Unigold Inc. (TSX-V:UGD, OTCQX:UGDIF) revealed that it has issued a positive feasibility study for its Candelones oxide project in the Dominican Republic, showing a low-cost starter pit with a minimal environmental footprint.
The study showed a pre-tax net present value of US$38 million, assuming a 5,000 tonnes per day (tpd) run-of-mine heap leach operation and a pre-tax internal rate of return (IRR) of 52%.
"The feasibility study has enhanced the economics as compared to the company’s April 2021 Preliminary Economic Assessment (PEA)," highlighted Gordon Babcock, the firm's chief operating officer (COO).
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"While inflation did have an impact, we were able to realize savings by identifying local suppliers and contractors for many of the cost centers," he added.
The study showed average annual payable gold production of 31,400 ounces and initial capital expenditure to realize the project of US$36 million. The average blended gold recovery was pegged at 85% at a total cash cost of US$14 per tonne of material treated.
"The capital and operating costs increased 4% relative to the PEA estimates," added Babcock.
"Metallurgical recoveries increased by 10% reflecting changes in ore handling and stacking. Recovered ounces increased by 7,400 ounces relative to the PEA due to improved metallurgical recovery assumptions."
Joseph Hamilton, the CEO of Unigold, told investors: "The economics are compelling for a starter operation.
"While this study looks at oxide production only, the integration of the larger sulphide resource into the project planning is expected to enhance the mine life and production profile. We are awaiting the approval of the exploitation concession application which will be required for us to get to a production decision for the Candelones project."
A 5% royalty on all metals produced from the Candelones project is payable to the Government of the Dominican Republic and forms a minimum tax.
A closure plan for the Candelones project will be developed in consultation with the Government and the local communities as part of an Environmental and Social Impact Assessment (ESIA). Closure costs are estimated at US$5.1 million.
Unigold is mainly focused on exploring and developing its gold assets in the Dominican Republic. The Candelones oxide gold deposit is within the 100% owned Neita Fase II exploration concession in Dajabón province in the northwest of the country.
Contact the author at giles@proactiveinvestors.com