Serabi Gold PLC said a preliminary economic assessment of its Coringa gold project in Para, Brazil, supports the development of an underground mining operation.
The company's board will assess financing options and complete permitting and licensing processes required for the development. The company said construction could start at the end of the second quarter of 2020, with initial gold production anticipated about nine months later.
The preliminary economic assessment outlined an after-tax net present value of US$30.7 million, discounted at 10%, and a 31% internal rate of return. The base case in the study used a gold price of US$1,275 per ounce.
Initial capital expenditures were estimated at US$24.7 million, with sustaining capex of US$9.2 million, according to a Sept. 6 news release. The analysis also outlined average gross revenue of US$43.4 million, with annual free cash flow expected to average US$11.5 million.
Coringa is expected to produce an average 38,000 ounces per year for the first five years of a nine-year operation, with all-in sustaining costs of US$852/oz over the life of the mine.
The study incorporated an updated resource estimate. Indicated resources contain 195,000 ounces of gold within 735,000 tonnes grading 8.24 g/t, while inferred resources contain 346,000 ounces of gold within 1.6 million tonnes grading 6.54 g/t, using a cutoff grade of 6.0 g/t.
The estimate is an update to one completed in March, which used a cutoff of 2.0 g/t and outlined 216,000 ounces in the indicated category and 298,000 ounces contained in inferred resources. The new estimate incorporated updated and additional drill results as well as data from re-logging and re-sampling of historical drilling material, according to the company.
