Regis Resources has revealed that key components of the McPhillamys gold project in New South Wales will cost a little over $1 billion.
McPhillamys is one of Australia’s largest undeveloped open pit gold projects capable of producing up to 200,000 ounces per annum.
In a definitive feasibility study (DFS) update, Regis said the total construction cost of the project is estimated to be around $845–$900 million, with pre-production costs equalling about $115–$155 million.
About $210–$220 million is expected to go towards McPhillamys bulk earthworks, tailings storage facility and surface water management, $370–$400 million for the process plant, and $160–$165 million will be allocated to the pipeline.
The remaining $105–$115 million will go towards the project’s indirect costs and contingency.
In the McPhillamys preliminary feasibility study from September 2017, Regis estimated that the total capital cost would be $215 million.
“The general cost inflation seen globally for construction and permitting required scope increases have clearly escalated costs for McPhillamys,” Regis Resources managing director Jim Beyer said. “We are taking the necessary time to reduce, as far as we can, the capital required to bring McPhillamys into production through value engineering optimisation.
“McPhillamys is a key part of Regis’ future growth and remains an attractive gold project that, at current gold prices and under our current all-in sustaining cost assumptions, delivers strong margins with clear upside potential via this rising gold price environment and with mine-life extension opportunities that go well beyond the current plans.”
Regis said its McPhillamys project team and technical specialists will continue reviewing opportunities to optimise the project’s key capital items while exploring alternative development and operational efficiencies.
Regis estimates it will complete the McPhillamys DFS by the end of the 2023–24 financial year.
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