Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) has confirmed the robust economics of its recently acquired Tres Cruces oxide gold project located in Peru with an updated preliminary economic assessment (PEA).
The company’s executive vice president Aneel Waraich told Proactive: “It’s great to put out an update [on the project] as its new owner.”
Steppe Gold owns 100% of Tres Cruces having closed its acquisition of the project less than eight weeks ago in late June.
Waraich said that Steppe Gold wanted to update the previous PEA on the project from March 2022 to understand the realistic costs Steppe Gold would be dealing with today.
“Of course, costs have increased,” Waraich noted, referring to the tough macroeconomic conditions facing all miners.
“We saw about a 4% increase in capital expenditures (capex) to about $133 million, still delivering a 31% internal run rate (IRR) and US$160 million net present value (NPV) based on a $1,700 gold price after tax,” he said.
“This [NPV] would be closer to US$250 million at current spot pricing after tax, so still a very robust project.”
Meanwhile, Steppe Gold continues to progress its Phase 2 expansion at its ATO gold project in Mongolia which is being supported by a $150 million financing package.
“We are drilling quite a lot of holes across the whole mining license. We will have results coming in probably late September or early October,” Waraich said.
“Any new oxide delineation on that program will be a big win for us and shareholders because we already have an operating plant. It's low-hanging fruit.”
Contact the author at emily.jarvie@proactiveinvestors.com
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