Positive Outcome For Arizona Gold Project
GMV Minerals Inc. (TSXV: GMV) has announced positive results from the Preliminary Economic Assessment (PEA) study of the Mexican Hat Gold Project, located in Cochise County, Southeastern Arizona.
Located in gold mining friendly Arizona, the Mexican Hat is a low-capital, open-pit, heap-leach investment opportunity.
Highlights:
- The Base Case generates a pre-tax Internal Rate of Return (IRR) of 39.3% (after tax 29.3%) and a pre-tax net present value (NPV) at a 5% discount rate of US$150.6 million (after tax $US100.0 million) with a 2.85 year payback of invested capital using a US$1,600 per ounce gold price.
- Based on price sensitivity analysis at approximately the current price of US$1,900 per ounce of gold, the project returns a pre-tax IRR of 58.3% (after tax 44.3%) and a pre-tax NPV at a 5% discount rate of $265.1 million (after tax US$182 million) with a payback period of 2.10 years.
- Base Case mine life of 10 years with total production of 525,000 ounces, averaging 52,500 ounces per year.
- Crushed mineralised material will be conveyor stacked at a rate of approximately 10,000 tonnes/day on a conventional heap leach pad.
- Capex: US$67.8M (including US$12.2M contingency).
- Opex: Low LOM Strip Ratio of 1.87.
- Estimated cash cost of production is US$951 per ounce with an all-in-sustaining cost of US$1,136 per ounce inclusive of sustaining capital and additional overhead support.
- Engineering design analysis indicates the potential to increase pit size and contained ounces with increased gold prices.
The mine plan is currently conceived as a conventional hard rock open pit. There are two independent pits which are developed with five-phase or pushback designs. Pit shells were designed using 6.0 m benches with a catch bench installed every 18 meters. A bench face angle of 66° was used, resulting in an inner-ramp angle of 45° when catch benches were included.
An 88% overall gold recovery has been used in this study, which was based on bottle roll and column leach test results. Base case haulage ramps are 26 m wide and have a design gradient of 10%. Processing rates are based on a daily crushing rate of approximately 10,000 tonnes per day utilising two stage crushing
The mine and crushing will be operated by contractors with oversight by GMV mine management. The mine plan produces a nominal tonnage to the crushing and heap leach of 3,500 Ktonnes per year (10,000 tpd) from a total material movement of 93.8 Ktonnes for the life of mine (26,106 tpd LOM average).
The company is confident significant exploration potential exists along strike and down dip on the principal controlling structure outside of the current resource area.
Specific portions of this arcuate fault that can be traced geophysically for close to 3 km beyond areas of known mineralisation have additional indicators for mineralisation such as proximal geochemical anomalies. A proposed drill programme has been designed to test eight separate portions of this target.
