GoGold Resources (TSX: GGD) has released a feasibility study for its Los Ricos South Project in Jalisco, which is highlighted by a net present value of US$355 million on an after-tax basis, using a 5% discount rate. The after-tax IRR meanwhile amounts to 28% in the base case scenario.
The estimate is based on an underground mine that is expected to have a 15 year mine life, with average annual production of 7.3 million silver equivalent ounces over the first five years. Over the life of mine, Los Ricos South is expected to produce 41 million silver ounces, 424,000 gold ounces, and 11 million pounds of copper, which equates to 80 million silver equivalent ounces.
Those ounces are expected to be produced at an average operating cash cost of $9.94 per ounce of silver equivalent, while all-in sustaining costs are estimated at just $11.19 per ounce over the first five years of mine life. Average all in sustaining costs over the life of the mine are estimated at $12.32 an ounce.
Initial capital costs for the project are pegged at $227 million, with construction expected to take two years to complete. Sustaining costs are estimated at $100 million over the entire life of mine.
The estimate is based on a base case scenario of US$2,330 per ounce gold, US$26.80 per ounce silver, and US$4.00 per pound copper. The economics are said to improve to a net present value (5%) of US$469 million with an IRR of 34% on an after-tax basis at US$2,608 per ounce gold and US$30 per ounce silver.
READ: GoGold Reports Q4 Production Of 551,337 Silver Equivalent Ounces
“Our expectation is that we will receive a positive outcome on our permit application for our underground mine by the end of March 2025. The Company has a strong balance sheet and we are in advanced discussions with prospective lenders for the remaining financing required for construction,” commented Brad Langille, CEO of GoGold, on the feasibility study.
Reserves for the Los Ricos South project meanwhile are pegged at 90.7 million ounces of silver equivalent, consisting of 47.8 million ounces of silver, 457,000 ounces of gold, and 23.8 million pounds of copper across both proven and probable categories.
GoGold Resources last traded at $1.41 on the TSX.
Information for this story was found via Sedar and the companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
