VANCOUVER (miningweekly.com) – Canadian Stock Exchange-listed junior project developer Orefinders Resources has released strong economic results contained in a preliminary economic assessment (PEA) for the South Zone openpit, which is part of the Mirado gold mine, located to the southeast of Kirkland Lake, Ontario.
Nestled within the prolific gold producing Abitibi Greenstone Belt, the project boasts an exceptionally low total capital outlay of C$2.62-million, with only C$2.4-million required to achieve first production from the openpit.
The capital expenditures will be minimal owing to the decision to seek a toll processing arrangement, existing facilities on site, and the use of contractors in the mine operation. The proposed mine plans for both the openpit and underground scenarios use a production rate of 1 000 t/d of ore.
The PEA schedule assumes mining of 996 000 t of ore in the openpit, at an average grade of 2.33 g/t gold. Mining recovery has been estimated at 97% and dilution at 15%.
Based on a gold price assumption of $1 300/oz and an exchange rate of $1:C$0.76, the PEA's economics indicate a robust after-tax internal rate of return of 158%, a pre-tax undiscounted net present value (NPV) of C$30.8-million and a C$20.5-million after-tax NPV at a 5% discount rate. Payback on capital is reported at seven months.
The life-of-mine (LoM) cash operating cost is $941/oz of gold, and the LoM all-in sustaining cost is $969/oz of gold.
According to the PEA, completed by P&E Mining Consultants, the project is considered economically viable with the current compliant resource estimate of 559 000 t grading 2.61 g/t gold for 46 900 oz in the indicated resource category. It also hosts 382 000 t at an average grade of 2.66 g/t gold for 32 700 oz in the inferred category, based on a cutoff grade of 1 g/t gold.
Orefinders' CSE-listed stock gained as much as 23% on Monday morning following the news release, to reach an intraday high of C$0.16 apiece.