Black Dragon Gold (ASX:BDG,TSXV:BDG) has released the preliminary economic assessment (PEA) for its Salave gold project in Spain, saying it is set to have a 14-year mine life.

Salave’s after-tax net present value falls between US$184.7 and US$273.9 million, with the base case set at US$230 million. Meanwhile, the asset’s pre-production capital expenditure is estimated at US$95.3 million, with life-of-mine costs docketed at US$19.3 million.

Located in Northern Spain’s Asturias province, the project’s resource is estimated at 8.21 million tonnes (Mt) at 4.58 grams per tonne (g/t) gold for 1.21 million ounces (Moz) in the measured and indicated categories. The inferred category is estimated at 3.12 Mt at 3.47 g/t gold for 0.35 Moz.

“The completion of the PEA is a major milestone on the path to development of the Salave project and the metrics support our belief that Salave can potentially generate strong returns for shareholders,” Black Dragon Managing Director and CEO Paul Cronin said in a statement.

“It forms the first step in our permitting process, presenting a new optimized process on a zero-discharge basis that minimizes the visual and surface impact of the project.”

The PEA also indicates that Salave will see average annual production of 79,200 ounces of gold in concentrate at an average grade of 59.7 g/t gold, with life-of-mine plant throughput of 9.19 Mt. Average mining and processing throughput is docketed at 2,000 tonnes per day.

Going forward, the company’s next steps for Salave are to submit a project description for an environmental and social impact assessment this month.

Later this year, additional geophysics over Salave’s investigation permit will take place, along with soil geochemistry testing on potential drill targets. A prefeasibility study is docketed for October of this year.

Black Dragon’s share price skyrocketed 20 percent on the ASX on Monday (February 11), closing the day of trading at AU$0.12.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.