Frederick Earnest: Absolutely, Heiko. The feasibility study that we completed for Mount Todd evaluated the Mount Todd project at a 17.5 million tonne per year rate, 50,000 tons per day. And all of the engineering and the designs associated with the feasibility study were targeted and undertaken with the idea of designing a project that would be very attractive to a senior gold producer. The capital expense of building that initial project while a large number for us at almost $900 million was actually a very capital efficient number, actually in the lowest quartile on a per ounce of gold produced over the life of the project basis compared to our peers. However, the fact remained that it was a very large number. And so with the feedback that we received from the process that was initiated by CIBC Capital Markets a year ago, we undertook an internal level scoping study to evaluate what a project that’s built at a smaller scale and more to, I think the best term would be fit for purpose design level might look like.
I and several members of the team visited some smaller scale Australian operations the middle of the year last year, and formulated some ideas about what the standards might look like and what a typical mid tier or smaller Australian company would use as a design criteria. We then brought in a new engineering firm who had not been extensively involved in the design of the feasibility study plant to redesign the process plant area using concepts that we gleaned from visiting other operations. This has allowed us to design an operation that smaller could be built more quickly and more efficiently. And as we indicated, at this smaller scale, the capital cost is estimated to be less than $350 million. Now in doing this work, we have not tried to estimate the economics for a life of mine project at 15,000 tonnes a day.
Simply stated that would have a mine life in excess of 40 years. But we carried the life out far enough to get a good idea of what the economics were. And we’ve been very careful so as to not condemn any part of the existing reserve. We’ve maintained the optionality specifically, and some of the work that’s ongoing at the present time is looking at a simple 50% expansion of the plant that we designed. We’ve also looked at, and are looking at and evaluating what a project would look like, use the principle of staged development by building the first 15,000 tonne per day train, and then adding another 15,000 tonne per day train and possibly a third to ultimately reach something very close to the 50,000 tonnes per day that we had originally proposed.
We’ve incorporated contract mining as a way to further reduce the initial capital expense. All of these things have been done to demonstrate to partners the optionality of developing Mount Todd. Mount Todd does not have to be developed at 50,000 tonnes per day. And while we’ve done an extensive amount of work at that scale, we’ve been able to leverage off of that feasibility study level design work in the evaluation of a smaller project. This smaller project concept has resonated with a number of companies. And there have been additional confidentiality agreements signed as we — in the period of time following the announcement of the completion of this study. It has also put the news out there and we’ve had interest from those who are not necessarily interested in a smaller scale project.
And so it’s been a way to once again draw serious and genuine interest to Mount Todd and to the development opportunities potential that exists there.
Heiko Ihle: That’s helpful. I appreciate it. I’ll get back in queue. That was very extensive answer, and I’m grateful. Well done getting all this ad hoc here. Thank you.
Frederick Earnest: Thank you, Heiko.
Operator: Thank you. . Your next question is from Adrian Day from Adrian Day Asset Management. Please ask your question.
