR were reached upon with the price assumptions worth $2,100 per ounce of gold, $4.10 per pound of copper, and $27 per ounce of silver.
“We are pleased by the results of the pre-feasibility study update, which builds upon advanced work with our engineering consultant, Samuel Engineering Inc. (“Samuel”), originally contracted in 2022 to fast track toward a FS. Work on the FS was discontinued until the permits were in place, which also gave time, post COVID-19, for market uncertainties and inflation to subside. We now have an advanced updated glimpse of a very robust, high-value project poised for the next stages of engineering and development, following a board decision to proceed,” said George Bee, President and Chief Executive Officer of US Gold Corp.
The project payback also improved by 15%, and the NPV improved by 42% over the prior PFS study. The study also showcased potential higher price assumptions of $3,000 per ounce gold and $4.50 per pound copper, thus increasing the NPV to $952 million (pre-tax) with a 60.8% IRR.
Moving on, the study even found CK to boast mineral reserves of 1.672 million AuEq ounces. The whole lot includes 1.022 million ounces of gold, 259.7 million pounds of copper, and 3.008 million ounces of silver, marking a sizeable 16% increase over the AuEq ounces reflected in the prior PFS.
Another detail worth a mention here is rooted in the site’s aggregate potential that may provide significant upside potential for a new revenue stream, if US Gold can effectively use aggregate produced from mine waste.
With key groundwork already completed to facilitate fast-tracking, the stated PFS is tipped for completion by end of 2025. Making this all the more impressive is a fact that US Gold doesn’t expect any need for extensive fieldwork or major expenses to complete the study.
Even beyond the study, though, exploration potential is likely to remain on the site, potential to expand resources at depth and across the southeast of the main orebody. Assuming it is achieved, the company would succeed in extending mine life or increasing production.
Among other things, we must mention how US Gold’s PFS is based on a Mineral Reserve Estimate of 73.2 million tons at 0.014 ounces per ton (0.48 grams per tonne (“g/t”) for 1.672 million contained gold equivalent ounces. The study, in essence, considers simple surface truck shovel mining of the low 0.9 strip ratio (waste:ore) deposit, bearing a simple standard comminution and flotation flowsheet to process 7,200,000 tons of ore per annum,
The whole effort also outlines a 30-month construction period which will begin in late 2025, with initial gold concentrate production targeted for 2028 at the latest.
“With avenues to project financing which preserve shareholder positions through a number of arrangements that avoid overly dilutive equity offerings, we believe that development on the CK asset can proceed in the relative short-term, fulfilling the Company’s pivot to development of the CK Gold asset and ultimately allowing the Company to return to exploration in its high-potential exploration portfolio,” said Mr. Bee.
