G Mining Ventures Corp. has announced the results of its 2022 feasibility study (FS) for the development of its wholly-owned and permitted Tocantinzinho (TZ) gold project in Brazil.
The company said the FS confirms robust economics for a low-cost, large-scale, conventional open pit mining and milling operation, with industry-leading operating costs and a high rate of return.
Furthermore, the study outlines total gold production of 1.8 million gold ounces over 10.5 years, resulting in an average annual gold production profile of 174,700 ounces with an all-in-sustaining cost (AISC) per ounce of $681. The project after-tax net present value (NPV) (5% discount rate) is $622 million with an after-tax internal rate of return (IRR) of 24% at a gold price of $1,600 per ounce, and $833 million and 29% at a spot gold price of $1,800 per ounce.
"The feasibility study builds on previous technical work while incorporating several improvements and optimizations, notably to the pit design, production schedule, process plant design and support infrastructures,” said G Mining Ventures (TSX-V:GMIN) CEO Louis-Pierre Gignac in a statement.
“The capital and operating cost estimates rely on recent budgetary quotes reflecting the current cost environment and our project execution approach. Our procurement strategy is to favor sourcing from in-country manufacturers where possible to maximize local benefits and benefit from simplified logistics.”
The CEO added: “The project provides an attractive gold production profile of approximately 175,000 ounces per year over a 10.5-year mine life, making it one of the premier gold development projects in Brazil and a key socio-economic contributor to the Tapajos Region of Para State. Factoring recent inflationary pressure seen within the industry from a new project perspective, GMIN has delivered a study that highlights a very attractive rate of return. Our experience and expertise, proven in recent successful mine developments for Newmont and Lundin Gold (TSX:LUG), will play a key role as capital is deployed to deliver on these economics."
Other highlights of the feasibility study, which reflects optimized development plan and current cost environment, include:
- Years 1-5: Average annual gold production of 196,200 at AISC of $666/oz
- A 12% increase in mineral reserves to 2.0 million gold ounces
- A 7% increase in initial capital to $458 million and a 44% decrease in sustaining capital to $83 million, resulting in an overall 4% decrease in LOM capital costs to $564 million
- Launch of project financing process targeting 60% to 70% from non-equity sources, with target start of construction in mid-2022
- Well-funded with $58 million of cash and $27 million of in the money warrants maturing in the second quarter of 2022
The company said the study replaces the 2019 feasibility study, completed by Eldorado Gold Corporation, with updated mineral resource and mineral reserve estimates, re-sequenced mine plan, refined mill designs, and updated current capital and operating cost estimates.
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