Legacy Minerals' Mt Carrington scoping study shows a $716m NPV and 38% IRR. The project targets 373k oz gold and 9.91m oz silver, moving to PFS with $8m cash.
Legacy Minerals (ASX: LGM) has cleared a critical hurdle for its Mt Carrington project in New South Wales, releasing a scoping study that outlines a 19-year mine life and robust pre-tax economics. By shifting toward a conventional 1 million tonne per annum open-pit operation, the company has moved the project from a conceptual asset to a development-ready candidate. The study, prepared by Ausenco, provides a quantitative baseline that allows investors to evaluate the project's sensitivity to metal price fluctuations and its potential for long-term cash generation.
The study presents two distinct valuation scenarios based on metal price assumptions. The spot case, which reflects current market conditions, yields a pre-tax net present value (NPV) of $716 million with an internal rate of return (IRR) of 38%. Under this scenario, the project achieves payback in 32 months. The base case, a more conservative model, still delivers a respectable pre-tax NPV of $542 million and an IRR of 32%, with a payback period of 36 months.
These figures are supported by a life-of-mine pre-tax free cash flow projection of $1.597 billion in the spot case. To unlock this value, Legacy Minerals faces an initial capital expenditure requirement of $220.5 million. This figure encompasses engineering, procurement, construction management, and contingency buffers. While this capital intensity is significant for a small-cap developer, the project benefits from existing brownfield infrastructure, including grid power access, established road networks, and historical tailings facilities, which help mitigate the execution risk typically associated with greenfield developments.
A pivotal change in the project’s design is the move to a cyanide-free flotation flowsheet. Historically, operations at Mt Carrington utilized carbon-in-leach circuits. The new design focuses on producing a bulk gold-silver sulphide concentrate through primary crushing, semi-autogenous grinding, and multi-stage flotation. This approach is intended to simplify the processing circuit and potentially improve environmental permitting timelines.
Life-of-mine recoveries are modeled at 78% for gold and 84% for silver. The mining plan targets 17.04 million tonnes of plant feed at a grade of 0.87 grams per tonne gold and 21.45 grams per tonne silver. The operation will extract material from eight shallow pits, including Strauss, Kylo, and Lady Hampden, maintaining a strip ratio of 3.06:1. By utilizing a staged mining schedule, the company aims to preserve a consistent feed grade profile, which is essential for maintaining the concentrate specifications required by third-party refineries.
Investors should note that the current scoping study is conservative regarding the project's total mineral inventory. The JORC 2012 resource estimate stands at 34.4 million tonnes at 104.7 grams per tonne silver equivalent, totaling approximately 115.8 million ounces. However, the production target only accounts for 17 million tonnes of that resource and excludes potential credits from zinc, lead, and copper.
There is approximately 180,000 tonnes of base metal content across the broader resource base that remains outside the current economic model. Furthermore, the company has identified near-mine exploration targets at Emu, Battery, and Mascotte that could extend the mine life or increase throughput beyond the current 1 million tonne per annum design. These factors suggest that the current NPV figures may represent a floor rather than a ceiling for the project's ultimate value.
Legacy Minerals enters the pre-feasibility study (PFS) phase with approximately $8 million in cash. This liquidity is earmarked for resource conversion drilling, metallurgical test work, and geotechnical assessments. The primary objective of this phase is to upgrade resources from the Inferred to the Indicated category, particularly in the early-mine areas.
This transition is critical for de-risking the project. While the scoping study provides a compelling roadmap, the PFS will need to confirm that the metallurgical recoveries can be sustained at scale and that the site’s hydrology and tailings management plans meet modern regulatory standards. For those tracking the company’s progress, the next concrete marker will be the successful conversion of these resources and the refinement of the flotation flowsheet. The project's ability to maintain its first-quartile all-in sustaining cost position—estimated at $1,061 per ounce of gold—will depend heavily on these technical validations.
For broader context on how small-cap miners navigate these development stages, see our stock market analysis section. While Legacy Minerals focuses on its gold-silver strategy, other firms in the sector are navigating different commodity cycles, such as those seen in Prairie Lithium's production targets or Axel REE's shift to in-situ recovery. Each of these projects faces unique technical and capital hurdles, highlighting the importance of rigorous scoping and pre-feasibility work in the current high-cost environment.
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