Stavely Scoping Study Flags $818M NPV, 2.5-Year Payback

Stavely Minerals (ASX:SVY) has completed a scoping study for the Thursday's gossan and Cayley lode deposits at its 100%-owned Stavely project in western Victoria. The study puts a pre-tax net present value of $818 million at a 7% discount rate on a standalone copper-gold-silver operation.

The development plan envisages a conventional processing plant with a crushing and grinding circuit and sulphide flotation, running at 4 million tonnes a year. The study is based on a mineral resource of 59 million tonnes at 0.58% copper equivalent. At that throughput the resource supports a mine life of roughly 15 years.

Stavely Minerals said the project would pay back its initial capital in 2.5 years of production, with average annual free cashflow of $110 million and net cashflow from operations of $1.4 billion over the mine's life. All-in sustaining costs are US$3.76 per pound of copper equivalent for the life of mine, falling to US$2.75 per pound in the first three years. Copper prices have held above US$4 a pound for much of the past two years, above the study's cost assumptions.

The 0.58% copper equivalent grade is modest, and the economics lean on the gold and silver by-product credits baked into that calculation. The first three years of production carry the lower all-in cost, which supports the payback profile before costs rise toward the life-of-mine average. Gold's record run this year has made those credits more valuable, a point covered in our gold profile.