BRITISH COLUMBIA – IDM Mining of Vancouver has updated the preliminary economic assessment for its Red Mountain gold-silver project near Stewart, and the company says the numbers are more robust than the study done two years ago. The report was prepared by JDS Energy and Mining with input from other specialists.
The updated PEA incorporated a new mine and infrastructure plan. The after tax base case has a net present value of $86.6 million (5% discount) and an internal rate of return of 42.4%. Payback is estimated to be two years. The base case used US$1,250/oz gold, US$15/oz silver and an exchange ratio of C$1.00 equals US$0.80.
The initial capital costs would be C$111.2 million, including a 10% contingency. Underground bulk longhole mining at a rate of 1,500 t/d would be conducted for eight months a year, but processing would be done year-round at a rate of 1,000 t/d. Mine life would be five years with a 15 to 18 month construction period.
Average annual production in the updated PEA is 25% more than the original study resulting in 70,000 oz of gold and 194,000 oz of silver produced yearly. Direct operating cost over the life of the project will be US$441/oz of gold recovered. Net of silver by-product, costs drop to US$418/oz of gold.
A more detailed look at the results of the new PEA is available at www.IDMmining.com.