Pacific Niugini's (ASX:PNR) managing director, Paul Cmrlec,...

Pacific Niugini's (ASX:PNR) managing director, Paul Cmrlec, discussed high-grade gold hits, near-term production and potential cash flows this week with investors in Melbourne and Sydney.

PNR is focussed on the re-commencement of gold production by mid-2015 from the Nicolsons Project near Halls Creek, Western Australia.

NPV and IRR metrics are impressive and highlight how robust the project economics are for Nicolsons. Total sustaining cost is estimated at A$854 per ounce while capital P&E cost is expected to be about A$107 per ounce.

FULL PRESENTATION HERE

It has also declared a maiden Mine Reserve of 435,455 tonnes at 6.17 grams per tonne gold for 86,362 ounces of gold. The project is on granted mining leases free of encumbrances.

The company is farming-in to the project, and ongoing project expenditure will earn PNR 80% of project. PNR has already completed expenditure to attain 65% ownership.

Halls Creek has low capital requirements such as pre-production capital of $11 million, and a short lead-in to production.


PNR outlined key metrics to investors including:

- Net Profit Before Tax: $58 million;

- Time to Positive Cash flow: 6 Months;

- Net Profit After Tax: $50 million;

- Annual Production: 130,000t, 30,000 Oz;

- NPV (8): $41 million;

- Mine Life: 4.5 years (including 6 month construction); and

- IRR: 167%.

The exploration expansion potential is also very high.