Premier Gold Mines (TSX: PG) this morning released an updated preliminary economic study for its McCoy-Cove Property, which is located near Battle Mountain, Nevada. The property reportedly has an after-tax net present value of $306 million, based on a gold price of US$1,680 per ounce.
The study conducted has determined that a mineral resource of 351,000 ounces of gold at 0.316 ounces per tonne as well 943,000 ounces of silver at 0.85 ounces per tonne exists on the property on an indicated basis. Furthermore, an additional 1,353,000 ounces of gold at 0.317 ounces per tonne exists on the property, along with 2,565,000 ounces of silver at 0.602 ounces per tonne on an inferred basis.
In terms of economics, average operating costs of the project are estimated at $215 per tonne, with a cash cost of $859 per ounce of gold, and all in sustaining costs of $948 per ounce of gold. Based on average annual production of 102,000 ounces of gold, this gives an after-tax payback period of 4.5 years, which is based on mine construction costs of $81.9 million and pre-development costs of $23.9 million.
The PEA currently outlines an 8 year mine life based on the current resource, however the current plan only calls for mining of the Helen and Gap deposits, with potential to expand mine life further with both deposits remaining open for expansion. Also, the Cove South Deep and 2201 zones were not included, providing further opportunity for mine expansion.
Looking forward, the company has indicated that for 2021 and 2022 the focus will remain on lab and economic evaluations of alternative processing methods, as well as on optimizing the mine plan. This optimization will include a hydrological model, baseline studies, and development of an exploration decline to support underground diamond drilling, enabling the firm to upgrade and increase mineral resources. A feasibility study is slated to occur in 2023 – 2024.
Full details of the PEA can be found here.
The McCoy-Cove project is slated to become the cornerstone asset of i-80 Gold Corp, following a spin out from the company related to Premier’s acquisition by Equinox Gold.
Premier Gold last traded at $3.04 on the TSX.
Information for this briefing was found via Sedar and Premier Gold Mines. 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.