Hycroft sees budding opportunity
Hycroft Mining sees budding opportunity at its Hycroft gold deposit in Nevada, USA through exploration around the mine and near the Rosebud mine to the southeast, chief executive Diane Garrett told Mining Journal at the 2023 Precious Metals Summit in Beaver Creek, Colorado, USA.
Garrett said former operators of Hycroft focused on mining rather than exploration, and the ground between Hycroft and Rosebud, which produced 400,000oz grading 14gpt between 1997 and 2000, has never been drilled.
"There has been very little exploration done in the last 20 years around the resource. We had a significant discovery at a very high grade at Romarco Minerals [where Garrett was chief executive] after bigger companies had previously drilled it. We are applying those principles at Hycroft. Every owner kept mining the pit, and no one stepped back to look for what was feeding a 20Moz system," said Garrett.
Hycroft hosts some 10Moz of gold in measured and indicated sulphide resources and 400Moz silver. Metallurgical testwork has also shown possible recoveries of 89% for gold and 94% for silver. "The sulphide ore can be conventionally processed, and we assumed recoveries of 80%. We have put 18 months of work into this as this is the biggest single factor to derisk the mine. We are now doing benchtop autoclave work," said Garrett.
Hycroft is also drilling to improve the resource grade, convert waste material into ore, reduce the strip ratio, and move inferred resources into measured and indicated resources for a prefeasibility study in the June quarter of 2024, and improve economics.
While peers are looking at staged project developments to reduce the initial capital requirement with expansions to be funded from cash flow, Garrett said that a low-grade project like Hycroft needs scale to drive project economics.
"The best mine plan and economic value dictates the throughput capacity. We have a homogeneous deposit with no high-grade starter pit, so we are looking at a 60,000tpd operation. We are a low-grade deposit so we don't have the flexibility to start on a smaller scale. We have no opportunity to find a mine within the mine," said Garrett.
Strategy
Hycroft has US$117 million in cash and $140 million of debt, which is not due until 2027. The company would look to convert some of that debt into equity. With the restart of Hycroft still several years out, the company is also looking at the possibility of undertaking a strategic transaction to provide it with revenue generation in the near term.
"We have an enviable cash position and can raise additional money. We have been active in the M&A space in the past, and we are looking at producers for opportunities to marry their production and our balance sheet to create a platform ready for growth," said Garrett.
The company is looking for assets in Canada or the US at 24 months or less to production, with a production profile of not less than 50,000ozpa. "We would love to do a transaction within the next 18 months," said Garrett.
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