RE: News4 Feb 2026 09:03
1. Gross In-Situ Value
Using the conservative estimate of 1,000 g/t Ag (the grade often exceeds this) and 16,000 tonnes of material:
Total Contained Silver: ~514,400 ounces.
Current Silver Price: ~$66 USD / $100 AUD per ounce.
Gross Value: ~$51.4 Million AUD.
2. Estimated Costs (The "Deductions")
Because the material is already sitting on the surface and requires only gravity separation, the costs are significantly lower than a standard mining operation.
Processing Costs: Estimated at $30–$50 AUD per tonne (due to the lack of grinding required). For 16,000t, this is ~$800,000.
Transport & Handling: Loading and moving the tailings to a nearby facility (like Radio Hill) is estimated at $15–$25 AUD per tonne (~$400,000).
Recovery Loss: No process is 100% efficient. Assuming a 75% recovery rate for gravity separation (common for these tailings), the "realised" silver is ~385,800 ounces.
Royalties: Western Australia state royalties for silver are 2.5% of the net value.
3. Net Value Projection (Post-Extraction)
After accounting for recovery losses and operational expenses, the estimated net value of the tailings pile is as follows:
Item Estimated Value (AUD)
Realised Silver (75% Recovery) 385,800 oz
Market Value (@ $100/oz) $38,580,000
Less: Processing & Transport - ($1,200,000)
Less: Royalties (2.5%) - ($964,500)
Estimated Net Project Value ~$36.4 Million AUD
Critical Considerations
The "Bonus" Metals: This valuation excludes the value of copper, nickel, and gold present in the tailings. If these are recovered alongside the silver, the net value could increase by 5–10%.
Profit Split: Under the current Joint Venture, West Coast Silver (70%) would take ~$25.5M, while Alien Metals (30% free-carried) would take ~$10.9M.
Scale: While $36M is a high-margin return, the real value for the operators is using this "easy cash" to fund the exploration of the Elizabeth Hill underground extensions, which they believe contain much larger high-grade silver lodes.
Note: The "Free-Carried" status of Alien Metals is significant; they do not pay for the extraction costs, meaning their $10.9M share is almost entirely pure profit.
Sign In
Follow the stocks
