Drake Project Shines with A$303 Million NPV in Latest Scoping Study
Legacy Minerals Drake Project scoping study has demonstrated exceptional economics following the completion of a Stage 1 Scoping Study, positioning the company for significant growth in the gold sector. With a pre-tax NPV of A$303 million and an IRR of 120% at a base case gold price of A$4,250/oz, the project showcases robust potential for shareholders.
Outstanding Economics Reveal Compelling Value Proposition
The recently completed Stage 1 Scoping Study demonstrates the Drake Project's potential to deliver remarkable returns. Using a conservative base case gold price of A$4,250/oz (well below current spot prices), the study highlights:
- Pre-tax NPV (8%) of A$303 million
- Internal Rate of Return (IRR) of 120%
- Pre-tax free cash flow of A$325 million
- Short payback period of just 14 months
- All-in-sustaining cost of A$1,709/oz
These results represent a significant improvement over the 2020 Pre-feasibility Study, with the NPV increasing by an impressive 206% from the previous A$132 million (at A$2,300/oz in 2020).
At a gold price of A$5,000/oz, the project economics become even more compelling with an NPV of A$404 million and an IRR of 151%, demonstrating substantial upside potential as gold market trends strengthen.
Efficient Production Profile Leverages Existing Infrastructure
The project is designed to deliver consistent gold production over an initial 5.5-year mine life:
- Average annual gold production of 35,230oz
- Total gold production of 177,100oz
- Processing of 5.27 million tonnes at an average grade of 1.26g/t Au
- Gold recovery rate of 83%
A key advantage of the Drake Project is the value of already-built infrastructure, including haul roads, water supply, and a tailings dam, which has helped keep the capital expenditure to a modest A$47 million. This existing infrastructure significantly enhances the project's economic viability and reduces development time.
Understanding Open-Pit Mining Methods
At the Drake Project, Legacy Minerals plans to employ open-pit mining methods, which offer several advantages over underground mining for this type of deposit.
Open-pit mining involves the extraction of minerals by removing overlying rock and soil to access the valuable resources beneath. This method is typically used when deposits are located close to the surface and is generally more cost-effective for lower-grade, larger tonnage operations.
Why Open-Pit Mining Makes Sense for Drake:
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Lower Operating Costs: Open-pit mining typically has lower extraction costs per tonne compared to underground mining, making it suitable for the 1.26g/t Au grade at Drake.
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Higher Recovery Rates: The method allows for more complete extraction of the orebody, with less selective mining required.
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Safety Advantages: Generally safer than underground operations with fewer confined space hazards.
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Operational Flexibility: Easier to scale production up or down based on market conditions.
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Existing Infrastructure: The project benefits from pre-existing haul roads and other infrastructure, reducing development costs.
The 1 million tonne per annum processing plant planned for the Drake Project aligns perfectly with the mining method chosen, providing the capacity to efficiently process the extracted ore throughout the mine life.
Significant Resource Growth Potential
The Stage 1 Scoping Study represents just the beginning of Drake's potential. Notably, the study does not include 450,000oz of gold and 24.3 million oz of silver defined in the recently updated 2025 Mineral Resource Estimate, pointing to substantial upside in a potential Stage 2 Study.
The broader Drake Project resource includes:
- 0.8 million oz Gold-Equivalent from two gold-rich deposits (23.1Mt at 1.1g/t AuEq)
- 35 million oz Silver-Equivalent from two silver-rich deposits (11.3Mt at 99g/t AgEq)
These resources, particularly the silver component, represent significant additional value that could be realised in future development stages. In addition, this approach to sustainable resource development mirrors other innovative projects such as Greenland's Malmbjerg project which is setting new standards in the industry.
Multiple Exploration Catalysts on Horizon
Legacy Minerals has completed an airborne mobile-magnetotelluric geophysical survey at Drake, providing the first systematic look at the broader region in 30 years. This advanced geophysical technique has proven highly successful in similar epithermal settings globally, most notably at K92 Mining's Kainantu project, which grew from 0.88Moz AuEq in 2015 to 18Moz AuEq in 2024.
Additionally, the company awaits assay results from six previously unsampled historical diamond drill-core holes, which could further expand the resource base. The Legacy Minerals Drake Project scoping study results come at a time when the gold market outlook remains positive amid bond market uncertainty.
Why Investors Should Follow Legacy Minerals
Legacy Minerals presents a compelling investment case for several key reasons:
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Proven Project Economics: The A$303 million NPV and 120% IRR at conservative gold prices demonstrate exceptional value with minimal capital requirements.
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Significant Expansion Potential: With 450,000oz gold and 24.3Moz silver resources not yet included in development plans, substantial upside exists.
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Infrastructure Advantage: Existing infrastructure significantly reduces capital expenditure and development time.
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Strong Gold Market: With gold prices reaching record highs in 2024, the timing for development is ideal.
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Exploration Upside: The Drake Project's 390km² license area remains largely untested, with modern geophysical techniques now being applied across the property.
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Experienced Management: CEO Christopher Byrne and the technical team have demonstrated their ability to advance the project efficiently and create value.
With an initial 5.5-year mine life, strong economics, and multiple avenues for resource growth, Legacy Minerals is positioned to become a significant gold producer in Australia. The combination of near-term production potential and extensive exploration upside creates a balanced opportunity with both immediate and long-term value creation potential for junior mining investors.
Furthermore, the project's focus on efficiency aligns with broader industry trends toward innovative extraction technologies that optimize resource utilization.
Key Takeaway: Legacy Minerals has positioned itself as an emerging player in Australia's gold sector, with the Drake Project scoping study demonstrating exceptional economics (A$303M NPV) at conservative gold prices. With significant resource growth potential, existing infrastructure advantages, and upcoming exploration catalysts, investors should closely monitor developments as the company advances toward production.
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