Scottie Resources (TSXV: SCOT) has completed a preliminary economic assessment for their flagship Scottie Gold Mine project in British Columbia. The study is based on a direct ship ore development scenario, which removes the need for significant on-site processing.
The study has outlined a base case net present value of $215.8 million using a 5% discount rate and $2,600 an ounce gold under a proposed scenario that would see average annual production of 65,400 ounces of gold over a seven year mine life.
The study envisions the operation would commence with the open pit mining of the Blueberry Contact Zone, which is then followed up with underground mining at the same zone, followed by the Scottie Gold Mine. Mined material would be jaw crushed and sorted using an XRF-based ore sorting system to reduce dilution, with the product then transported to the Stewart, BC, bulk shipping facility for shipment overseas.
Average mining throughput under this scenario is estimated at 900 tonnes per day, with 2.1 million tonnes being processed over the life of mine. Average head grades are estimated at 6.86 g/t gold, while recoveries are pegged at 94.7%.
Initial capital costs under this scenario are estimated at $128.6 million, which is considerably lower than peer estimates as a result of the lack of a need for a mill or tailings facilities. Sustaining capital costs meanwhile are estimated at $76.7 million, while operating costs over the life of mine are estimated at US$1,452 an ounce.
Under this scenario, the IRR is estimated at 60.3%, with a payback period of just 1.2 years based on $2,600 an ounce gold. At $4,200 an ounce gold, the NPV climbs to $831.7 million, alongside an IRR of 153.2% and a payback period of 0.6 years.
One recommendation provided in the report however suggests that toll milling could occur at the nearby Premier Mill, although no agreement is currently in place. Found halfway to Stewart along the current trucking route, the report suggests that based on a feasibility study conducted at the mill in 2020, and with a standard toll milling premium applied, the use of toll milling could reduce all in sustaining costs for Scottie to just US$935 an ounce. Under this scenario, the net present value of the Scottie Gold Mine project limbs to $380.1 million.
“The Direct Ship Ore (“DSO”) PEA marks a major milestone for Scottie. It highlights a simple, low-capex project with robust economics and clear growth potential through ongoing discovery. The DSO scenario eliminates the need for a mill or tailings facility, streamlining both permitting and construction. In addition, the optionality of toll milling at a nearby facility presents a clear, low-risk development pathway with meaningful upside,” commented Brad Rourke, CEO of Scottie Resources.
The company is now working towards the completion of a feasibility study, which is slated for release in Q1 2027, after which a final production decision is expected to be made. The budget for the study, alongside ongoing exploration work and related technical work, is estimated at $25 million.
Scottie Resources last traded at $1.72 on the TSX Venture.
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