The strong gold price is underpinning robust economics of one of Ecuador’s five strategic mining projects, with an updated feasibility study calculating the Loma Larga gold project’s aftertax net present value (NPV) at $454-million and its internal rate of return (IRR) at 28.3%.
Developer INV Metals this week announced the results of the updated feasibility study, which incorporates the relocation of the plant infrastructure and tailings facility near the proposed mine site, updated capital and operating cost estimates and current mineral resources and reserves.
CEO Candace MacGibbon reports that the capital and operating costs have not changed materially since the results of the previous feasibility study in January 2019, but notes that the gold price environment has strengthened with the updated study working on a long-term price of $1 400/oz.
This compares with a $1 250/oz price used in the 2019 study, which calculated an aftertax NPV of $356-million and an IRR of 24.7%.
Loma Larga is projected to be a low-cost operation with expected life-of-mine (LoM) cash costs of $559/oz, all-in sustaining costs of $627/oz, and all-in costs of $789/oz.
Initial pre-production capital expenditures are estimated at $316-million, with sustaining capital of $71-million and closure costs of $22-million.
The projected 12 year mine life and forecast LoM mined production remain unchanged. Average yearly mined production is forecast at 223 000 gold equivalent ounces (GEO), with an average of 289 000 GEOs mined during the first four full years.
“Our focus in 2020 is to continue to advance the environmental permitting process with the goal of obtaining the required significant permits for development. The first milestone in the process is the completion and submission of the environmental impact study (EIS) to the Ministry of Environment (MAE). We are working together with the MAE and the Ministry of Energy and Non-renewable Resources to achieve this goal,” says MacGibbon.
She added that INV plans to break ground next year with the goal of achieving first gold concentrate in late 2022.