Cabral Gold Projects $49.3 Million NPV as Cuiú Cuiú Gold Mine Nears Production
Cabral Gold Inc. (TSXV: CBR) has released the Prefeasibility Study (PFS) for its gold-in-oxide starter project at the Cuiú Cuiú gold district in Brazil. The study affirms a strong financial outlook for the project with an after-tax net present value (NPV) of US$25.2 million and after-tax Internal Rate of Return (IRR) of 47.3% under base case assumptions.
The Cuiú Cuiú project offers a low capital entry point with potential for significant early returns, further cementing Cabral’s prospects in Brazil’s prolific Tapajós region.
The PFS outlines an initial 720,000-tonne-per-year open-pit operation focused on oxidized gold mineralization, which will be processed using heap-leach methods. With the base case scenario assuming a gold price of US$2,250 per ounce, the after-tax NPV sits at US$25.2 million. In the current gold market, where spot prices hover around US$2,710 per ounce, the project’s IRR rises to 82.6%, and the NPV swells to US$49.3 million.
The Cuiú Cuiú operation has a projected mine life of 4.5 years, with a notable payback period of just 18 months. According to Cabral Gold, “the starter pit, planned for the first seven months, will extract shallow, high-grade ore with an excellent strip ratio.”
During the first two years, the company anticipates producing approximately 19,700 ounces of gold annually, with all-in sustaining costs (AISC) of US$1,003 per ounce.
Beyond the initial oxide production, Cabral sees substantial opportunities for further growth. Recent drilling at nearby targets, including the Machichie and Machichie NE zones, has returned results that suggest a high potential for resource expansion. A recent discovery at Machichie NE showed 11 meters at 33 grams per tonne of gold, highlighting the district’s potential.
“The PFS confirms an economically attractive starter heap-leach and open-pit mining operation targeting the weathered gold-in-oxide mineralization at Cuiú Cuiú and outlines a pathway for funding the evaluation and drill testing of numerous targets within the Cuiú Cuiú district,” said CEO Alan Carter.
Cabral plans to initiate detailed engineering work immediately, with the goal of securing financing and making an investment decision by Q2 2025. First gold production is targeted for mid-2026, marking a crucial step for the company in establishing a foothold in one of the world’s largest undeveloped gold provinces.
The development capital expenditure required for the project is estimated at US$37.4 million. This figure includes a 10% allowance on quantities and a 20% contingency. As Carter emphasized, the goal is to create an initial operating platform that will generate cash to fund further exploration and expansion of the resource base.
Cuiú Cuiú project
The Cuiú Cuiú project is located in Para State, Brazil, a region that saw a significant gold rush during the 1980s. The area produced significant quantities of placer gold, but it wasn’t until recently that the full extent of its mineral wealth became evident. Cabral holds a 100% interest in the Cuiú Cuiú district, which is situated next to G Mining’s (TSX: GMIN) Tocantinzinho mine, a major gold operation in the region.
In 2021, Cabral conducted internal studies that revealed the potential for an initial low-cost, short-term gold operation focused on the weathered oxide layers that overlie the district’s primary gold deposits. These oxide blankets formed through the natural weathering of higher-grade primary deposits, which remain largely untapped.
As of late 2022, the Cuiú Cuiú project had an estimated 604,000 ounces of indicated gold resources and 534,500 ounces of inferred gold resources, as calculated by SLR Consulting. The resources are spread across five main deposits, with MG and Central being the most prominent. Additional resources are expected to be added in future updates following more drilling.
The project is being developed under Brazil’s Trial Mining License, which currently permits up to 300,000 tonnes of ore processing annually. Cabral is in the process of expanding this allowance to 500,000 tonnes per year, which could further enhance the project’s profitability. The company is also working towards securing the full mining license, which would enable a production increase to 720,000 tonnes per year by 2027.
Cabral has applied for environmental licenses, with decisions expected in 2025. The company anticipates that these regulatory approvals will align with its projected timeline for ramping up production.
Test work conducted by Kappes Cassiday and Associates (KCA) in Reno, Nevada, has shown high recovery rates for the Cuiú Cuiú ores, with gold extractions exceeding 90% in many cases. Heap leaching, a relatively simple and cost-effective processing method, has been selected for the project due to its suitability for the oxide ores found at Cuiú Cuiú.
Cabral Gold’s next phase of development will focus on detailed engineering, further drilling to expand the resource base, and securing project financing. The company is in discussions with potential financiers, with an eye toward making a final investment decision by mid-2025.
Cabral Gold last traded at $0.38 on the TSX Venture.
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