The Tulsequah river near Canarc Resources' New Polaris gold project, in British Columbia.
Shares in Toronto-listed Canarc Resources jumped 15% on Wednesday as the company announced an update of its 2019 preliminary economic assessment (PEA) of the high-grade New Polaris gold mine project in British Columbia, reflecting a higher gold price.
The 2019 PEA is based on a base case gold price of $1 300/oz and a Canadian to US dollar exchange rate of 0.77. This generated an after-tax net present value (NPV) of $216-million and an internal rate of return of 38%.
At a $1 500/oz gold price and a 0.71 exchange rate, the forecast economics significantly improve to a $333-million aftertax NPV and a 56% aftertax IRR.
Other benefits of the lower exchange rate include reductions of the cash operating cost from $433/oz to $400/oz of gold, and of the payback period from 2.7 years to 1.9 years.
"These updated economic assumptions clearly demonstrate the potential for our New Polaris gold mine project to become a high-margin, low-cost gold mine,” said Canarc CEO Scott Eldridge.
The company is evaluating the potential to build and operate a 750 t/d gold mine at New Polaris using flotation to produce a high-grade gold sulphide concentrate, bio-oxidation to oxidise the concentrates, and leaching of the oxidised concentrates to produce 80 000 oz/y of gold in doré bars on site.
The mine will operate for 8.7 years.
Canarc closed 15% higher at C$0.075 a share on Wednesday.