TSX-V-listed Mayfair Gold has completed a prefeasibility study (PFS) for the Fenn-Gib gold project, in the Timmins gold district of Ontario, Canada, saying the study outlines Mayfair’s strategy to reduce execution risk and prioritise high-margin material early in the mine plan, supported by a realistic and financeable initial capital outlay.

Mayfair says this approach enables rapid value generation from Fenn-Gib while preserving long-term flexibility to deploy free cash flow toward regional growth opportunities or advancing secondary assets to diversify and expand production.

Mayfair says it intends to prudently use project-level debt and other financing options to minimise overall cost of capital and maximise per-share economic returns.

Initial capital expenditure (capex) is estimated at $450-million, including a 26% contingency on direct costs.

Mayfair notes that the PFS considers a conventional openpit mining operation and incorporates modular processing plant designs, allowing for a simplified construction schedule of less than 24 months, reducing inflationary and execution risks.

The company says the project will proceed under the provincial class environmental assessment process and does not trigger a Comprehensive environmental assessment or federal impact assessment under current regulations.

Additionally, social and community engagement has focused primarily on the Apitipi Anicinapek Nation (AAN) owing to its proximity to the Fenn-Gib site.

The company and the AAN have an active exploration agreement in place and will continue to advance consultation collaboratively, with the intention of developing a community benefit agreement for the project.

Mayfair says it plans to advance three key strategies at the project in parallel – Ontario-led environmental approvals, Indigenous agreements and engineering-design procurement.

The company says these initiatives aim to enable major construction within 24 to 36 months, with commercial operations targeted within five years.

The company notes that the PFS assumes average gold production of 71 300 oz/y over the first six years of operation and a total life-of-mine (LOM) production of 920 000 oz over 14.3 years of operation.

Additionally, free cash flow (FCF) after working capital changes, is expected to amount to $896-million in the first six years of operation.

The company says using a spot gold price of $4 450/oz, the FCF for the first six years of operation is expected to be $1.43-billion.

The company notes that the mine plan and associated economics reflect total gold processing of 1.04-million ounces with 88.3% recovery. This represents only 24% of the September 3, 2024 indicated mineral resource estimate (MRE) of 4.3-million ounces.

The Fenn-Gib MRE is based on a design metal price of $1 750/oz gold and is about 25.1-million tonnes of ore with a gold grade of 1.29 g/t for a contained 1.04-million ounces of gold.

The main construction period, excluding early works is estimated at 18 to 24 months.

Mayfair says sustaining capital includes mining fleet additions and replacement, highway relocation and future tailings storage facility dam raises and associated construction.

The company explains that no provision has been made for potential plant expansion capital.

LOM unit operating costs are estimated at $59.43/t of ore processed.

Average LOM cash costs and all-in-sustaining costs (AISC) are estimated at $1 203/oz and $1 292/oz showing a margin to the base case gold price of $1 897/oz and $1 808/oz gold respectively and a margin on spot gold price of $3 246/oz and $3 159/oz gold.

The PFS outlines a production profile based on a high-grade openpit with a projected

operating mine life of 14.3 years, averaging 1.29 g/t gold and an anticipated metallurgical recovery averaging 88.3%.

During the first six years of operations, yearly gold production is expected to average 71 336 oz at a feed grade of 1.47 g/t, with peak output of over 82 000 oz in year two.

The mined reserves represent only 24% of the overall 4.3-million indicated mineral resource.

Mayfair points out that the study highlights an after-tax net present value (NPV) of $652-million and an internal rate of return (IRR) of 24% at $3 100/oz base case gold price and an after-tax NPV of $1.37-billion and an IRR of 38% at $4 450/oz spot gold price.

The study shows average grade processed of 1.47 g/t gold over the first six years of operations for average yearly gold production of 71 336 oz at an AISC of $1 171/oz.

The study also reveals an average grade processed of 1.29 g/t gold over the 14.3-year reserve life for average yearly gold production of 64 096 oz at an AISC of $1 292/oz.

Moreover, Mayfair notes free cash flow in the first six years of operation of over $896-million at base case gold price and $1.43-billion at spot gold price.

The company explains that the mine plan and associated economics only exploit 1.04-million ounces (24%) of the total 4.3-million ounces indicated resource, preserving optionality for future growth.

The company also notes that environmental baseline studies are well advanced to allow for start in early 2026 of environmental assessment and Ontario permitting process.

Mayfair says a final investment decision is expected within three years with commercial operation within five years.

The PFS lead author was Ausenco Engineering with contributions from Knight Piésold; AGP Mining Consultants; Ecometrix, an Egis Group Company; and T Maunula & Associates Consulting.

Mayfair CEO Nick Campbell says the PFS demonstrates the strong economics and free cash flow potential associated with developing the Fenn-Gib gold project as a targeted, high-grade operation that can be advanced through the Ontario permitting process.

He adds that this strategy allows Mayfair to advance Fenn-Gib without requiring excessive up-front capital with substantially lower execution risk as compared with a large-scale development.

“We believe the permitting process can be advanced quickly, positioning the project for timely development within the current gold cycle,” he says.

“At current gold prices, the project has exceptional value potential, with strong free cash flow and robust economics that further enhance its attractiveness to investors,” says Campbell.

Additionally, COO Drew Anwyll describes the PFS as a realistic representation of the estimated operating and capital costs, production profile and overall economics of the Fenn-Gib project.

“Our plan is straightforward: we intend to build this mine and bring it into operation in the near term.

“The team is focused on executing efficiently and delivering on our commitments - completing this project and sticking the landing. The next phase is clear: finalise engineering and design work, and advance environmental approvals in preparation for a construction decision within two to three years,” says Anwyll.