Ann: Korbel Gold Project Starter Pit Scoping Study, page-358

Mining News

Nova scoping study suggests resilient Korbel starter pit

The junior has completed ascoping study, and has been so impressed with the initial results, and clearpathway to improvements mapped out, it has moved into a full prefeasibilitystudy, with the results expected in late 2023.

The starter pit scoping work focusedon the potential for a large, stand-alone, bulk tonnage open pit miningoperation at the 8.1 million ounce at 0.3 grams per tonne Korbel Main deposit,with the outcomes expected to be improved with recent resource estimatesdelivered post-study for the wider Korbel area and the higher-grade 1.5Mozgrading 2gpt RPM project.

The study considered a 15-yearevaluation period, with a payback of three years, assuming a gold price of$1750/oz and all-in sustaining costs of US$879/oz, or life of mine AISC of$1120/oz.

Net present value and pre-taxinternal rate of return were put at $381 million and 20.4%, but the project isdescribed as resilient at a range of future gold price scenarios once it getsgoing, even before adding in new discoveries such as RPM North, or economies ofscale from future expansions.

Production for the payback periodis expected to be an average 186,000oz, with targeted recovery of 1.95Moz overthe life of mine, generating revenue of over $3 billion.

The deposit's low stripping ratioand use of ore sorting to upgrade the low-grade resource to a higher 1gpt headgrade for mill feed are critical to success in the initial years.

Head grade currently falls to0.7gpt over the project life.

The cost for installing asizeable 6Mtpa mill and infrastructure is US$425 million, inclusive of $57million for the mining fleet equipment and contingencies.

Recoveries, assumed to be 88%,have been found to be much higher in initial tests.

Despite the high up-front costs,which are five times Nova's current market capitalisation, CEO ChristopherGerteisen claimed it was clear the emerging Estelle trend offered a path torapid development of a significant new source of gold into global markets.

He said Nova was positioningitself to "supply a market with a strong appetite for gold which continuesto gain momentum as high inflation globally, government deficits and centralbanks continue with their stimulus programs".

"Bottom line, gold is money,always has been, always will be, and Nova is in the business to produce gold,lots of it," he said.

With the starter pit studyexceeding many in-house expectations, he said the company was focused onimproving its new baseline, with multiple rigs being deployed in 2022 to drillout RPM North, upgrade confidence in the 6.6Moz inferred resources, and testmultiple prospects within the 450sq.km project area, all for inclusion in thePFS.

Gerteisen said the scoping studywas "just the start" of developing Korbel into a tier one gold mine.

Nova's shares have traded betweenA56c and $2 over the past year, closing yesterday at 61c. At that level it wascapitalised at $110 million.

The company commenced 2022 withcash and investments of $41 million, including its 57.5% interest in itsrecently spun-out lithium interests Snow Lake Resources, which raised US$24million to list in the NASDAQ.