• Net Present Value of A$1,226 million (pre-tax) and A$839 million (post-tax)
• Internal Rate of Return of 37% (pre-tax) and 30% (post-tax)
• C1 cost of US$1.65/lb (net of by-product)

KGL Resources Limited (ASX:KGL) has announced the results of its Baseline Economic Model (BEM) for the Jervois Copper-Silver-Gold Project in the Northern Territory, confirming the attractive economics and providing the financial and technical basis for project financing and commencing development. The BEM incorporates updated market inputs and cost escalation, with contributions from independent industry specialists. Key highlights include a Net Present Value of A$1,226 million (pre-tax) and A$839 million (post-tax), an Internal Rate of Return of 37% (pre-tax) and 30% (post-tax), and C1 costs of US$1.65/lb (net of by-product). The project is expected to have a simple payback period of 3.1 years (post plant ramp up) and generate average steady state operating cashflow of A$260 million per annum. The BEM also outlines the project's social contribution, including peak employment of up to 550 people during operations and increased royalties of A$379 million. KGL has also enhanced the project's governance controls, including the establishment of a Project Steering Committee and the appointment of an additional non-executive director. The company is focused on progressing project financing and advancing toward a Final Investment Decision, with the current mine plan representing only part of the broader mineralised system and potential to extend the 10-year mine life.

Over the Life of Mine, the Jervois Project is expected to produce 276kt of contained copper, 10.5Moz of contained silver, and 87koz of contained gold (Copper Equivalent of 352kt). The construction capital cost estimate is A$439 million, with an additional A$290 million in mining and sustaining capital to be funded from cashflow during operations.

KGL is well positioned to benefit from strengthening long-term fundamentals for copper, silver, and gold as demand growth continues to outpace new supply development. The company is focused on progressing project financing and advancing toward a Final Investment Decision, with the potential to extend the current 10-year mine life and further enhance the long-term value of the Jervois Project.