On developmental projects. On Monday, we announced an updated mineral resource estimate, completion of the definitive feasibility study, and indicative project financing terms. Together with the placement announced this morning, WIA Gold is now fully funded through to production. The key message I would like you to take away today is that WIA Gold has successfully transitioned from an exploration and study company to a fully funded development company with significant growth opportunities. Please take note of the disclaimer. A copy of the presentation has been released to the ASX and is available on our website. Our DFS is underpinned by a 3.8 million ounce mineral resource, a maiden 2 million ounce ore reserve, providing a strong foundation for the project. Before I continue, please note that all financial figures presented today are in USD. The DFS delivers compelling financial outcomes.
The project has a post-tax NPV of $1.2 billion, with an internal rate of return of 41% and payback within two years. Average production is approximately 150,000 ounces per year for the first 10 years and a 14-year LOM. Together, the scale of the resource, the maiden reserve, and the robust project economics clearly demonstrates that Kokoseb can support a long life, profitable mining operation. Most importantly, Kokoseb is no longer simply an exploration success or a development concept. We now have a reserve backed, DFS-supported project that is fully funded through construction and into production. This represents a significant milestone in WIA Gold's evolution from explorer to developer and ultimately producer. This slide really tells the WIA Gold story. Kokoseb was only discovered in 2021. Since 2023, we have grown the mineral resource from 1.3 million ounces to 3.8 million ounces.
At the same time, we have delivered a maiden 2-million-ounce ore reserve and completed the definitive feasibility study. In a remarkably short period, we have progressed from discovery, to resource definition, to reserve conversion, and now a fully funded development project. Beyond Kokoseb itself, we remain very encouraged by the broader exploration potential across our tenement package, and we see significant opportunities to continue to grow both the resource base and the overall value of the project. We believe there is still substantial growth ahead. One of the most exciting developments in this resource update is the introduction of our maiden underground resource. Importantly, the DFS and its economics are based entirely on open pit mining. Despite that, we have already defined an underground resource of 560,000 ounces at 2.2 grams per ton.
This means that the DFS post-tax NPV of $1.2 billion is just a starting point, as it does not include any contribution from underground mining. We are actively drilling below the planned open pit and continue to see encouraging opportunities to expand and further define this higher grade mineralization. As we continue this work, we believe there is potential to add additional ounces, extend mine life, and further enhance the economics of the project. One of the key strengths of Kokoseb is its simplicity. This is a conventional open pit contract mining operation based on proving mining methods and equipment. By prioritizing the high-value ore early in the mine life, the project delivers strong early cash flow and achieves payback in less than two years. The result is a robust financeable and highly executable development project. The same simple approach applies to processing.
Kokoseb is a free milling ore body with test work demonstrating recoveries of more than 90% using conventional gravity leach and CIP processing. The flow sheet is based on proven industry-standard technology, and it does not rely on complex or untested methods. The result is a simple low-risk operation that is well-positioned for successful development and production. The project delivers strong returns using a long-term consensus gold price of $3,600 per ounce. Importantly, these economics are based only on the open pit. They do not include the maiden underground resource or significant exploration upside across our broader land package. As a result, we believe the DFS captures only part of Kokoseb's long-term potential. At the average July spot gold price, the post-tax NPV increases from $1.2 billion to $1.6 billion, whilst the IRR increases to 49%. This represents 1/3 more value before considering any contribution from underground mining or future discoveries.
This is an important slide because it highlights how we have planned for growth from the onset. The initial capital requirement of $475 million is competitive, and it includes $50 million of strategic investment in power and water infrastructure to allow future expansion. In other words, we are not simply building a mine, we are building a platform for long-term growth. The DFS delivers a competitive cost profile with life of mine C1 cost of $1,519 an ounce and all-in sustaining cost of $1,696 an ounce. At current gold prices, this translates into substantial margins and strong cash flow generation across the life of the operation. These margins are a key driver for the project's $1.2 billion post-tax NPV and rapid payback period. The production profile highlights the strength and consistency of the operation.
