Batman study is positive, says Vista Gold

Vista Gold (VGZ-T, VGZ-N) plans to move ahead with a prefeasibility study on the Batman deposit at its Mt. Todd gold project in Australia’s Northern Territory after learning the results of a preliminary economic assessment.

President and chief operating officer, Fred Earnest said the last two years of exploration work has paid off.

“The results of the PEA are very encouraging,” Earnest said in a statement.

The study looked at three different scenarios using a US$750 per oz. gold price. The first considered mining measured, indicated and inferred resources from an open pit at a rate of 30,000 tonnes of ore per day grading 0.42 gram gold per tonne. The mine would be in production for 15.2 years and would produce 3.7 million oz. gold over that time span.

The project would have a pre-tax net present value of US$233 million and an internal rate of return of 21.6%. Capital costs would be US$323 million and life of mine capital would be US$418 million.

The next scenario, also a 30,000 tonne per day open pit, considered only measured and indicated resources, resulting in lower production of 2.6 million oz. over a shorter mine life of 8.9 years. The average gold grade was higher at 0.58 gram gold per tonne.

This time the pre-tax NPV is around US$212 million with an IRR of 23.1%. Capital costs were estimated at US$340 million with US$380 million for life of mine costs.

And finally in the third scenario, the study again considered measured, indicated and inferred resources but this time with a lower average grade of 0.34 gram gold per tonne and an operation that is twice the size, mining 60,000 tonnes of ore per day. Total production was estimated at 5.1 million oz. gold over 11.9 years.

The pre-tax NPV was US$302 million and the IRR was 20.4%. Capital costs would be US$494 million while life of mine capital was put at US$567 million.

The Batman deposit has measured and indicated resources of 191 million tonnes grading 0.84 gram gold per tonne for a total of 5.1 million oz. gold.

Inferred resources stand at 94 million tonnes grading 0.74 gram gold per tonne for 2.2 million oz. gold.