The feasibility study envisions a technically straightforward open pit mine and run-of-mine heap leach operation with a 10.5-year operating life and total gold production of over one million ounces. Average gold production is expected to be 152,000 ounces annually in the first four years.
The initial capital cost of US$190 million reflects the current cost environment and an increase in the scope and scale of the project, the company said in a press release that came after the close of trading on February 23, 2022.
The company said Orion Mine Finance has agreed to provide the company with a term sheet of up to US$200 million to support the construction effort.
Gold standard is a 9.9% owned affiliate of Newmont Goldcorp Corp., [NGT-TSX, NEM-NYSE], the worldâ€™s largest gold producer. Another key shareholder is OceanaGold [OGC-TSX, OCGT-ASX], which has 15.8%.
Gold Standard has a large property-positions on both the Carlin and Battle Mountain gold trends, the most productive gold producing areas in Nevada. The companyâ€™s flagship project, the Railroad-Pinion Gold Project, is located on the Carlin Trend. It has another property, the Lewis Project, located on the Battle Mountain Trend.
The Railroad-Pinion Project has two adjacent parts: the North Railroad portion, which includes the POD, Sweet Hollow, and North Bullion deposits, collectively known as the North Bullion Deposit, and the South Railroad portion, which includes the Dark Star, the Pinion Deposit, and the Jasperoid Wash Deposit.
â€œThe mine plan outlines robust free cash flow generation, specifically in the first four years as we mine the Dark Star pit,â€ said Gold Standard CEO Jason Attew.
Dark Star is estimated to contain a measured and indicated resource of 913,000 ounces of gold. On top of that is an inferred resource of 19,000 ounces. Total open pit resources at the project stand at 1.8 million ounces of gold in the measured and indicated category, as well as 650,000 ounces in the inferred category.
â€œAt spot gold price South Railroad is estimated to generate free cash flow of US$130 million per annum over the first four years, which will provide flexibility to increase exploration across our vast land package, invest in value accretive operational excellence initiatives and strengthen the corporate balance sheet.â€™â€™
Attew said the companyâ€™s focus now shifts to continuing to advance its permitting application and kicking off the construction capital financing process, both of which will continue to de-risk the project and add value for shareholders, Attew said.
Gold Standard is currently well-financed to carry out post-feasibility activities with a $23 million cash balance as of December 31, 2021.
On February 23, 2022, Gold Standard shares closed at 51 cents and currently trade in a 52-week range of 89 cents and 47.5 cents.