Canada-based project development company Sulliden Gold on Monday said it planned an 87 700 oz/y gold-equivalent operation in the Peruvian Andes.
The company reported the results of a feasibility study for its Shahuindo gold/silver project, which pointed to the operation being able to support production of 84 500 oz/y of gold and 167 200 oz/y of silver, from only 40% of the established oxide mineral resource.
The company said it planned to start with a low capital-cost and smaller-footprint operation, even when the current resources allowed for a significantly higher mining rate and production profile. It said the initial mining scenario would act as a foundation for future production growth by internally funding future expansions.
“We are pleased to be able to deliver an initial project study with modestly sized capital costs that we believe should provide faster cash-flow generation, expeditious permitting, and a shorter construction schedule," CEO Peter Tagliamonte said in a statement.
The feasibility study, completed by Kappes, Cassiday & Associates and Mine Development Associates, attached a net-present after-tax value, using a 5% discount rate, of $248.6-million to the project. The total gold-equivalent production over the life-of-mine (LOM) expected to be 909 500 gold-equivalent ounces.
Sulliden planned to start mining at a rate of 10 000 t/d at its fully owned epithermal gold/silver deposit, which would produce gold at about $552/oz. The feasibility study mine plan has a LOM average gold grade of 0.84 g/t and an average silver grade of 9.5 g/t.
The first phase of the mine would cost about $131.8-million to construct and the sustaining capital over the envisioned ten-and-a-half years LOM was stated at $47.8-million.
The feasibility study used base-case prices of $1 415/oz of gold and $27/oz of silver for its products, which provided the project with a pretax internal rate of return of 52.2%, generating $ 52.1-million average yearly after-tax cash flow, with a payback period of 2.2 years.
The Shahuindo project had current measured and indicated resources of 147.31-million tons grading 0.54 g/t gold equivalent, for 2.43-million ounces of gold and 33.37-million ounces of silver. The total proven and probable reserves of the project was 37.84-million tons grading 0.85 g/t gold-equivalent, containing 1.02-million ounces of gold and 11.56-million ounces of silver.
The next step for the company would be to complete and submit to the Peruvian Ministry of Energy and Mines the environmental and social impact assessment report as part of the project's permitting process, which was expected before the end of December.
Sulliden said it would now focus on debt financing discussions with significant mobile equipment manufacturers to acquire the mobile equipment fleet of the mine.
The Toronto-listed stock of the company, which has a market capitalisation of C$282-million, traded nearly 5% lower at C$1.16 apiece on Wednesday.
Edited by: Creamer Media Reporter