Vancouver-based Leagold has completed an updated feasibility study for the Santa Luz project that it acquired in the recent Brio takeover, which demonstrates the potential for restarting the 100 000 oz/y mine at a cost of $82-million.
However, the company’s first priority remains to optimise its three operating mines in Brazil, before it will make a decision on the restart of Santa Luz, which a previous owner shut down in 2014.
According to the updated feasibility study, the Santa Luz project will require a ten-month construction period and will require a retrofitting of the plant for gold recovery using resin, rather than carbon. Resin technology for gold recovery has been used at mines in South Africa, Nevada, Malaysia and in Russia.
The Santa Luz mine plan is to include a phased openpit mining schedule. This mine schedule starts with a low-strip-ratio pit design that is included within the full mine plan, which allows for future decision points that may also include further upside potential from underground mining.
Santa Luz will produce 1.06-million ounces over an 11-year mine life at an all-in sustaining cost of $856/oz.
The updated feasibility study calculated an after-tax cash flow of $302-million, using a $1 200/oz gold price. The project has an internal rate of return of 47% and a net present value of $149-million.
“With a high IRR and low costs, Santa Luz is a very attractive project,” said CEO Neil Woodyer.
He said, however, that the key next step for Leagold was the completion of a site-wide review of the Los Filos mine in Mexico, with several studies nearing completion related to the Bermejal underground mine, a potential carbon-in-leach plant, and an enlarged Los Filos openpit mine plan.
“Completion of these studies and their integration into a site wide long-term plan for Los Filos is anticipated for the end of 2018, so we can then determine our preferred capital allocation priorities.”