80 GOLD CORP has officially published the results from its preliminary economic assessment (PEA) for the Mineral Point Project, which is located within the company’s broader Ruby Hill Complex.
According to certain reports, the stated PEA would go on to indicate Mineral Point’s potential in terms of becoming the flagship asset within i-80’s gold portfolio.
Talk about the realized results on a slightly deeper level, we begin from how the study discovered a large open pit heap leach gold mine with a life of mine worth approximately 17 years. Next up, it found the site to have an annual gold equivalent production of approximately 280,000 ounces following ramp up.
Another detail worth a mention here is rooted in the project’s estimated LOM cash costs that were deemed to be $1,270 per ounce, with all-in-sustaining costs settling around $1,400 per ounce.
Moving on to the updated mineral resource estimate, it fetched indicated gold mineral resource of 3.4 million ounces at 0.48 grams per tonne (“g/t”) and an indicated silver resource of 104.3 million ounces at 15.0 g/t.
As for the updated mineral resource estimate, it discovered an inferred gold mineral resource of 2.1 million ounces at 0.34 g/t and an inferred silver resource of 91.5 million ounces at 14.6 g/t.
Turning our attention towards project’s economics, they reveal that, based on a $2,175/oz gold price, the project’s undiscounted after-tax cash flows clocked $1,470 million with an after-tax net present value of $614 million, assuming a 5% discount rate, generating an 12% internal rate of return.
Next up, the PEA in question got to know that, assuming spot gold and silver prices of $2,900/oz and $32.75/oz respectively, the project’s undiscounted after-tax cash flows reached $3,665 million with an after-tax NPV of $2,092 million at a 5% discount rate, generating an IRR of 27%.
Another detail worth a mention here relates to mine construction capital, including all pre-production facilities and equipment. This capital was adjudged to be around $708 million. Out of that, $299 million was reported in mobile equipment for the initial fleet.
On top of that, i-80 GOLD’s PEA revealed the need to strip approximately 104 million tonnes in the first year of production to gain access of the body of mineralized material costing $287 million.
Moving on to LOM sustaining capital, it is estimated at $388 million, primarily for a leach pad expansion and mobile equipment maintenance and replacements. If we delve into total capital, it includes a contingency of 15%, or $63 million applied to LOM mobile equipment of $420 million. Beyond that, ! 25% contingency of $122 million has also been applied to all other capital, including earth works, infrastructure, and heap leach expansion costs.
All in all, project funding is expected to include a combination of cash flow from the company’s existing operations and a corporate debt facility.
“We are pleased to release PEA results for our Mineral Point project as it marks another key step in our plan to establish i-80 Gold as a mid-tier gold producer with a robust pipeline of growth. A key driver of future growth, Mineral Point is the largest of our two planned oxide projects complementing our three high-grade underground mines in northern Nevada. With significant production scale, a long mine life, and low costs, Mineral Point is expected to be the flagship project within our portfolio,” said Richard Young, Chief Executive Officer at i-80 Gold Corp.
Among other things, we ought to know that the primary mining method, at the site, will be a conventional open pit truck (24 trucks) and shovel (4 shovels) operation, moving approximately 100 million tonnes per year during a steady state of production.
We must also mention how the mined material will be eventually crushed, stacked and processed at the heap leach facility located on site at a rate of approximately 23 million tonnes per year during steady state.
Not just that, all of these mined materials will also be placed on leach pads following two-stage crushing. This processing stage is likely to include a Merrill Crowe circuit for the recovery of silver.
