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This Gold Project Got Way More Expensive | Newcore Gold PFS

The Deep Dive Jul 9, 2026

Summary

Newcore's Enchi gold PFS swapped cheap heap leach for carbon-in-leach, tripling initial capital to $351 million from $106 million.

AISC (All-In Sustaining Cost — what it really costs to produce an ounce) roughly doubled to $2,290 while average annual output fell to 104,000 ounces.

CEO Luke Alexander argues 90.5% recoveries and deeper, harder ore justify the cost; investors were sold a $1,018-per-ounce heap-leach plan.

The shares fell 24% the day after the study was released, and management conceded it should have flagged the higher cost earlier.

An 80,000-meter drill program is running and management says Enchi is headed toward production, but gave no timeline.

Key points on Newcore Gold

  • The host argues the new Enchi prefeasibility study is effectively a resetting of the company: Newcore abandoned the 2024 PEA's cheap heap-leach plan for a far costlier carbon-in-leach operation, and shareholders were sold a case the study did not deliver — the stock fell 24% in the session after the release, from 48.5 cents to 37 cents, and later sank as low as 30 cents.
  • Initial capital jumps to $351 million from the $106 million in the 2024 PEA, including $114 million for the treatment plant, $39 million in engineering and $38 million in contingencies; sustaining capital rises to $135 million from $92 million.
  • Cash costs more than double from $934 to $2,149 an ounce and all-in sustaining costs rise from $1,018 to $2,290 an ounce, with royalties explaining only part of the increase, while average output falls to about 104,000 ounces a year over a 9.3-year life (front-loaded at just under 129,000 ounces) from the PEA's 122,000 ounces a year, despite recoveries improving to 90.5% from 82%.
  • At $3,800 an ounce gold the study shows an after-tax NPV of $496 million, a 37% IRR, a 1.6-year payback and $685 million of life-of-mine cash flow, improving to a $582 million NPV and 42% IRR at $4,000 — but the host notes the 2024 PEA was built on a far lower gold price and still showed a $371 million NPV and 58% IRR.
  • CEO Luke Alexander defends the switch as the best technical path after work since 2024, citing much higher recoveries, carbon-in-leach as the standard in West Africa and deeper ore that suits milling, while conceding the company should have communicated better; an 80,000-metre drill program is underway with early success, but no path or hard timeline to production was given.

Steve Hyland's takeaways

  • Top takeaway The host argues the negative reaction is justified rather than overdone, framing the study as a resetting of the company that management failed to communicate, and says investors were sold a 2024 heap-leach case the PFS did not deliver.
  • His central test is whether the higher recoveries justify an initial build more than three times larger and roughly double the cost per ounce when total gold output is lower both annually and cumulatively.
  • He dismisses the CEO's rebuttal as aimed at the wrong audience, noting that industry peers and technical groups praising the study are not the ones who funded the exploration.
  • He reads the share price as the final arbiter and says the market is simply not buying the strategy change Newcore is selling, treating the fall from 48.5 cents to 37 cents and on to about 30 cents as confirmation.
  • His conclusion is conditional rather than terminal: Newcore is not giving up on Enchi and appears to have early drilling success, but he questions why fix what is not broken if the heap-leach economics looked better, and notes no next steps or timelines were provided.