De Grey Mining continues to makes strides at its Hemi gold project in the Pilbara region of Western Australia, with the strong gold price doubling the site’s net present value.
The definitive feasibility study (DFS) from September 2023 had an estimated net present value (NPV) of $2.9 billion, conducted at a gold price of $2700 per ounce (oz).
Now, at the current price of $3950/oz, Hemi’s NPV is more than twice as high as the DFS estimate, demonstrating the project’s strong economics.
It’s milestones like this one that make it easy to understand why Hemi has received backing from the Federal Government, with De Grey securing a $150 million loan from the Northern Australia Infrastructure Facility (NAIF) during the September 2024 quarter.
The NAIF loan will form part of a planned $1 billion senior debt facility, with credit-approved term sheets already in place from commercial banks to cover the remaining amount. A $130 million cost overrun facility is included in the funding package, which remains on track for completion in the December 2024 quarter.
Hemi has also made great progress on an operational level.
Hemi’s front-end engineering design (FEED) achieved the 30 per cent milestone during the September 2024 quarter, with the preliminary hazard and operability and design reviews completed.
Reaching this stage of the FEED has allowed De Grey to facilitate the tendering of contracts, including the engineering, procurement and construction (EPC) and engineering, procurement and construction management (EPCM) tender documents for the Hemi processing plant. These tenders are expected to be returned during the December 2024 quarter.
De Grey also released a regional scoping study for Hemi during the September quarter, which demonstrated the potential to extend and increase the production profile of the project.
The study demonstrated that Hemi’s regional deposits could produce about 817,000oz averaging 142,000oz per annum over a six-year period, at an average operating cost of above $1800/oz.
On the exploration front, De Grey completed drilling beneath the DFS pit shells and current mineral resource at the Aquila and Crow deposits. The results demonstrated a large mineralised system that extends to depth and remains open.
De Grey is currently working on an updated mineral resource estimate that will include the drilling results from Aquila and Crow. It is due for release before the end of 2024.
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