PNX Metals Ltd has appointed GR Engineering Services Ltd (GRES) as study manager for the Hayes Creek project definitive feasibility study (DFS). GRES will be responsible for the process design and engineering aspects of the project, including all of the facilities, equipment and capital works required for the construction, commissioning and ramp-up of the process plant and associated infrastructure at the Project. Key activities will include:

• Assessing the technical aspects of the project, with a focus on optimising process design and achieving efficiencies in capital and operating costs within the scope of the project
• Evaluating strategic options and considerations available to the project to define a robust business case which balances the risk profile and the development cost
• Developing a project execution plan which will include identification of and planning for early works and pre-commitment activities.

The appointment of GRES is another important milestone in the development of Hayes Creek and a key part of completing the DFS. The DFS is expected to build on the excellent outcomes achieved in the PFS).

PNX Managing Director James Fox said “We are pleased to have engaged GR Engineering as an integral part of the Hayes Creek project development team, this appointment is another important milestone in the future development of the Hayes Creek zinc-gold-silver project. GRES is a well-respected group with a proven track record of delivering project studies many of which lead to project development. The DFS will build on the excellent outcomes achieved in the PFS, released in July 2017.”

A PFS1 on the project confirmed it to be a promising future low-cost, high-margin zinc and precious metals mine that could create significant value. The PFS was based on the development of the high-grade Iron Blow and Mt Bonnie zinc-gold-silver VMS deposits which are located less than 3 km apart on wholly owned Mineral Leases within the Pine Creek region of the Northern Territory, 170 km south of Darwin.

The PFS forecasts the project to generate an NPV10 of A$133 million, based on net smelter revenue from the sale of zinc and precious metals concentrates of A$628 million over a 6.5 year mine life through annual production of 18,200 t zinc, 14,700 oz gold, and 1.4 Moz silver (39,100 t of zinc equivalent). With a low A$58 million initial capital expenditure requirement, the project is forecast to have a 73% IRR, and very short pay-back period of 15 months.

The project is located in a favourable mining jurisdiction where the development scenario considers and utilises existing infrastructure that includes rail, road, high voltage power lines and water, further enhancing Project fundamentals and lowering development risks.

It is envisaged that the project can be ready for development in 2020 and will directly employ 130 personnel.