GoGold eyes permit for Los Ricos South underground in March

The Los Ricos South project was launched in March 2019. Credit: GoGold ResourcesGoGold Resources (TSX: GGD) has released a feasibility study for the Los Ricos South (LRS) project in Mexico that shows it would cost $227 million to build and provide a 28% internal rate of return.The rate of return would rise to 34% using spot prices of $30 per oz. silver and $2,608 per oz. gold for the underground mine in Jalisco state, about 500 km northwest of Mexico City, the company said Friday.The base case net present value, using a discount rate of 5%, is $355 million, rising to $469 million with the higher metal prices, it said. The payback period for this scenario is 2.6 years, compared to two years at assumed spot prices.“Our expectation is that we will receive a positive outcome on our permit application for our underground mine by the end of March,” CEO Brad Langille said in a press release. “Once we have obtained the permit, we should be able to formally make a construction decision and begin building the mine.”Shares of GoGold Resources rose 1.5% to C$1.39 apiece by early Friday afternoon in Toronto. This gives the company a market capitalization of C$473 million ($327m).UndergroundThe mine would have a 15-year mine life beginning with a 12-year underground, followed by an open pit operation that begins in the 10th year, according to the study.Total production is pegged at 80 million silver-equivalent oz. (41 million oz. of silver, 424,000 oz. of gold and 11 million lb. of copper), including average annual production of 7.3 million oz. silver-equivalent in the first five years.The detailed process plant design by Ausenco contains front-end engineering that would “allow for a quicker transition to the detailed engineering and field execution stages”, the company said. It re-engineered the 2,000-tonne-per-day plan from a 2023 preliminary economic assessment.The capital spending includes $21 million in contingency over an expected two-year build. Sustaining capital costs are calculated at $100 million over the life of mine.ExplorationLooking beyond the imminent construction, GoGold also sees opportunities for more near-mine exploration with a focus on growing additional high-grade underground resources at LRS.It will also look to advance the Los Ricos North (LRN) project located 25 km away. LRN represents the other part of its 240-sq.-km property, and is subject to a May 2023 PEA that showed an NPV of $413 million.The feasibility study released Friday incorporates an updated mineral resource estimate for LRS, totalling 11 million tonnes grading 162 grams silver per tonne, 1.56 grams gold and 0.12% copper in the measured and indicated category.It also has 2.2 million inferred tonnes at 106 grams silver, 1.11 grams gold and 0.27% copper. Over half of the contained metals are from out-of-pit resources.Some mineral resources have been converted into proven and probable reserves, now estimated at 10.2 million tonnes grading 145.4 grams silver, 1.39 grams gold and 0.1% copper.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com