News: Exterra Resources reveals robust mine metrics for Second Fortune

Exterra Resources (ASX:EXC) has revealed economic results from the Pre-Feasibility Study into the viability of mining existing gold resources at the Second Fortune underground mine at Exterra’s Linden Gold Project near Kalgoorlie in Western Australia.

The PFS has confirmed a robust, low capital, low operating cost, gold mining project, with average annualised production of 20,000 ounces.

Projected mine revenue came in at A$80 million at current A$1400 per ounce gold prices, from a mining Inventory of 61,500 ounces at 9.4 g/t gold.

Production of 56,600 ounces is expected LOM, with low C1 cash operating costs of A$720 per ounce of gold recovered, and very modest pre-production capital cost of A$5 million.

Notably, the Main Lode remains open at depth and along strike, and adjacent Footwall and Hanging Wall lodes contain further resources of 54,600 ozs.

Exterra intersected visible gold in numerous recent holes at Linden, with assays awaited.

The Exterra PFS is based on underground mining of the main lode with ore processed off-site under an Ore Purchase Heads of Agreement with Saracen Gold Mines (ASX:SAR).

Ore would be delivered to Saracen’s Carosue Dam processing plant 80 kilometres away.

Exterra has all regulatory Approvals in place to commence mining at Second Fortune, and the project is expected to deliver free cash of $17 million over the initial mine life of 2.5 years.

This includes capital pay back, taxes, royalties and other operating costs.

Exterra is modestly valued at $4.5 million and holds around $600,000 in cash.