Freeman Gold’s (TSXV: FMAN) Lemhi project would generate an after tax net present value of US$696 million and recover its construction cost within 2.5 years, according to a feasibility study released Monday.
The after-tax internal rate of return meanwhile is pegged at 34.4% and a payback period of 2.5 years. The study uses a 5% discount rate and a base-case gold price of US$3,650 an ounce.
At the current spot price of US$4,090 an ounce, the after-tax NPV rises to US$904 million, the return improves to 41.4%, and payback shortens to 2.1 years.
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Lemhi is designed as a conventional open pit operation feeding a carbon-in-leach plant, with average life of mine gold recovery of 94.8%. Over a 15.2-year mine life, production is estimated at 972,000 payable ounces. Annual output averages 64,141 ounces, though the schedule is weighted toward the early years, with the first decade running at 75,100 ounces of production a year as higher grade material is mined first.
Building Lemhi requires US$329.7 million in initial capital, with another US$167.5 million in sustaining capital over the life of the mine. C1 cash costs meanwhile are estimated at US$1,477 an ounce and all in sustaining costs at US$1,719.
Freeman noted that costs have risen versus the 2023 PEA, with the company blamining that increase on a revised mine plan that captures about 120,000 additional ounces while adding recovery improvements and permitting-focused design changes.
CEO Bassam Moubarak called the study a major milestone and said the project generates more than two dollars of after-tax NPV for every dollar of initial capital invested. “”Since the 2023 Preliminary Economic Assessment, we have materially enhanced the project through the incorporation of filtered tailings to support permitting objectives, improvements to the process flowsheet including additional crushing and grinding capacity to enhance metallurgical performance, and an optimized mine plan that increases projected gold production by approximately 120,000 ounces over the life of mine,” he added.
Freeman now turns to permitting, engineering optimization, and financing. The company is advancing environmental baseline work toward a Mine Plan of Operations submission and intends to pursue the FAST-41 federal permitting framework.
Freeman Gold last traded at $0.28 on the TSX Venture.
