Amex Exploration (TSXV: AMX) has completed a preliminary economic assessment for its flagship Perron project, found in Quebec. The PEA outlines a net present value (5%) of $525 million, and an IRR of 40.2%, based on $2,000 per ounce gold on an after tax basis.
The estimate is based on a ten year mine life, which processes 1,750 tonnes per day. The mine is estimated to produce 101,000 ounces of gold on an annual basis, at an average grade of 5.26 g/t. The first five years of production meanwhile are estimated to produce an average of 124,000 ounces per year at an average grade of 6.49 g/t gold.
The current mining model calls for a mechanized underground operation which is “complimented” by open pit production across five pits.
All in sustaining costs for the life of mine are estimated at US$807 per ounce, which in the first five years is reduced to US$739 per ounce due to the higher production profile. Initial capital expenditures meanwhile are estimated at $229 million, while life of mine sustaining capex sits at $230 million.
“The Project represents a strong combination of high-margin production and modest capital requirements, with the opportunity for significant resource growth in the future,” commented Victor Cantore, CEO of AMEX Exploration.
While the project has an after-tax net present value of $525 million based on $2,000 an ounce gold, that figure rises to $914 million at current spot prices, while IRR jumps from 40.2% to 59.7%. The after tax payable period similarly rises from 1.8 years to 1.2 years at current spot prices.
AMEX also indicated that the PEA is based on the previously released mineral resource estimate, however 28,000 metres of drilling has occurred subsequent to the release of that estimate. Recent drilling is said to have demonstrated that the High Grade Zone is open not just at depth but in certain areas near to surface.
AMEX Exploration last traded at $1.20 on the TSX Venture.
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