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MacPhersons Resources' Gold Project At Nimbus Could Have Fast Payback Period

MacPhersons Resources (ASX: MRP) has stated that concurrent mining of its Boorara and MacPhersons gold open pit operations with the Nimbus Silver-Zinc-Gold Project in Western Australia could have a two to three year payback on capital.

Notably, it added the projects have more exploration upside with mineralisation open along strike and at depth.

"The initial mine designs and schedule appear to support a 5.5-year mine plan with a 2-3 year payback on capital," managing director Morrie Goodz said.

"The market stability and increase in commodity prices provide further confidence and margins since the model was developed."

Goodz is presenting a Feasibility Study Progress Update Report to various Commercial and Engineering firms.

The presentation includes indicative ranges on capex/opex parameters, mine design models and mining schedules for the Nimbus open pit and underground silver-gold-zinc operations, and the Boorara - MacPhersons gold operations.

The presentation highlights include:
- Mining schedule over 5.5 years;
- Concurrent mining of Nimbus Open Pit and Underground operations, followed by concurrent mining of Boorara and MacPhersons gold open pit operations;
- All in cash costs ranging between $12 per ounce to $16 per ounce silver and $600 per ounce to $1050 per ounce gold; and
- Silver and gold prices have increased by +20% and +12%, respectively, since the mine design model and schedule has been prepared.

Under the current schedule, the company will carry out plant expansion, mining pre-production and commissioning works in the first year before starting production in the second year.

Initial production in the second year is expected to be between 2 million and 2.5 million ounces of gold as well as 1,000 to 2,000 ounces of gold before ramping up to 3.5 million to 4 million ounces of silver and 16,000 to 20,000 ounces of gold in the third year.

Nimbus has a Resource of 1.1 million tonnes at 297 grams per tonne silver equivalent (203g/t silver plus 94g/t silver equivalent from gold and zinc credits while the Boorara and MachPhersons open pits have resources of 3,455,000 tonnes at 1g/t gold and 565,000 tonnes at 2g/t gold respectively.

Silver and gold prices were at US$23.85 per ounce and US$1389 per ounce respectively as of 9 September 2013, up from US$19.80 per ounce and US$1240 on 1 July 2013.

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