Nova Minerals Ltd (ASX:NVA, OTCQB:NVAAF) is weighing up its options for the Estelle Gold Project in Alaska, considering two very different paths to gold production for the asset as resource definition drilling continues alongside a pre-feasibility study.
Having already defined a 9.9-million-ounce gold resource across four deposits, the project offers high levels of flexibility in terms of development strategies.
Aside from the large gold resource, Nova has also identified critical mineral prospectivity in the form of antimony (among other elements) at Estelle, a potential revenue stream the company intends to investigate with the aid of US critical mineral grants.
Pathways to production
NVA is considering establishing an initial low-capex, small-scale operation at the high-grade RPM deposit to self-fund development as the first option for Estelle’s development.
This pathway would require less infrastructure and generate early cash flow with high margins but would likely result in a longer timeframe to ramp up to full production levels.
The other option is to collaborate with strategic partners to rapidly develop a larger mining operation, having already received interest from large gold companies.
This method would offer increased gold production, cash flow and mine life on a shorter overall schedule while delaying initial cash flow and requiring investment from external stakeholders.
The two development pathways are not mutually exclusive and Nova may settle on a combination of funding and expansion options.
Becoming a tier-1 gold producer
“In less than five years we have taken the project from greenfields to 9.9 million ounces of gold with a PFS now in progress,” Nova CEO Christopher Gerteisen said.
“We have focused defining high-confidence resources for conversion to reserves at two deposits, RPM and Korbel, from the over 20 prospects across the Estelle Gold Project on our path towards production.
“Now in the PFS stage, the asset is progressing towards development with our strategy reflecting the flexibility of the project to current market conditions and our commitment to balance sheet management, with a low-capex, expected high margin, scalable start-up operation with self-funded expansion and/or a strategic partner to advance the full-scale production scenario to ultimately realise our goal of becoming a tier1 gold producer with the Estelle Gold Project.
“This strategy provides a defined path to production designed to provide free cash flow, while potentially allowing us to continue to unlock the district organically and to deliver on our prior track record of resource growth, new discoveries, at a low cost per discovery ounce.”
Advancing PFS and mineral estimates
Nova is currently drilling at the RPM deposit with its own drill rig, targeting another mineral resource update.
The company is also undertaking a LIDAR survey over Estelle to obtain a 3D model that will inform detailed infrastructure design, mineral reserve classification, and exploration activities moving forward.
As for the PFS, the company is advancing heap leach metallurgical test work with METS Engineering, which will include an option for low-cost gold recovery for processing lower-grade ores – Nova believes this option has potential to substantially reduce capex and increase the value of its gold production efforts.
Nova is also planning a 200,000-tonne bulk pit pilot test program and investigating ore sorting methods using Steinart multiple sensor technologies, with the intention of improving on previous strong results from XRT density sorting.
“Ore sorting results to date have shown the potential to significantly improve resource extraction, providing processing optionality, which is expected to reduce overall processing costs, increase total gold production and increase the life of mine,” the company stated.