An updated preliminary economic assessment for 's gold projectin Mexico, pegged an after-tax net present value of UC$89.9 million, discountedat 5%, and internal rate of return of 50% and 6.5-year mine life.
The company said April 29 that the project will require aninitial CapEx of US$42.6 million including US$7.3 million for contingencies whilelife-of-mine sustaining capital is estimated to be US$42.2 million.
On average, the project will produce more than 80,000 goldequivalent ounces per annum at overall gold grade of 0.32 g/t and silver gradeof 10.6 g/t.
The project is expected to produce 488,000 ounces of goldand 3.8 million ounces of silver from the indicated mineral resource.
The study uses US$1,200 per ounce gold and US$15 per ouncesilver prices.
Meanwhile, the Mexican environmental authority SEMARNAT hasgranted approval on the San Agustin environmental impact study, the companynoted.
In addition, the company has entered into a three-year US$30million revolving credit facility that will initially bear interest of LIBORplus 2.50% and subsequently on a sliding scale between 2.25% to 3.25%.
Bank of Montreal acted as lead arranger, bookrunner and theadministrative agent for the facility while The Bank of Nova Scotia alsoparticipated as a lender.
The company plans to use the proceeds for general corporatepurposes and future project development, potentially including the San Agustingold project.