Stormlands confirms early value estimate of Illinois Creek project at $448m using spot prices
Analytics platform Stormlands Mining finds in its latest case study that the net present value (NPV) of the Illinois Creek gold project, in Alaska, can increase from $226-million to $448-million using current commodity prices for economic modelling.
Using project owner Alaska Silver's available technical data, Stormlands rebuilt a base case financial model for the project that finds an internal rate of return (IRR) of 36.8% and a payback period of two years and seven months using conservative gold pricing.
The model also finds potential life-of-mine (LoM) revenue of $1.15-billion and earnings of $805-million over a 10.2-year mine life, for a capital requirement of $150-million - also under the base case assumptions.
The analytics company then updated the model using the average March gold price of $4 877/oz, while keeping all other core assumptions, and found that the NPV increases to $448-million, or by 98% compared with the base case scenario. The IRR increases to 61.4% and the payback reduces to one year and seven months.
This represents an uplift of about $648-million, or 140%, compared with the base case scenario.
In the current commodity price scenario, LoM revenue increases to $1.69-billion, while earnings increase to $1.32-billion.
The Stormlands model shows Illinois Creek as a gold-led project, with silver providing a meaningful secondary contribution.
Stormlands Mining CEO Róisín O’Connell highlights the importance of structured mining data, commenting that the Illinois Creek mineral resource estimate provides a strong technical foundation and a project-level economic model. Illinois Creek has not yet progressed to have a feasibility, prefeasibility or preliminary economic assessment (PEA).
"The case study demonstrates how a technical report with no published economic analysis can be converted into a scenario-driven valuation model. It allows users to ask practical economic questions before a formal PEA is available in order to understand the value drivers that influence the project economics," O'Connell says.
