Mutiny Gold (ASX: MYG) has achieved another milestone in the development of the Deflector gold copper deposit with the granting of the Works Approval and Groundwater Operating Licence, with all other permitting for the project remaining on schedule.
Investors have begun to recognise the signficant progress made by Mutiny to date, with the Mutiny Gold share price climbing 35.3% since early June.
The importance of the Works Approval from the Department of Environment and Conservation is that in combination with the Clearing Permit (which is currently being assessed for approval by the Department of Mines and Petroleum), is that it allows for the upgrade of the Deflector treatment plant and camp.
The Groundwater Operating Licence granted by the Department of Water allows for sufficient water supplies to be extracted to supply the processing plant and mining activities during full production.
Another plus in the development of the project is that the Shire of Yalgoo has also shown its support by approving Mutiny's application to construct a haulage access intersection with the Morawa Yalgoo Road north of the Gullewa mine access.
John Greeve, managing director, said the company continues to tick all the boxes in its carefully planned campaign to commercialise Deflector.
"To outsiders, these may seem like minor achievements along the path to the development of a significant new Australian gold-copper mine, but for the team at Mutiny and our supporters it is an important milestone as we move towards bringing Deflector on stream in 2013 and work to grow the Company into a far larger gold-copper producing operation.
"The Mutiny team is also appreciative of the support we have received and continue to receive, from the relevant government agencies as we steadily move through this critical permitting process."
A Bankable Feasibility Study recently confirmed Deflector as a low cost, highly profitable, premium Gold-Copper project
Mutiny well supported and funded
At the end of last month Mutiny received a US$4 million first deposit on a non-interest bearing Commercial Agreement. Importantly - the deposit is intended as the precursor to a wider Agreement which will supplement the project finance requirements for the development of Deflector.
The Agreement enables the company to continue escalating its project development - whilst concluding the ongoing Project Finance arrangements with Credit Suisse and other financial institutions.
Bankable Feasibility Study re-cap
A Bankable Feasibility Study has already identified that Deflector could earn an estimated Net Operating Cash Flow of $342 million - and that is just the start.
The key financial outcomes of the study provide key financial parameters of Deflector and they are impressive, including Net Operating Cash Flow after debt (project finance) and taxes of $171 million; EBITDA of $323 million; Net Profit of $171 million; NPV at 8% of $103 million; Capital costs for plant construction of $66 million; Capital Costs for mine construction of $21 million; and IRR of 43%.
The study paves the way for the development of the project at an initial production rate of 55,000 gold ounces equivalent (annual range 44,600 in year one to 61,612 gold ounces equivalent).
There is a forecast low average operating cash cost of $621 per gold ounces equivalent and an initial mine life of 7 years, with a net operating cash flow of $324 million and internal rate of return of 43%, with a forecast net profit of $171 million and a net present value at 8% of $103 million.
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