- The PEA considers an open pit mining operation using an operator owned mining fleet which feeds mineralized material to an adjacent flotation plant and cyanide leach facility with dry stack tailings disposal. A processing rate of 15,000 tonnes per day ("tpd") provides for an 11 year mine life while processing a total of 56.7 million tonnes of material from an open pit with a low overall stripping ratio of 1.2 to 1.
- Forecast life of mine ("LOM") production is 509,000 ounces gold and 55.5 million ounces silver, or 1.50 million ounces of gold equivalent, worth a total of about $2.10 billion, using the base case metal prices of $1,400 per ounce gold and $25 per ounce silver.
- The average annual LOM production is forecast to be 46,300 ounces of gold and 5.05 million ounces of silver, or 136,500 ounces of gold equivalent.
- Average annual production in the first three years of operation is forecast to be 64,000 ounces gold and 6.84 million ounces silver, or 186,200 ounces gold equivalent, or about 36% percent higher than the average LOM annual production, through mining of a shallow, higher-grade core of the deposit in the early years of the operation.
- Estimated cash operating costs are estimated to average $518 per ounce gold equivalent for the first three years of operation and $701 for the life of the mine, with LOM average annual pre-tax net operating income of $97.1 million and $1.07 billion LOM, using base case metal prices.
- Initial start-up capital costs including working capital and owner's costs are estimated to be $484 million, including a 25% contingency ( $81.6 million). Sustaining LOM capital costs are estimated at $20.5 million.
- Using base case metal prices the PEA indicates the Cieneguita project has a pre-tax Internal Rate of Return ("IRR") of 22.4%, a payback of 3.0 years and a Net Present Value at an 8% discount rate ("NPV8") of $248 million. The project is leveraged to higher metal prices with the pre-tax IRR rising to 32.6%, and the NPV8 increasing to $462 million using recent metals prices of $1,600 per ounce gold and $30 per ounce silver, while the payback decreases to 2.4 years.
Pan American Goldfields Ltd. Reports On Results Of A Preliminary Economic Assessment For The Cieneguita Gold-Silver Project, Mexico
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