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Development path opens for PNX

PNX has unveiled a staged development
t has taken a bit of time and considerable duction as a gold miner, and then have the plan for its Fountain Head and Hayes
Ieffort to get to this point, but PNX Metals flexibility such that, at the appropriate time, Creeks projects in the Pine Creek region
Ltd managing director James Fox is de- we can bring the base metals online. Obvi-
lighted to be in a position where he can fi- ously when you have a modest mine life in
nally talk about the robust economics of the terms of the base metals, you’ve got to time it time and on budget, or very close to.”
company’s Fountain Head and Hayes Creek appropriately to make the best out of it.” Fox acknowledged the company also po-
projects. Around the same time as the PFS was tentially needed to get creative on the project
Earlier this year, PNX published a long- published in June, PNX submitted its EIS financing side of things given its current mar-
awaited PFS on the sequential development for Fountain Head to the NT Environmental ket cap sits at just over $25 million.
of Fountain Head (gold) and Hayes Creek Protection Authority. At the time of print, the “It’s our intent to fund the project in a man-
(gold-silver-zinc), both about 170km south company was working on some supplemen- ner that limits, as much as we can, any dilu-
of Darwin in the Northern Territory’s Pine tary information to support that work but was tion to existing investors,” he said.
Creek region. confident the required regulatory approval “Whilst there’s plenty of cash in the market
The study confirmed the technical and remained on scheduled for early next year. at the moment, although there’s been a few
economic viability of the staged develop- PNX is also working to improve the geo- speed bumps recently, raising cash at low
ment approach, beginning with construction logical confidence around some of its sat- market valuation is horrendous for existing
of a CIL plant capable of treating 750,000- ellite deposits, including Glencoe, just 3km shareholders and so our intent, our goal and
900,000 tpa of near-surface oxide and free north of Fountain Head. Drilling and explo- our strategy is to obviously try and finance
milling gold and silver ore from three open ration efforts in the region will continue as as much of this through a non-shareholder
pits at Fountain Head, Mt Bonnie and Glen- much as possible into the coming wet sea- equity basis to try and limit that dilution.
coe over an initial five-year period. son until access is ultimately curtailed. “We’re talking to a number of parties, in
It is proposed the plant will then be up- Como Engineers have also been conjunction with our existing shareholders,
graded to incorporate a sulphate flotation brought in to help fast-track the develop- as you would expect, to come up with a
circuit which can process the Hayes Creek ment of Fountain Head. The experienced package that allows us to continue to rapidly
ore into separate zinc and precious metals and well-regarded engineering group has advance the project.”
concentrates. been contracted under an early contractor Fox hoped the market would get behind
Capex is estimated at just $46 million, involvement agreement to deliver a design- what he believes is a simple gold story with
with a life-of-mine AISC of $1,119/oz gold and-construct proposal for the CIL plant for “achievable and reasonable” goals.
equivalent (net of zinc by-product credits). a fixed-duration, lump-sum price. “I know that modest-scale gold miners,
Other key financial outcomes included a Fox said the company viewed the appoint- such as what we’re planning to be, in that
pre-tax NPV of $171 million, IRR of 63% and ment of Como as a partnership rather than sort of 30,000-40,000 ozpa range, there’s a
undiscounted revenues of $972 million (net specifically as an engineering client for the little bit of a love-hate relationship there, but
of treatment, refining and transport charges) development of a project. our goal is all about baby steps and starting
over the 10-year mine life. Payback occurs “We’re trying to be slightly creative and ob- with something relatively simple in the grand
within 18 months. viously find ways to mitigate the significant scheme of things,” he said.
“It’s the first time that we’ve been in a po- impediments we’re seeing in the market at “The scale we’re talking about is very man-
sition to pool all of our NT assets together the moment regarding labour, cost of materi- ageable, I believe, particularly for a company
and demonstrate to our stakeholders how als, lead times on equipment, and so on,” he of our size. We’re not turning around saying
we propose to essentially monetise them, said. we’re going to be a 100,000 ozpa producer
for want of a better word,” Fox told Paydirt. “In our view, it’s very important to have in the next couple of years. We are trying to
“It’s taken a reasonable amount of time to a close relationship with your engineering do something we believe is achievable and
get to this point, but I think we’ve now dem- group, and we consider it more of a partner- reasonable and can provide a significant re-
onstrated there is a viable pathway to mon- ship to ensure that we can develop some- turn to our stakeholders.”
etise the gold and essentially get into pro- thing that we’re able to deliver ultimately on – Michael Washbourne

aUSTRaLIa’S PaYDIRT NOVeMBeR 2021 Page 69