Mutiny up on positive Deflector study

UPDATE 1pm: Shares in Mutiny Gold were higher after the company announced encouraging results from a feasibility study into the mining of the Deflector deposit within its Gullewa gold project 160km east of Geraldton.

Mutiny said the study had confirmed Deflector was a low cost, premium gold copper project with an initial seven-year minelife comprising of a two-year open pit operation followed by five years underground.

The study envisages production to start at 480,000 tonnes per annum in the open pit followed by 360,000 tonnes per annum in the underground mining operation resulting in total metal production of 382,000 ounces of gold equivalent.

The average cash operating costs over the life of the mine was estimated at $617 per ounce of gold equivalent.

The study estimated costs of $66 million for plant construction and $21 million for mine construction.

Net operating cash flow after debt (project finance) and taxes was estimated at $171 million.

"In financial terms, the feasibility shows Deflector to be a highly profitable, low cost, high gold grade project with significant gold recoveries, robust mine inventory and a vast scope to increase resources, profit and mine life," Mutiny said in a statement.

Managing director John Greeve said the company was also working on an updated resource model which would lift the existing resource inventory of 2.5 million ounces of gold and 40,000-80,000 tonnes of copper.

"Mutiny expects that the revised feasibility study, incorporating recent drilling results, will lift mining production with only marginal additional financial capital costs," he said.

Mutiny shares were up 0.4 cents, or 5.63 per cent, to 7.5 cents at 1pm.