Chesapeake Gold Updates PFS for Metates Project

Chesapeake Gold Corp. (TSXV:CKG) released an updated prefeasibility study( PFS) for its Mexico-based Metates gold-silver-zinc project. The new PFS looks at a development scenario that requires lower ore throughput than the scenario laid out in the original March 2013 PFS.
As quoted in the press release:

• Proven and probable mineral reserves of 18.3 million ounces gold, 502 million ounces silver and 4.0 billion pounds of zinc
• Initial Phase 1 capital cost of $1.91 billion, including a contingency of $244 million
• Average gold cash cost on a by-product basis is -$339 per ounce for years 1-4, and $346 per ounce for years 1-10
• Average annual gold production of 700,000 ounces for the first 10 years of Phase 2 operations (years 5-14)
• Average annual production of 14 million ounces silver and 115 million pounds of zinc for the first 10 years of production
• Life of mine by-product cash cost of $628 per ounce and AISC cost of $662 per ounce
• Phase 2 capital cost of $1.59 billion, including a contingency of $253 million
• Life of mine strip ratio of 1.1:1
• At base case metal prices, pre-tax NPV of $1.78 billion at a 5% discount rate and an after tax NPV of $737 million

P. Randy Reifel, president of Chesapeake, commented:

Few world-class gold projects have scalable mine options. The Updated PFS demonstrates that an initial smaller mine with staged development at Metates can deliver attractive operating metrics with strong economics at current metal prices. Metates scalable approach is achievable due to the deposit’s highest grades being realized early in the mine life, a very low strip ratio, low energy costs and proximity to key existing infrastructure. For our stakeholders, the Updated PFS also meets the industry’s highest and best standards with respect to water stewardship and tailings management.

Click here to read the full Chesapeake Gold Corp. (TSXV:CKG) press release.