Gold and copper explorer Alice Queen has released an updated mineral resource estimate and the results from a scoping study centred on the historical open pit mine area at its Horn Island gold project, in the Torres Strait.

With an estimated cost of $75 million to bring online, the mine is expected to return that sum within 27 months of starting.

The proposed mine would produce about 37,000 oz of gold per annum and run for about 8.5 years.

However Alice Queen managing director Andrew Buxton said this could be considered a base case, as the company believed there were real opportunities to find significantly more gold on Horn Island.

“Accordingly, while we are very pleased with the results of the scoping study, we are also keenly focused on our forthcoming exploration programs to ensure sure they are as aggressive and effective as possible,” he said.

“In this way we leverage the opportunity, of what we can now consider the base case for the Horn Island gold mine, to one with significantly greater scale.”

The mineral resource estimate for the project stands at 16.7Mt grading at 0.98g/t gold, containing 524,000 ounces of gold.

Alice Queen said the scoping study established a business case to support further studies leading to development of an open pit mine, commencing with a starter pit at the site of the historical open pit at Horn Island.

Due to the nature of the deposit, the study found there was significant opportunity to remove large amounts of waste rock through pre-concentration.

This would reduce the scale of the mill required, enhancing the overall economics of the project.

Scoping Study Highlights

• Life of mine 8.5 years
• Average production rate of 37koz gold per annum
• Mill feed to waste ratio 2.5:1
• Initial capital cost $75M
• Capital payback period of 27 months (2.25 years)
• Net cashflow of ~$200M
• Net Present Value (NPV) @ 5 per cent discount of ~$140M
• Internal Rate of Return (IRR) of 44.3 per cent
• All-in Sustaining Costs (AISC) of $1388/oz