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Highland's definitive feasibility study pegs US$311M value for Kekura project

Highland Gold Mining Ltd.'s definitive feasibility study for the Kekura project in Russia pegged a net present value, discounted at 10%, of US$311 million and an internal rate of return of 38%.

The mining plan, based on a gold price of US$1,250 per ounce, comprises open-pit mining for the first four years, and combined open-pit and underground operations starting from year five of the 16-year mine life.

The capital costs for the project are expected at US$229 million, according to the Feb. 6 release.

The project's average annual gold production is estimated at 172,000 ounces for the first eight years and 46,000 ounces for the final eight years.

Total life of mine production is expected at 1.7 million ounces at an average total cash cost of US$511 per ounce and all-in sustaining costs of US$541 per ounce.

The ore reserves estimate for Kekura was updated to 8.9 million tonnes at 7.03 g/t gold for 2 million contained ounces, compared to the previous estimate of 1.7 million contained ounces at 10.7 g/t gold.

The mineral resource stands at 9.5 million tonnes at 8.1 g/t gold for 2.45 million contained ounces.

According to the release, preliminary construction work is already underway at Kekura, with pre-commissioning scheduled for late 2020 or early 2021 and ramp-up to full production in the second half of 2021.