Landore Resources Ltd (LON:LND) has revealed the findings of a preliminary economic assessment of the BAM gold project, at Junior Lake in Ontario, Canada.
The project is deemed to have 951,000 of contained ounces of gold, including 701,000 ounces in the indicated resources category.
Cube Consulting’s base case view of the project is focused on some 515,000 ounces of gold, while the upside case is based on 800,000 ounces.
In the base case, the project is valued at US$69.2mln net present value and it gives an internal rate of return of 22.4% - and the upside is seen at US$123.7mln with an IRR of 26.9%.
Cube estimates an ‘all-in-sustaining cost’ (AISC) of US$806 per ounce for the base case and US$816 per ounce.
The initial capital expenditure bill is estimated at US$73.53mln for plant and infrastructure, plus an additional US$20.28mln for pre-production work including mining costs.
"We are very pleased with the results of the PEA which clearly demonstrates the robust nature and growth potential of the BAM gold project,” said Bill Humphries, Landore chief executive.
“We are confident that, with the conversion of the 'unclassified mineralisation' into resource together with infilling and extending the existing deposits, the project has a high probability of being advanced from the base case 515,000 ounces gold to the extended case 800,000 ounces gold with significant further upside."
Landore said there’s still significant resource potential remaining and that indicates follow up district scale exploration programmes are warranted.
Specifically, it sees the potential for other gold mineralization targets along the 31 km strike length of the Junior Lake Shear.