GoGold Resources (TSX:GGD; OTC:GLGDF) released the initial preliminary economic assessment (PEA) for its Los Ricos North silver project in Jalisco state, Mexico, giving the project a healthy after-tax US$413 million net present value using a 5% discount rate. The after-tax internal rate of return is 29%.
The PEA envisions a 13-year mine life producing a total of 68.9 million oz. of silver, 221,700 oz. of gold, 22.8 million lb. of copper 144.1 million lb. of lead, and 242.2 million lb. of zinc. The initial capital costs will be US$221 million over an expected 18-month build. Provision is made for expansion capital of US$137 million and sustaining capital of US$6.0 million (110.3 million oz. payable silver-equivalent).
Average annual production will be 8.8 million oz. silver-equivalent in years one through 12. About three-quarters of the ore will be mined from four open pits containing oxide mineralization, and the other one-quarter from a pit which contains only sulphide mineralization.
The PEA base case was completed using a price of US#23/oz. for silver and US$1,800/oz. for silver.
The indicated resource for Los Ricos North is 22.3 million tonnes with a grade of 1.66 g/t gold-equivalent or 122 g/t silver-equivalent. The inferred resource is 20.5 million tonnes with a grade of 1.51 g/t gold-equivalent and 111 g/t silver-equivalent.
The Los Ricos property has two areas of interest, one to the north and the other to the south. They are separated by about 25 km. An initial 43-101 compliant resources estimate for Los Ricos South was announced in July 2020 and a PEA completed in January 2021.
Details from Los Ricos North and South projects are posted on www.GoGoldResources.com.