-- An updated preliminary economic assessment "enhanced" value of the La Mina project in Colombia compared to the previous study, GoldMining (GOLD.TO and NYSE American: GLDG) said Tuesday.
Shares in Goldmining have turned positive and were at last look up 0.4% in US premarket trade.
The updated PEA incorporates current bench-marked costs and updated base case pricing of US$3,500 /oz gold (Au), $4.70/lb copper (Cu) and $40/oz silver (Ag), resulting in a 265% increase in after-tax net present value at 5% discount rate from the prior PEA disclosed by the company for the project, it said.
The study generated an after-tax net present value (NPV) of US$1.0 billion, with a 32.2% internal rate of return (IRR) and a 2.7-year initial payback period, it added.
Among other highlights, at current spot prices of about $4,775/oz of gold, $5.75/lb of copper and $77/oz of silver, the NPV increases to $1.8 billion with an IRR of 49.1% and initial payback of 1.9 years; initial capital expenditures are estimated at $523 million, representing an attractive 0.5x initial capital to base case NPV5% ratio that highlights the project's "potential for a compelling return on investment"; and average annual production of 152.4 koz Au equivalent over the first five years of operation, and total life of mine production of 1.5 Moz AuEq (comprising 1.2 Moz Au, 2.6 Moz Ag, and 195 Mlbs Cu) over an 11.2 year projected mine life.
"With these solid base case economics, which improve substantially at spot prices, the company is excited by the opportunity to further advance and de-risk the project on the path towards potential future development," Chief Executive Officer Alastair Still said.