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Highlights

  • Stage 1 Scoping Study delivers robust economics with AU$303M NPV at $4,250/oz gold.

  • IRR hits 120%, with a 14-month payback and 5.5-year mine life.

  • Study excludes recently upgraded 2025 Mineral Resource Estimate.

  • Potential for further upside in Stage 2 Study and ongoing exploration.

Legacy Minerals Holdings Limited (ASX: LGM) has released a promising update from its Stage 1 Scoping Study at the Drake Epithermal Gold-Silver Project in New South Wales, following a review of the 2020 Pre-Feasibility Study by Mining Plus.

Economic Indicators

At a base-case gold price of AU$4,250/oz, the project shows a pre-tax Net Present Value (NPV) of AU$303 million and an Internal Rate of Return (IRR) of 120%, generating AU$325 million in free cash flow over a projected 5.5-year mine life.

Key metrics from the study include:

  • Average gold production: 35,230oz per annum

  • Total gold output: 177,100oz

  • All-in-sustaining cost (AISC): AU$1,709/oz

  • Gold recovery: 83%

  • Payback period: 14 months

The mine design is based on open-pit mining with a 1 million tonne per annum (Mtpa) processing plant. The upfront capital expenditure is AU$47 million, aided by the existing site infrastructure including haul roads, water supply, and a tailings dam.

At a higher gold price of AU$5,000/oz, the project's NPV rises to AU$404 million, with an IRR of 151% and AU$417 million in free cash flow.

Significant Upgrade from 2020 PFS

The new Scoping Study represents a 206% increase in NPV compared to the 2020 Pre-Feasibility Study, which assumed a gold price of AU$2,300/oz.

Pathway to Stage 2 and Resource Expansion

Legacy Minerals notes that Stage 1 does not include the recently updated 2025 Mineral Resource Estimate, which outlines:

  • 0.8Moz Gold-Equivalent across 23.1Mt at 1.1g/t AuEq (two gold-rich deposits)

  • 35Moz Silver-Equivalent across 11.3Mt at 99g/t AgEq (two silver-rich deposits)

A potential Stage 2 Study will assess the inclusion of this larger resource base, with the company also planning further exploration and drilling to unlock additional value.

LGM share price jumped 13.7% to 29 cents per share at the time of drafting on 11 April 2025.