A recently completed technical report concludes that mining of Orphan Boy Resources‘ (ORS-V) Willa gold-copper-silver deposit in southern British Columbia, would not be economically viable at current metal prices.
The study considered the economics of a proposed 500-tonne-per-day underground mine, with ore trucked to the company’s 1,000-tonne-per-day Goldstream plant for processing. While the plan is technically feasible, the report concludes that a significant and sustained appreciation of the gold price would be required to its improve economics.
The report indicates that for the $7.6-million project to yield a pre-tax internal rate of return of 15%, the gold price would need to be US$612 per oz. That figure also assumes a static silver price of US$7.26 per oz. and copper price of US$1.73 per lb.
The required gold price could be trimmed to US$475 per oz. if the company sourced supplemental ores to optimize operations at the Goldstream plant. The plan would see Goldstream run on an 8-day operating and 8-day standby schedule. Under the plan some $3 million worth of Goldstream capital would be allocated to Willa based on tonnes processed. Operating costs are pegged at $83 per tonne.
The company is currently seeking ore from other sources.
In the meantime, the study suggest that Orphan Boy look at developing a modular processing plant close to Willa in order to eliminate the $32-per-tonne charge on trucking ore to Goldstream.
Recommendations also include additional exploration at and around Willa, and the continuation of the permitting process in anticipation of positive changes in metal prices and further resource definition.
The study was based on measured resources totalling 496,000 tonnes grading 7.18 grams gold per tonne, 0.94% copper and 12.16 grams silver.
Earlier this year, engineering consultant Hatch indicated in its development and operating plan that the erratic nature of mineralization within the Willa deposit host breccia would make development of a cost effective underground mining scheme challenging.
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