The Los Ricos South project was launched in March 2019. Credit: GoGold Resources
GoGold Resources (TSX: GGD) has released the results of its feasibility study (FS) at the Los Ricos South (LRS) project in Jalisco, Mexico, showing an after-tax net present value (using a discount rate of 5%) of $355 million with a 28% internal rate of return in the base case scenario.
At assumed spot metals prices ($30/oz. for silver, $2,608/oz. for gold), the NPV rises to $469 million with an IRR of 34%. The payback period would also be reduced from 2.6 years to 2.
The FS includes a re-engineered 2,000-tonne-per-day underground mine plan compared to the preliminary economic assessment (PEA) from September 2023. The process plant design by Ausenco contains front-end engineering that is said to have exceeded the normal feasibility study level of detail, which the company believes would “allow for a quicker transition to the detailed engineering and field execution phases in the future.”
The project plan at LRS is primarily underground, with a 12-year underground mine life engineered, followed by an open pit mine that begins in the 10th year.
“This FS has a very high level of detail, exceeding the normal feasibility study level of detail in the process plant design. Our expectation is that we will receive a positive outcome on our permit application for our underground mine by the end of March 2025,” stated GoGold’s CEO Brad Langille in a press release.
With this detailed study and once we have obtained the permit, we should be able to formally make a construction decision and begin building the mine,” he added.
Initial capital cost of the mine is estimated at $227 million, including $21 million in contingency, over an expected two-year build. Sustaining capital costs are calculated at $100 million over the life of mine.
Looking beyond the imminent construction, GoGold also sees opportunities for more near-mine exploration with a focus on growing more high-grade underground resources at LRS. It will also look to advance the Los Ricos North (LRN) project located 25 km apart. LRN represents the other part of its 240-sq.-km property in Mexico, and is subject to a May 2023 PEA that showed an NPV of $413 million.
The FS also incorporates an updated mineral resource estimate, totalling 11 million tonnes grading 162 g/t silver, 1.56 g/t gold and 0.12% copper in the measured and indicated category, plus 2.2 million tonnes at 106 g/t silver, 1.11 g/t gold and 0.27% copper inferred. Over half of the contained metals are from out-of-pit resources.
Some resources have been converted into proven and probable reserves, now estimated at 10.2 million tonnes grading 145.4 g/t silver, 1.39 g/t gold and 0.10% copper. This is expected to support total production of 80 million silver-equivalent oz. (41 million oz. of silver, 424,000 oz. of gold and 11 million lb. of copper) over a 15-year mine life, including average annual production of 7.3 million oz. AgEq in the first five years.
Shares of GoGold Resources edged 1.5% higher at C$1.39 apiece by 11:15 a.m. ET Friday following the FS release. This gives the company a market capitalization of C$469.6 million ($325.6m).
Source: MINING.COM – Read More
