Guess what 'significant milestone' sent this ASX gold stock rocketing 41% today

This gold explorer has released a promising update.

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Metalstech Ltd (ASX: MTC) shares are having an excellent session.

In morning trade, the ASX gold stock jumped as much as 41% to 17 cents.

Its shares have faded since then but remain up 12.5% to 13.5 cents at the time of writing.

Why did this ASX gold stock rocket?

Investors were fighting to get hold of the company's shares this morning after it released the scoping study for the 100%-owned Sturec Gold Mine in central Slovakia.

According to the release, the study has delivered highly encouraging economics and technical viability, highlighting the Sturec Gold Mine's potential to become a low-cost gold and silver concentrate producer.

Management advised that the study confirms that the mine can support a base case scenario with an underground-only mining operation delivering gold and silver concentrate production of ~1.134M ounces of production over an initial mine life of 9 years at 2.3Mtpa plant production capacity.

The life of mine (LoM) operating cost is estimated to be US$927 per ounce, which delivers robust operating margins based on a forecast long-term gold price of US$1,850 per ounce.

This gives the project a pre-tax net present value (8% discount rate) of US$506 million (A$791 million) with an internal rate of return (IRR) of 116%.

Furthermore, if a conservative gold price of US$1,550 per ounce is assumed, it still has an after tax net present value of US$239 million (A$376 million).

This compares to the company's current market capitalisation of approximately $30 million.

'Significant milestone'

The ASX gold stock's director, Gino D'Anna, commented:

Completion of Sturec's updated Scoping Study marks a significant milestone achievement for the Company and brings with it the rebirth of one of Slovakia's historic mining operations, reinvigorating opportunity for the local communities within the region.

The Scoping Study has demonstrated potential for a robust mining operation at Sturec with a forecast AISC of US$927/oz AuEq and a capital payback of 2.3 years (post-tax) from first production. It has been completed to a very high quality with 78% of the mining inventory based on Measured and Indicated Resources, and only 22% in the Inferred category. Importantly, the production target demonstrates that only 40% of the current JORC (2012) Mineral Resource has been mined with the underpinning the substantial project and economic upside that exists alongside the significant JORC (2012) Exploration Target demonstrating further upside.

Metalstech will now move towards a pre-feasibility study for Sturec.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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