TORONTO (miningweekly.com) – Shares in Guyana Goldfields plunged 20% after the company announced the results of a feasibility study for its Aurora project in the South American country.

The study detailed a mine that would produce 256 800 oz/y for the first 10 full years of output – 2015 to 2024 – at an average operating cost of $626/oz, including royalties.

Auroro would require $525-million in capital expenditure for the openpit stage, and then $465-million to build the underground mine, from 2014 to 2019.

The asset contains 4.6-million ounces of proven and probable reserves.

Guyana COO Claude Lemasson said that the study was full of “conservatisms” and that there was room for improvement. One such area was power generation.

The feasibility study gave the project a pretax internal rate of return of 14.9% and a payback period of 6.9 years, with a $644-million pretax net-present at a 5% discount rate.

Guyana Goldfields stock dropped 19.6% to close on the TSX at $6.75.

The Guyana government granted the company a mining licence for Aurora in November.
 

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