In an announcement published July 10, Liberty Gold Corp. (LGD:TSX) set forth details of its preliminary economic assessment (PEA) for the Goldstrike oxide gold property in Utah's Great Basin region. In its press release, the company stated, "The PEA confirms a low capital intensity, low operating cost, open-pit, run-of-mine, heap-leach operation, with a 7.5 year mine life and highly attractive economics."
Highlights of the PEA included:
- After-tax net present value at a 5% discount rate (NPV5%) and internal rate of return (IRR) of $129.5 million and 29.4% respectively, with a 2.3-year payback of initial capital (pre-tax NPV5% and IRR of $176.2 million and 34.8% respectively)
- Mine life of 7.5 years with a two-year preproduction period
- Life of mine (LOM) head grade of 0.48 g/t gold
- Total amount of gold recovered estimated at 713,000 ounces (oz)
- Average annual gold production of approximately 95,000 oz
- LOM direct operating cash cost is estimated at $642/oz of gold recovered
- All-in sustaining cost or AISC is estimated at $793/oz of gold recovered
- Pre-production capital cost estimated at $113.2 million, using an owner-operator approach
- LOM sustaining capital costs estimated at $61.6 million, plus $20.0 million for closure costs
All figures are based on an assumed gold price of $1,300 per ounce.
Commenting on the PEA for the Goldstrike property, company president and CEO Cal Everett stated, "This positive PEA marks a solid milestone for the Goldstrike project and for Liberty Gold." He noted the geometry of the project is "backed up by over 1,700 drill holes with 75% of the resource in the indicated category," and expressed confidence in "the metallurgical assumptions, as they are consistent with historical recoveries obtained from 209,000 ounces of historical production between 1988 and 1994."
In addition, Everett noted that "potential benefits from by-product silver production or from processing residual gold remaining in the historical heap leach pads" are not accounted for the in PEA.
In addition to demonstrating the potential economic viability of the Goldstrike property in terms of gold recovery, Liberty Gold asserted that based on historic mining operations at the site, "the Company believes there is potential for significant silver revenues from a future operation. . .Liberty Gold intends to pursue a silver resource study to quantify a silver resource, as well as a review of metallurgical test data to estimate silver recoveries that could be expected at the Goldstrike Project."
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1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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