A definitive feasibility study for Big River Gold Ltd.'s Borborema gold project in northeastern Brazil outlined a posttax net present value, discounted at 8%, of US$203 million and a 41.8% internal rate of return.

A 2.0 million-tonne-per-annum operation at the project will require capital cost of US$99.3 million, including a US$11.4 million contingency. The payback is expected in 2.4 years.

Borborema will produce an average 71,250 ounces of gold per annum from a single open pit during an initial, stage-one life of mine of 10.2 years, at all-in sustaining costs of US$839 per ounce.

At an assumed gold price of US$1,400/oz, the project is estimated to generate life of mine revenue of US$1.02 billion, EBITDA of US$527.3 million and an after-tax free cash flow of US$328.3 million.

The project requires funding of US$118 million to commence production, and the company said Dec. 19 that it will immediately kick off discussions with several financial institutions that have expressed interest in providing project finance.

Project construction is expected to take 23 months, subject to the conclusion of financing arrangements.

Big River received all major permits needed to start construction at the Borborema project in April.