Depends whom you ask, regarding Galore being economical. Most mine suppliers and mining engineers I talk to in BC say it's a matter of "when", not "if" Galore goes ahead - but take that with a grain of salt of course. The metal prices change the profitability really fast, as per below. It will be very interesting to see where Schaft Creek stacks up once our FS is released - I think we'll have them beat on cash costs.
http://www.novagold.com/section.asp?pageid=22239
The Pre-Feasibility Study¹ (PFS or PFS Plan) confirms the technical and economic viability of the Project and shows a significant increase in scale and redesign of the Project from previous configurations. The PFS Plan provides for a mining and operating facility with a nominal 95,000 tonne-per-day capacity. Proven and probable mineral reserves total 528 million tonnes grading 0.6% copper, 0.32 grams per tonne gold and 6.02 grams per tonne silver. The Project is forecast to produce 6.2 billion pounds of copper, 4.0 million ounces of gold and 65.8 million ounces of silver over an approximate 18-year mine life with cash costs averaging $0.80 per pound of copper at Base Price Case assumptions and $0.42 per pound of copper at Recent Price Case assumptions.¹
PROJECT ECONOMICS
Parameter
|
Units
|
Base
Price Case²
|
Recent
Price Case³
|
|
Pre-tax NPV (7%)
|
$ millions
|
837
|
4,707
|
|
After-tax NPV (7%)
|
$ millions
|
137
|
2,753
|
|
Cumulative (undiscounted)
after-tax cash flow
|
$ millions
|
5,118
|
11,488
|
|
Internal rate of return
|
%
|
7.4
|
14.0
|
|
After-tax payback
|
Years
|
7.8
|
3.4
|
|
Average annual first five years
after-tax cash flow
|
$ millions
|
740
|
1,267
|
Notes to Project Economics Table
² Base Price Case metal prices are US$2.65/lb Cu, US$1,100/oz Au and US$18.50 Ag and foreign exchange rate of 1.11 CAD/USD.
³ Recent Price Case metal prices are closing prices on July 27, 2011 of US$4.44/lb Cu, US$1,613/oz Au and US$40.34/oz Ag and foreign exchange rate of 0.949 CAD/USD.
