VANCOUVER (miningweekly.com) – TSX-listed Argonaut Gold has revealed details of a cheaper, more scalable approach to developing its 100%-owned Magino gold project, near Wawa, in Ontario.
Opting to start out with a 10 000 t/d mill, instead of the 30 000 t/d mill envisioned in its January 2016 prefeasibility study, the project now represents an in-house fundable venture, should a construction decision be made, the Toronto-based company said on Wednesday.
Assuming a $1 250 gold price and a 0.78:1 US dollar to Canadian dollar, the readjusted Magino mine and mill would have an after-tax net present value, using a 5% discount, of $288-million, and an internal rate of return of 19.5%, with a 3.9-year payback period.
The mine is expected to produce 1.96-million ounces of yellow metal over the mine life, at an average rate of 115 700 oz/y.
The feasibility study pegged the preproduction capital at $321-million, including a contingency of $28-million. Sustaining and closure costs are set at $84-million.
The project’s all-in sustaining cost is expected to average $711/oz. Gold production will average 123 000 oz/y, over the 14-year life of the mine.
The mine plan is based on measured and indicated resources of 144-million tonnes, grading 0.91 g/t gold, plus 33.2-million tonnes of inferred resource grading 0.83 g/t gold.
The company’s Toronto-quoted equity gained as much as 3.8% on Wednesday, to C$2.47 apiece.