We expect to produce approximately 150,000 ounces per year on average during the first 10 years, generating substantial free cash flow. This long life, steady production profile supports project financing, underpins future growth, and creates a strong foundation for long-term shareholder value. The DFS is based on a conservative long-term gold price of $3,600 per ounce, providing a strong and robust base case. Importantly, Kokoseb offers significant leverage to higher gold prices. At $4,500 per ounce, the post-tax NPV increases to approximately $1.9 billion, or AUD 2.7 billion. This gives investors exposure to both a highly attractive base case project and substantial upside in a strong gold price environment. In my view, this is one of the most important slides of the presentation. Our goal was to deliver a DFS with a clear pathway to financing, construction, and production.
Following a competitive financing process and initial due diligence and technical review, we agreed indicative non-binding terms with Sprott for a $360 million debt facility and a $15 million equity commitment. Importantly, this is about more than funding. It is a strong endorsement of Kokoseb by one of the world's leading mining financiers. After conducting its own due diligence, Sprott has demonstrated confidence in both the quality of the project and its long-term value potential. Together with today's placement, we now have a clear path to development. This morning we announced a AUD 125 million placement that was completed at no discount to the last closing share price and was strongly supported by high-quality new and existing investors. Combined with the proposed financing package and our existing cash reserves, we now have a clear and fully funded pathway to first gold production.
This is a major milestone for WIA Gold, allowing us to focus on delivering Kokoseb into production. The placement is conditional on shareholder approval, which we will expect to seek at a general meeting in late September or early October. The transition into development has already commenced. We are building the owner's team, advancing engineering and procurement planning, and preparing for construction. The focus is now on disciplined execution and delivering Kokoseb into production by the end of 2028. At the same time, we remain focused on unlocking growth opportunities that exist beyond the current DFS. This slide highlights why we believe Kokoseb's best years still lie ahead. We see three clear growth opportunities: plant expansion, underground development, and regional exploration. The DFS already laid the groundwork for future expansion through strategic infrastructure planning.
With the underground resource excluded from the current mine plan and significant exploration upside still to be tested, we believe the DFS captures only part of Kokoseb's long-term potential. The DFS is not the end of the growth story. It is a platform from which the next phase of value creation will be built. The next 6- 12 months will be a transformational period for WIA Gold. Our focus is on advancing execution readiness activities and progressing expansion studies, securing key permits and approvals, commencing construction, and continue to grow the project through underground and regional exploration. Each of these milestones bring Kokoseb closer to first gold production, while creating additional opportunities for future growth. To conclude, I believe the investment case for WIA Gold is stronger than ever. We have defined a world-class gold project, demonstrated its economic viability, established a pathway to funding, and commenced the transition to development.
WIA Gold has evolved from explorer to developer. Kokoseb is no longer simply a discovery, it is becoming a mine. While delivering first gold is our immediate priority, we believe substantial growth opportunities still lie ahead. The DFS is not the finish line. It is the starting point for the next phase of growth and value creation. Thank you for your attention, and I look forward to your questions.
Thank you. During the presentation, we've had a couple of questions pop through. The first one is, how much did the DFS cost WIA Gold, and how long did it take to deliver?
Yeah. So it's taken us approximately 18 months from actually start of studies to delivery of the DFS. All up, the study work stream from start to finish costed us approximately $8 million. And the DFS formed $3.8 million of the total.
Thank you. The next one is, what are the critical path items between now and first gold pour?
Well, I think the very first item for us is the project permitting. It's very important for us to secure the necessary permits and approvals, which ultimately then allows us site access and commencement of construction activities. Further to that, there are obviously the usual long lead items. More importantly, perhaps the procurement of the design information pertaining long lead items. And then just the general sequence of project execution.
T hat is all the questions that we have today. I will pass back to you for any closing comments before we wrap up.
Yeah. Thank you very much for your attention. We are certainly very excited about this development opportunity and delivering Kokoseb into production by the end of 2028. We look forward to your continued support through this journey. Thank you very much again for attending today.