Landore Resources Ltd (AIM:LND) has released the results of a preliminary economic assessment on the BAM gold project at Junior Lake in Canada.
The company has also commenced a review of the strategic options available in relation to its Canadian subsidiary and assets.
The PEA considers the economics of exploiting resources inside optimised pit shells of 22.4mln tonnes of ore grading 1.16 grams per tonne gold and containing 833,000 ounces gold.
The project assumes the construction of a 2.2mln tonnes per year processing plant, followed by a production period of 10.5 years.
The PEA indicates that BAM generates a post-tax net present value of US$231.2mln, and a post-tax internal rate of return of 66.7%. The BAM gold project has an after-tax simple pay back of 1.25 years from the start of production or 2.25 years from the start of production.
The company is now considering its options in a strategic review.
Total mineral resources at BAM have now reached 1.5mln ounces of gold and the company believes that it has the clear potential to become a multi-million ounce gold project.
Further drilling is planned to in July 2022.
"This Preliminary Economic Assessment, combined with the 50% resource increase reported in February 2022, reaffirms the profitability of the BAM gold project,” said Landore chief executive Bill Humphries.
“The resource has excellent growth potential, remaining open at depth and along strike to the east and west, all within established mining leases which cover more than 20 kilometres potential strike length. Other exploration works completed by Landore including exploratory drilling, trenching and soil surveys have identified anomalous gold over this area and the incredible potential for future resource growth.”