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.
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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.