Vancouver-headquartered Spanish Mountain has announced the results of its prefeasibility study (PFS) for its namesake project, in British Columbia, affirming its potential to be a gold mine with robust production and profitability.
The Spanish Mountain mine will yield 2.1-million ounces of gold and 900 000 oz of silver over its 14-year mine life, producing an average of 150 000 oz/y of gold at an all-in sustaining cost (AISC) of $801/oz.
In its first six years of production, the mine will deliver an average of 183 000 oz/y at an AISC of $707/oz.
The PFS is based on a 20 000 t/d milling rate to process the delineated proven and probable reserves of 2.3-million ounces of gold and 2.2-million ounces of silver, as a standalone openpit operation for 14 years. The proposed mine is expected to be owner-operated using a conventional openpit mining method to produce a total of 96-million tonnes of ore with an average diluted gold grade of 0.88 g/t for the first six years and 0.76 g/t for the life-of-mine.
The mine will require an initial capital outlay of C$607-million, Spanish Mountain said on Tuesday.
The PFS calculated an aftertax net present value, using a 5% discount, of C$655-million, an internal rate of return of 22% and a payback of construction capital in 3.3 years.
CEO Larry Yau stated that the PFS had identified several targets for project optimisation and that the technical team had already started investigating these opportunities.
“The PFS represents a significant project milestone and bears the fruits of our de-risking initiatives in the past five years,” he added.