Toronto-listed Meridian Mining UK says results of a preliminary economic assessment have positioned the Cabacal gold-copper project in Brazil as a “promising growth opportunity” for the company with potential payback of the circa-US$180 million start-up capex in less than a year.
The PEA work by Ausenco points to average annual gold-equivalent production of 131,100 ounces at AISC of US$670.70/oz gold-equivalent in years one to five, and a total haul of 1.02 million ounces gold, 353 million pounds of copper and 1.76Moz of silver over about 22 years.
Potential year-one mill feed at 2.3 grams per tonne gold and 0.29% copper generates $204m of after-tax free cash flow for capital repayment in 10.6 months using Meridian’s base-case commodity prices of $1650/oz gold, $3.59/lb copper and $21.35/oz silver.
“Within just two years of acquiring Cabacal we have produced our first economic study outlining an after-tax NPV [5% discount rate] of $573m, which is a testament to our commitment to swift and effective progress,” Meridian CEO Adrian McArthur said.
“The PEA lays a solid foundation for expansion as the company anticipates that optimisation studies will confirm the potential for superior economic returns by increasing annual throughput from 2.5Mt to about 4Mt after year four, while still using the same resource.
“What excites us even more is the potential for further growth, not only at Cabacal but also at our other satellite targets, including the nearby St Helena mine within trucking distance.
“This presents a genuine opportunity for us to advance Cabacal, as outlined in our PEA, and to systematically develop a cornerstone asset in a significant new gold and copper camp over time.”