Paramount Gold and Silver Releases Updated PEA for San Miguel: "Comfortable Down to $1,000¿
Paramount's PEA uses a base case price of $1,350 per ounce for gold and $22 for silver, slightly above where those commodities have been hovering lately. However, with an all-in cash cost of $855 per recovered gold equivalent ounce, CEO Chris Crupi is confident the "project will fly" at current prices, and could even stand up against a slight drop.
US-based exploration and development company Paramount Gold and Silver (TSX:PZG) certainly keeps itself busy with its advanced-stage precious metals projects in Nevada and Northern Mexico. Last year in February, the company put out a preliminary economic assessment (PEA) for its San Miguel project, and today it released a new and improved version that brings its initial capital expenditures down significantly while increasing its measured, indicated and inferred resources. Located in the Sierra Madre belt in Mexico, the San Miguel project includes six deposits that will be mined through a combination of open-pit and underground operations, with production from those sites being fed to a central mill. In total, the measured and indicated resources for the project have increased roughly 79 percent from last year's PEA, rising to 17,550,000 tonnes. Inferred resources for the project also increased by 89 percent. Improved costs To be sure, the updated PEA represents a significant achievement for Paramount. As CEO Christopher Crupi told Gold Investing News (GIN), "we took our initial capital down from about $250 million to $69 million, which is a significant drop." That's important for the company in terms of navigating the current market and moving the project forward. "These monster mines that would cost many many hundreds of millions or billions are not happening," Crupi said. "The key in this marketplace now for investors is 'how fast and how low cost can you make it?' so you can start producing gold as fast as you can and at the same time take that profit and reinvest into expansion perhaps of the mine."