Seabridge Gold Inc. (SEA:TSX; SA:NYSE.MKT) announced in a news release that its newly updated preliminary economic assessment (PEA) on its KSM project in British Columbia shows improved economics and decreased economic impact.
"The new technical report gives investors a compelling view of the project's potential," Chairman and CEO Rudi Fronk said in the release.
The new PEA calculates total production at KSM over an estimated 44-year mine life to be 27.6 million ounces (27.6 Moz) of gold and 17 billion pounds of copper.
The new projected after-tax internal rate of return is 14%, a 40% increase over the 10% in the 2016 PEA. Similarly, the new post-tax net present value at a 5% discount is $6 billion, 80% higher than the $3.4 billion in the previous report. Also, the after-tax payback on $5.2 billion of initial capital is now 4 years, having dropped from 6.4.
As for costs, the total life-of-mine cost, accounting for all project capital and byproduct credits, is an estimated $4 per gold ounce produced, dramatically lower than the previous $358.
Regarding the forecasted environmental impacts of KSM, the updated PEA, compared to the previous version, decreases mine waste rock by 57% and greenhouse gas emissions by 33%.
All of these changes result from including the recently expanded, higher grade Iron Cap deposit in the new mine plans and incorporating it at an early stage. This scenario does not affect the current preliminary feasibility study, "which remains in effect and will be included with the 2020 PEA in an updated NI 43-101 Technical Report to be filed on SEDAR within 45 days," the company stated.
Additionally, because the PEA is based on Iron Cap's Inferred resource estimate, the company indicated that it is highly likely the resource will be upgraded with further drilling, offering further project upside. The new PEA indicates that production at KSM based on the current Inferred resource is an estimated 20.8 Moz of gold and 13.8 Mlb of copper.
"These PEA economic projections, if achieved, would rank KSM among the best large scale producing mines in the world," added Fronk.
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