Cavalier Resources (ASX:CVR) capitalises on rising gold prices at Leonora
September 5, 2024The relentless surge in gold prices has created a prime opportunity for Cavalier Resources’ Crawford Project, with the Leonora-based operation poised to capitalise on gold’s role as a stable asset amidst global economic uncertainties.
Auralia Mining Consulting’s updated analysis on Cavalier’s Crawford Stage 1 oxide-only pit reveals a striking financial boost.
Originally based on a conservative gold price of A$2,900/oz, the project’s Net Present Value (NPV) of A$15.7 million and Internal Rate of Return (IRR) of 130% were already impressive.
However, with gold prices now hovering near A$3,700/oz, these figures have skyrocketed to an NPV of A$32.8 million and a remarkable IRR of 289%
This shift illustrates the transformative power of rising commodity prices.
As Daniel Tuffin, Executive Technical Director and CEO of Cavalier Resources, notes, “Current high gold prices present a significant upside for the Stage 1 Crawford open pit.” This sentiment reflects the renewed optimism in the mining sector, as companies like Cavalier position themselves to maximise returns from a bullish gold market.
Key Highlights:
Gold Price Sensitivity: The project’s sensitivity to gold price fluctuations underscores its potential. A modest increase in the price of gold can translate into exponential financial returns, making this project particularly appealing in the current market.
Project Economics: Even at A$2,900/oz, the Stage 1 oxide pit is set to produce a pre-capex cash flow of A$24.6 million. At A$3,700/oz, this figure soars to A$43 million, cementing the project’s status as a low-risk, high-reward endeavour
Mining Approvals & Progress: The project’s regulatory pathway is also progressing smoothly, with all necessary environmental studies complete and mining approvals on track. Tuffin adds, “The company continues to advance the project towards the submission of mining approvals and looks forward to commencing operations for Stage 1 early in the coming new year”.
A Different Approach to Mining
Cavalier Resources has not only positioned itself well financially but also strategically. The company’s decision to focus on the highly recoverable, low-cost, oxidised portion of its resource for heap leach processing is a smart play, reducing operational complexity and costs.
With a projected all-in sustaining cost (AISC) of A$1,777/oz, Cavalier stands to benefit significantly from the widened margin between production costs and current market prices
Furthermore, by actively engaging with stakeholders, including traditional owners and environmental bodies, Cavalier is ensuring the sustainability and long-term viability of its operations.
The company’s commitment to responsible mining is likely to resonate well with investors looking for ethical investment opportunities.
Cavalier Resources’ Crawford Project highlights the critical role of timing and strategy in the resource sector, with soaring gold prices enhancing its investment appeal.
With approvals progressing and mining operations expected to commence soon, Cavalier Resources is well-positioned to capitalise on this golden opportunity.
While it’s clear that the company stands to benefit from current market conditions, the real test will come as it moves from planning to production—a journey that many in the sector will be watching closely.
Please note the following valuable information before using this website.
Independent Research
Market Open Australia is intended to be used only for educational and informative purposes, and any information on this website should not be taken as investment advice or guidance. It is important to conduct your own research before making any investment decisions, which should be based on your own investment needs and personal circumstances. Any investment decisions based on information contained on this website should be taken in line with independent financial advice from a qualified professional or should be independently researched and verified.
