A preliminary economic assessment for Eros Resources Corp.'s Bell Mountain gold project in Nevada pegged a posttax net present value of US$9.3 million at a discount rate of 5%, a 24.7% internal rate of return and a 2.7-year payback period.
The project is expected to produce 60,056 ounces of gold and 408,498 ounces of silver over a four-year mine life, with cash costs of US$759 per ounce. Pre-production capital cost is estimated at US$18.5 million, including a US$1.7 million contingency.
The PEA, which used a base-case gold price of US$1,300 per ounce and a silver price of US$17.50 per ounce, assumed a contractor-operated, conventional open pit mine, with drill and blast rock breakage and truck and loader materials handling. The study also recommends that the project be advanced to a feasibility level for a total estimated cost of about US$1.8 million.
"The restriction placed on Eros to explore and advance the project has prevented us from attempting to expand and upgrade the resource base and further enhance the potential economics of the project," Eros President and CEO Ron Stewart said in a statement, referring to the pending withdrawal of public land by the U.S. Navy to expand a training facility. The land includes the entire Bell Mountain property, and its withdrawal will require ratification by the U.S. Congress, which is expected to make a final decision upon the submission of an environmental impact statement by the U.S. Navy and a recommendation from the Secretary of the Interior.