TORONTO (miningweekly.com) – Triple-listed Minera IRL on Wednesday revealed improved plans for its flagship Ollachea gold project, in Peru, saying that despite the project’s expected life remaining similar to the 2012 definitive feasibility study (DFS), several areas benefitted from the optimisation process.

The Lima, Peru-based firm said that the updated mine plan, prepared by international consultancy Mining Plus, had resulted in an optimised ramp-up with the average yearly gold output increasing to 100 000 oz over the first two years, up from 70 500 oz in the Ollachea DFS.

The average yearly output would top 100 000 oz over the nine years of mine life, almost identical to the Ollachea DFS.

Total gold output rose to 930 000 oz, up marginally from 921 000 oz.

The initial capital cost of the project was pegged at $164.7-million, down from $177.5-million, and the mine would produce yellow metal at an average total cash cost of $587/oz, slightly up from $583/oz.

Ollachea has an after-tax net present value, at a 7% discount rate and gold price of $1 300/oz, of $181-million, up 17% from $155-million. The internal rate of return is 28.2%, up from 22.1%.

With the new scenario in place, the payback period decreased to 3.1 years, from 3.7 years.

The company, which has stock listed on London's Aim, the Lima Stock Exchange and the TSX, now expected production to start in the second quarter of 2016, as opposed to the first quarter.

“The resulting optimised underground mine design and production schedule … has allowed us to bring forward considerable gold production. This, along with $9.5-million of deferred capital, has enhanced the project's financial projections,” executive chairperson Courtney Chamberlain said.

He added that the company was confident that it would “soon” receive the construction permit, while its effort on the debt restructuring and project financing continued.

“Based on the optimisation just completed, and assuming that financing is in place and project development can commence in the third quarter of 2014, the latest schedule indicates that construction should be completed within 21 months, or the first quarter of 2016 [from late 2015], with a ramp-up to full production in the second quarter of 2016 [from the first quarter of 2016],” Chamberlain noted.

Trading at C$0.155 apiece on Wednesday, the company’s TSX-listed stock is down 20% so far this year.