Aura Minerals (TSX: ORA) has completed a preliminary economic assessment for the Guatemala-based Era Dorado project. The project, acquired by Aura in January as part of their purchase of Bluestone Resources, is said to have an after-tax net present value of US$485 million and an IRR of 24%.
That figure is based on an underground gold operation that would have a mine life of 17 years, with total production over that period of 1.4 million ounces of gold. Average annual gold production is pegged at 91,000 ounces over the first four years of mine life.
Initial capital costs for the proposed mine are estimated at $264 million, with the project having an estimated payback period of 3.5 years. On a per unit basis, cash costs are estimated to average US$1,073.40 an ounce over the life of mine, while no estimate for all in sustaining costs was provided.
The study itself is based on a resource estimate that outlines indicated mineral resources of 1.9 million ounces of gold at an average grade of 9.31 g/t and 6.4 million ounces of silver at an average grade of 31.54 g/t. An additional 0.1 million ounces of gold at grades of 6.02 g/t and 0.4 million ounces of silver at a grade of 19.68 g/t are said to exist within the inferred resource category.
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The study itself is based on a gold price of $2,410 an ounce and a discount rate of 5%. The sensitivity table included within the release suggests that at $2,892 an ounce gold, the after tax net present value climbs to $800 million, while the IRR jumps to 34%.
“We are excited to announce the Preliminary Economic Assessment (PEA) for Era Dorada, a key addition to our portfolio of development projects acquired early this year. Following our approach with the development of Almas and Borborema projects, we are actively collaborating with local authorities and government agencies to ensure Era Dorada meets the highest environmental and social standards under our Aura 360 culture,” commented Rodrigo Barbosa, CEO of Aura, on the results.
Aura Minerals last traded at $33.93 on the TSX.
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