FULL DISCLOSURE: ESGold Corp is a sponsor of theDeepDive.ca.
ESGold Corp (CSE: ESAU) yesterday released their much-awaited updated preliminary economic assessment for their flagship Montauban Gold-Silver project in Quebec. The study is said to have outlined their position as a pre-production gold miner with both near term cash flow and discovery upside.
The revised study has seen the economics improve dramatically for the Montauban project, with the after-tax net present value jumping to $24.27 million, alongside an internal rate of return of 60.3%, which is based on US$2,900 an ounce gold and US$31.72 an ounce silver using a 5% discount rate. Prior studies had estimated the NPV to be in the ballpark of $6.99 million.
On a pre-tax basis, the NPV climbs to $44.53 million, while the IRR sits at 105.1%, which is significant considering that ESGold has more than $20 million in tax-loss carry forwards which will offset taxable income over the first three years of production.
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The estimates are based on a high-margin tailings reprocessing operation that would operate for a period of four years, with estimated gold recoveries of 92% and silver recoveries of 77%. Initial capital expenditures are estimated at just $18.81 million, which includes contingencies. Total life of mine revenue is estimated at $103.7 million.
“This PEA is a milestone for ESGold and a validation of our strategy. A 60% after-tax IRR, sub-two-year payback, and low initial capex are the hallmarks of a project built to generate cash flow quickly while limiting dilution and execution risk. Just as important, our fully permitted status and construction progress reduce the timeline from paper to pour. With commissioning preparations underway and a robust exploration pipeline, anchored by an upcoming 3D model and recent deep imaging to ~1,200 metres, we see a clear runway to first production by year-end and meaningful growth beyond it,” commented Gordon Robb, CEO of ESGold.
ESGold last traded at $0.72 on the CSE.
FULL DISCLOSURE: ESGold Corp is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is long the equity of ESGold Corp. The author has been compensated to cover ESGold Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
