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Geologix: Tepal PEA defines posttax NPV of US$169M, IRR of 24%

An independent preliminary economic assessment for Geologix Explorations Inc.'s Tepal gold-copper project in Mexico estimated an after-tax net present value of US$169 million, at a 5% discount rate, and an internal rate of return of 24%.

The project will require initial CapEx of US$214.2 million to establish an open-pit contract mining operation that produces an average 78,572 ounces of gold and 31.6 million pounds of copper over a 10-year mine life.

The major part of the initial CapEx will be spent on the sulfide and oxide processing plants as well as surface infrastructure, the company said Jan. 19.

To produce gold and silver dores, mined sulfides will be processed through a 22,000-tonne-per-day flotation concentrate circuit combined with a secondary carbon-in-leach, or CIL, circuit. Oxides will be processed via a separate 5,500 tpd CIL circuit.

Life-of-mine average cash cost will come in at US$313 per ounce of gold, while sustaining cost will be US$396 per ounce. Meanwhile, life-of-mine sustaining and closure CapEx is estimated at US$87 million

The payback for initial investment will be 2.3 years, and construction will take two years.

The study assumes a base-case metal price of US$1,250 per gold ounce, US$2.50 per copper pound and US$18.00 per silver ounce.

The assessment considered measured and indicated mineral resources of 1.8 million ounces of gold and 813 million pounds of copper, contained within 187.8 million tonnes of ore.

The study also included an inferred mineral resource estimate of 182,000 ounces of gold and 120 million pounds of copper contained within 35.7 million tonnes grading. The estimate was dated March 2012.