As part of the PFS, Gold Road declared a maiden ore reserve of 81.1 million tonnes at 1.22 grams per tonne for 3.17Moz gold, underpinning an initial 12-year life.

“It’s one of the largest maiden reserves ever published in Australia,” Gold Road executive chairman Ian Murray said this morning.

Estimated annual production would be 265,000 ounces of gold at all-in sustaining costs of $960 an ounce.

Capital costs of $A455 million, including $35 million contingency, were in line with previous estimates for a 7.5 million tonnes per annum, large-scale single open pit operation.

It equates to a 42-month payback period.

“That’s less than a third of the life of mine,” Murray pointed out.

Using a $1500 an ounce gold price, which Murray pointed out was roughly 10% below current prices, the project would generate more than $1 billion in undiscounted pre-tax free cashflow over its life.

Murray said taxes and royalties alone would be around $450 million.

Infrastructure will include an airstrip capable of taking a 100-seater jet, a 200-person temporary construction camp, which will later be replaced by a 300-person permanent village, and a gas-fired power plant.

A mining lease application has been lodged, but its grant is pending a native title agreement which is expected to be finalised in the June quarter.

The definitive feasibility study, led by GR Engineering, is already underway.

Given the $1500/oz gold price and US73c exchange rate used, Murray said there was potential upside as the company advanced the DFS.

“Now is the perfect time to be developing a project of this scale in Western Australia,” he said.

The DFS is set to be completed by the end of this year, followed by an investment decision and the start of the 24-month construction phase early next year.

On that timeline, first gold would be expected in the fourth quarter of 2018.

The company is already thinking funding.

“We’re looking at the traditional two thirds, one third [debt to equity split],” Murray said.

But pending the final DFS results, he believes it could be 60-70% debt and 30% equity and mezzanine financing.

“Definitely not streaming,” Murray said.

In the meantime, Gold Road is well-funded with $A36.9 million cash at the end of December.

“We’re cashed up and pre-funded to complete the feasibility study,” Murray said.

Shares in Gold Road rose to an intraday high of 42.5c but last traded at 41.2c, a 3% rise.