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GoGold Resources (TSX:GGD) has released an initial preliminary economic assessment for its wholly owned Santa Gertrudis mine in Mexico. The report indicates an internal rate of return of 58 percent at a 5 percent discount, a net present value of US$150 million for the project and a sizeable increase to the mineral resource estimate.
GoGold Resources (TSX:GGD) has released an initial preliminary economic assessment for its wholly owned Santa Gertrudis mine in Mexico. The report indicates an internal rate of return of 58 percent at a 5 percent discount, a net present value of US$150 million for the project and a sizeable increase to the mineral resource estimate.
As quoted in the publication:
The initial PEA confirms that the company could potentially develop a low cost open-pit heap leach mine in Sonora, Mexico that could represent a very robust economic opportunity. More specifically, at a gold price of US$1,250 per ounce, the base case price assumption, Santa Gertrudis has an estimated US$232 million after-tax net cash flow, aUS$150 million after-tax net present value at a 5-per-cent discount rate, a highly attractive after-tax internal rate of return of 58 per cent, and a low initial capital expenditure of US$32 Million for construction and mine preparation.
The report has also significantly increased the Indicated mineral resource estimate by over 200,000 ounces of gold and the Inferred mineral resource estimate by over 113,000 ounces of gold from the original mineral resource estimate of June 17, 2014 also prepared by P&E. The completed PEA technical report will be filed on SEDAR within 45 days of this news release. It should be noted that only oxide and mixed (oxide / sulphide) material was used in the preparation of the PEA study.
GoGold Resources president and CEO, Terry Coughlan, said:
We are extremely pleased with the results of the initial PEA study for Santa Gertrudis. The large increase in gold ounces along with the robust economic opportunity to develop our second low cost producing mine in Mexico, substantiates the reasons why the company was so eager to secure this gold project for our shareholders. The PEA report shows an initial NPV of US$150 million, and has the potential for exploration upside and additional gold ounces through targeted exploration. Our strategy, as it was with our initial low cost producing Parral Mine that went from grass roots to production in under twenty four months, is to fast track this second project, the Santa Gertrudis gold mine into production.
Click here to read the GoGold Resources (TSX:GGD) press release