GoGold Resources Inc. has officially published the results from a Feasibility Study (FS) at its Los Ricos South (LRS) Project, which is understood to include a re-engineered 2,000 tonne per day underground mine plan, compared to the Preliminary Economic Assessment.
Going by the available details, Ausenco Engineering Canada ULC completed the design and cost estimates for this process plant. Markedly enough, though, the whole process also involved a Front-End Engineering & Design (FEED) element, capable of generating greater engineering detail on key vendor supply packages.
You see, the stated component actually transcends the normal Feasibility Study level of detail to instill better technical and engineering data across specific aspects of the plant design. All in all, this FEED component is expected to allow for a quicker transition to the detailed engineering and field execution phases in the future.
Anyway, talk about the results on a slightly deeper level, they revealed that the net after-tax NPV (net present value) of the project was deemed to be US$355 million, with an after-tax IRR of 28%. This value was calculated after taking into account a discount rate of 5%.
Next up, we must dig into how, at approximate spot metal silver price of $30/oz and gold price of $2,608/oz, NPV (using a discount rate of 5% again) was discovered to be US$469 million with an After-Tax IRR of 34%.
As for the production levels, the project has, so far, has shown to produce a total of 80 million payable silver equivalent ounces (AgEq), consisting of 41 million silver ounces, 424 thousand gold ounces, and 11 million pounds of copper. This translates to an average annual production of around 7.3 million AgEq oz over first 5 years.
The project in question also achieved successful conversion of Mineral Resources to Proven and Probable Mineral Reserves that, on their part, were worth 10.2 million tonnes grading 276 g/t AgEq and contained 91 million ounces AgEq, including 7.5 million underground tonnes grading 326 g/t AgEq. Beyond that, GoGold also deployed a bulk mining method of longitudinal sub-level long-hole mining and found that the average underground mining width was 11 metres.
Turning our attention towards the capital costs, the initial capital costs settled around $227 million, including $21 million in contingency costs, over an expected two year build, and sustaining capital costs of $100 million over the life of mine. GoGold’s feasibility study also learnt that the average operating costs of the project were around $9.94/oz AgEq.
“This FS has a very high level of detail, exceeding the normal feasibility study level of detail in the process plant design. Our expectation is that we will receive a positive outcome on our permit application for our underground mine by the end of March 2025. The Company has a strong balance sheet and we are in advanced discussions with prospective lenders for the remaining financing required for construction. With this detailed study and once we have obtained the permit, we should be able to formally make a construction decision and begin building the mine,” said Brad Langille, President and CEO.
Among other things, we ought to mention that, as a complement to the study in question, GoGold also conducted an extensive metallurgical test program at the project site.
In essence, this program was designed to test and validate the key components of the process, and therefore, confirm process plant performance. The stated assessment was basically conducted for metrics like crushing and grinding, thickening and filteration, cyanide leaching and reagent consumptions, SART performance, Merrill Crowe (zinc precipitation), dry-stack tailings, detoxification, and dewatering (maximizing water recovery).
“We have the support of the local community for the project and have begun the process of building our mining and technical services team. Looking beyond the imminent construction, we also see the opportunities for more near mine exploration with a focus on growing more high grade underground resources in Los Ricos South and also look to advance Los Ricos North in 2025,” said Langille.
