Eastern Europe-focused Velocity Minerals has completed a positive preliminary economic assessment (PEA) for the Rozino openpit gold project, paving the way for the TSX-V-listed company to earn its 70% in Bulgaria project.

The assessment is based on an openpit mining operation, which recovers gold by a combination of on-site preconcentration in a flotation plant and further processing to saleable doré in an existing carbon-in-leach (CIL) plant in Kardzhali, 85 km by road from Rozino. 

The mine, which will require an estimated $97.6-million to develop, will produce about 65 000 oz/y at an all-in sustaining cost of $543/oz.

The PEA financial model returned an after-tax net present value of $129-million and an after-tax internal rate of return of 33.1%.

“We have achieved our goal of advancing Rozino from discovery and exploration drilling through to this positive economic assessment in just over one year,” Velocity president and CEO Keith Henderson said on Tuesday, adding that it would now proceed towards a prefeasibility study in joint venture with underlying owner Gorubso.

Velocity believes that there is significant potential for resource expansion at Rozino and Henderson reported that additional exploration drilling would be completed over the coming months in tandem with infill drilling of the existing mineral resource.

The work completed at Rozino represents a first step in Velocity’s strategy of exploring and developing multiple satellite deposits for processing in the existing centrally located CIL plant. The company confirmed that it is completing due diligence on other advanced properties located within the exploration and mining alliance area, with a view to earning 70% interest through additional option agreements with Gorubso. 

"The aim is to build a multi-asset production profile that maintains annual production of more than 100 000 oz of gold over a period in excess of ten years,” Henderson commented.

The PEA was prepared by CSA Global.