Leagold Mining Corp. (LMC:TSX.V; LMCNF:OTCQX) announced in a news release that a "very positive," independent feasibility study for its Los Filos mine expansion is finished. The mine is located in Mexico.
The study results and NI 43-101 technical report are based on $30 million of exploration work on both of the open-pit and underground deposits over 20 months' time. The characteristics of the resource used in the study are Proven and Probable mineral reserves of 111.3 million tons at 1.23 grams per ton containing 4.5 million ounces (4.5 Moz) gold. This is an increase from 1.7 Moz in 2017.
"The expansion feasibility study incorporates the potential for: development of the Bermejal underground mine, enlarging the Los Filos open-pit mine, rephasing of the Bermejal open pit into two distinct open pits (Bermejal and Guadalupe) and the construction of a carbon-in-leach (CIL) processing facility to complement the existing heap-leach facilities," according to the release.
The feasibility study outlines total gold production of 3.3 Moz over a 10-year mine life (2019 to 2028) at an average all-in sustaining cost (AISC) of $795 per ounce. Beginning in 2021, following the expansion, average annual production should nearly double the current rate, at 350,000 ounces (350 Koz) at an AISC of $759 per ounce. Between 2021 and 2023, it should exceed 400 Koz. Leagold intends to conduct further exploration at Los Filos to increase the amount of reserves and extend the mine life.
Capex of $180 million will be required to develop the Bermejal underground and build a CIL plant and the necessary infrastructure. Funding of stripping during the first expansion phase, between 2019 and 2020, at the Los Filos and Guadalupe open pits will come from current operations, the company stated.
Projected economics at a $1,250 per ounce gold price are a $752 million net present value, an 87% internal rate of return and a less than one-year period for return of initial capex.
The next steps for Leagold are to incorporate the study results into its "corporate business model for planning and corporate financing purposes," noted the release, and prepare a Los Filos expansion development plan.
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