GoGold Resources (TSX: GGD) this morning released the results of a preliminary economic assessment of its Los Ricos South project. Based on data collected to date on the property, an after tax net present value of US$295 million has been assigned to the project, based on $21.00 per ounce silver and $1,550 per ounce gold, including the standard five percent discount.
The net present value of the property represents a base case after tax internal rate of return (IRR) of 46%, with an estimated mine life of 11 years. Under this scenario, the company expects to mine a total of 69 million ounces of silver equivalent, with years two through six seeing an estimated average production of 8.7 million ounces of silver equivalent.
The PEA has essentially outlined a scenario where 2/3 of the operation is focused on open pit mining, while the remainder is mined through underground operations. The company expects that such an operation would cost initial capital of $125.1 million (including contingency), along with further sustaining capital costs of $62.3 million, with the operation as a result demanding $187.5 million in capital costs.
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Once operational, the firm expects to be able to conduct its operations at an all in sustaining cost of $11.35 per ounce of silver equivalent.
With the PEA now complete, the company has indicated it will look to complete the engineering studies required for a pre-feasibility study. This year, the company also intends to focus on Los Ricos North, where a 100,000 metre drill program is currently underway with an initial mineral resource estimate targeted for 2021.
GoGold Resources last traded at $2.45 on the TSX.
Information for this briefing was found via Sedar and GoGold Resources. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
