Gold/copper/silver miner Orvana, which operates mines in northern Spain and Bolivia, has received a positive preliminary economic assessment (PEA) report for what could be its third operation – Taguas, in Argentina.

The TSX-listed miner in May bought the property, about 25 km north of Barrick Gold’s Veladero mining operations and on Friday published the results of the PEA.

Prepared by Wood (formerly Amec Foster Wheeler), the study outlines inferred resources of 494 000 oz of gold and 18.11-million ounces of silver, at an estimated all-in sustaining cash cost (AISC) of $500/oz.

The PEA returned a pretax net present value of $55.1-million, at an 8% discount, a pretax internal rate of return of 21.7% and a payback period of three years.

Initial capital of $92.8-million will be required.

“These are very positive, early indicators for Taguas as Orvana’s third potential operation,” said CEO Juan Gavidia, noting that the project would set the pace for growth and lower overall costs across the company.

Taguas consists of 15 mining concessions over an area of 3 273.87 ha. It is located in San Juan, on the eastern flank of the Andes.

"Orvana's exploration team, and the Wood prefeasibility study consultants are in the planning stages to advance Taguas to the next level, which would include step-out drilling on additional, nearby, near-surface, oxide targets in order to determine any potential increase of the current mineral resources. The execution of any additional work on the property remains subject to Orvana obtaining sufficient financing to proceed forward,” commented Gavidia.

Orvana currently operates the producing El Valle and Carlés gold/copper/silver mines in Spain and the producing Don Mario gold/silver operations in Bolivia.

The miner produced 103 384 oz of gold in the financial year ended September 2018, and is forecast to produce between 100 000 oz and 110 000 oz in 2019. Copper production came to 8.2-million pounds and is forecast at a lower range of 3.2-million to 3.3-million in the current financial year.

The company is a high-cost producer with AISC of $1 259/oz in 2018.