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Omai Gold targets Wenot deposit in Guyana for quicker turnaround, CEO says

Omai Gold Mines (TSXV: OMG; US-OTC: OMGGF) says the Wenot project in Guyana could generate more cash in the first four years than its $375 million construction cost.

Annual after-tax free cash flow is forecast at $112 million or around $1 billion over the 13-year life of the proposed open-pit mine at the past-producing site in the South American country, according to a preliminary economic assessment released on Friday. It outlined annual output of 142,000 oz. of gold at an all-in sustaining cost of $1,009 per ounce.

“It converts our successful exploration programs into a baseline production scenario that shows potential for robust economic development for Omai to once again become a large-scale gold producer,” Omai president and CEO Elaine Ellingham said in a release. “We have fast-tracked the advancement of this project.”

The study omits for now the development of the nearby Gilt Creek deposit because it would have required more time and engineering costs to determine a new underground operation, the CEO said. Including Gilt Creek could potentially expand the site into a more than 20-year mine life. Developing two near-surface zones could boost the grade of ore for the first few years and improve economics, she said.

Wenot has an after-tax net present value (NPV) of $556 million at a 5% discount rate with a 19.8% internal rate of return IRR based on $1,950 per oz. gold price, according to the study. The deposit has an average head grade of 1.51 grams gold per tonne.

Resource update

The deposit holds 17.6 million indicated tonnes grading 1.48 grams gold per tonne for 834,000 oz. contained metal, according to a resource update issued in February. Wenot has 25.2 million inferred tonnes at 1.99 grams for 1.6 million oz. gold.

Gilt hosts 11.1 million indicated tonnes grading 3.22 grams for 1.2 million oz. contained metal, according to the update. It has 6.2 million inferred tonnes at 3.35 grams for 665,000 oz. gold.

Cambior, now part of Iamgold (TSX IMG; NYSE: IAG), mined 3.7 million oz. of gold from the Fennell and Wenot open pits at the site from 1992 to 2005. Omai acquired it in 2019.

Shares in Omai Gold Mines dropped 12% to C14¢ apiece at mid-Friday, as wider markets fell, after hitting a three-year high of C18¢ this week. The stock has traded as low as C3.5¢ over the past 52 weeks. The company’s market capitalization is C$57.4 million ($42.2m).

Source: MINING.COM – Read More