Newcore Gold tanks as Enchi pre-feasibility disappoints

Newcore Gold (TSXV: NCAU) stock tanked on Wednesday after a pre-feasibility study (PFS) for its Enchi project in Ghana delivered underwhelming economics despite underlying gold prices being much higher since the previous technical report.

Under its base-case gold price of $3,800/oz., the PFS estimated an after-tax net present value (NPV) of $496 million (at 5% discount) and an internal rate of return (IRR) of 37%. This represents a significant drop-off from those presented in the preliminary economic assessment (PEA) from 2024, which pegged the NPV at $632 million and IRR at 92% under its upside case of $2,350/oz.

The initial cost has also tripled, now estimated at $351 million (versus $106 million previously), the PFS showed, while keeping the payback period the same at 1.6 years.

Shares of Newcore Gold plunged by nearly a quarter to an 18-month low of C$0.36 on the results, sending its market capitalization down to approximately C$114 million.

9-plus-year mine

In its press release Wednesday, Newcore CEO Luke Alexander said the Enchi PFS represents an “important milestone” for the company, noting that it is a culmination of drilling and technical work completed in 2024 and 2025 that continues to de-risk the project.

The PFS report uses a March 2026 resource update totalling more than 83.6 million indicated tonnes grading 0.56 gram per tonne (g/t) gold for 1.5 million contained ounces, plus over 40 million inferred tonnes grading 0.49 g/t for 626,000 contained ounces. Within this resource, covering four open-pit deposits, there are approximately 51.3 million tonnes of probable reserves grading 0.64 g/t gold, for over 1 million oz. of contained gold.

The reserve base, as outlined in the PFS, would support more than nine years of operation, with average annual production of 104,000 oz. — in line with the PEA estimates. The life-of-mine operating cost, however, has more than doubled to $1,689/oz., as did the all-in sustaining cost ($2,290/oz.).

While the PFS report also envisions as a conventional open-pit operation with standard milling and a carbon-in-leach (CIL) plant, the rate of processing is now set at 5.5 million tonnes per annum, down from 8.1 million previously.

Resource growth focus

The PFS, according to Newcore, would be used as the basis on which to apply for a mining lease this year.

“With a favorable and streamlined mine permitting process in Ghana, and a government that has shown strong support for project development, we will continue to drive development of Enchi toward production,” Alexander said.

He also said the company will focus on high-grade opportunities to further expand Enchi’s size, scale and long-term value. According to Newcore, all existing deposits and targets on the property remain open along strike and at depth, with potential for resource growth in both shallow oxide and transition material as well as within the deeper fresh mineralization.

Chairman Doug Forster also noted that the resource estimated used in the study excludes “significant discoveries” achieved by drilling in 2026 as part of its ongoing 80,000-metre program.

“With the PFS for Enchi now completed, we have an active year-ahead as drilling continues on the project with a focus on resource growth,” Newcore VP exploration Greg Smith added.