Nighthawk Gold Corp has put a C$654 million (US$480 million) development cost on a new large-scale gold mine in Canada’s Northwest Territories, described by CEO Keyvan Salehi as a potentially “phenomenal asset”.
The minnow’s share price jumped 20% on the release of a preliminary economic assessment for its Colomac gold project that hung a C$1.2 billion (US$880 million) after-tax net present value (5% discount rate) and 35% after-tax internal rate of return on an openpit and underground mine producing an average 290,000 ounces a year at US$828/oz AISC for about 11 years with gold at US$1600/oz.
NPV jumped to C$2 billion and after-tax IRR to 56% at a $2000/oz gold price.
Factoring in conventional surface and underground mine fleets, and a standard circa-6.1 million tonnes per annum comminution, gravity and leaching flowsheet at this stage, Nighthawk says its blueprint can deliver a carbon intensity of 0.48 tonnes CO2-equivalent per ounce for the projected 3.256 million ounces of gold produced over the current life-of-mine plan.
The company said 60% renewable “year-round” power would come from wind and solar generation and the balance from diesel generation with initial and sustaining capex for the “sustainable” component coming in at C$103 million and C$10 million, respectively.
Nighthawk is also contemplating phased construction of conventional tailings storage facilities.
The proposed mine, 200km north of Yellowknife, is a “top-tier North American mining project”, according to Salehi.
“Only a handful of gold projects in the world … owned by junior gold companies have similar favourable economics with the potential to deliver approximately 300,000 oz of annual gold production over a 10-year mine life and achieve an NPV5% to initial capex ratio close to 2.0.
“As such, we believe our project belongs to this rare class of global gold assets and that there is runway for the project to continue to grow as we start exploring for other meaningful deposits across our massive [c930sq.km] greenstone property.
“We strongly believe that this project PEA is the cornerstone of what could be a major gold camp.”
Nighthawk’s TSX share price rose nearly 21% Wednesday to C58c, capitalising the company at about C$72 million. The price is up nearly 50% year-to-date.