Algold Resources Ltd.'s preliminary economic assessment for the Tijirit gold project in Mauritania pegged a posttax net present value, discounted at 8%, of US$69.0 million, a 23.5% internal rate of return and a 1.8-year payback period.
At a gold price of US$1,250/oz, the National Instrument 43-101-compliant study estimated revenue of US$717.4 million over a 7.1-year mine life.
The preproduction direct capital cost is estimated at US$96.4 million, with an indirect cost of US$31.2 million and a contingency allowance of US$17.9 million, according to a May 22 release.
Total sustaining and expansion CapEx is expected at US$47.1 million over the mine life, including the phase-two expansion in the fourth year.
In the first phase, spanning the first four years, the project will produce an average 104,500 ounces of gold per year, which will drop to 53,000 ounces in the second phase.
The average cash cost is pegged at US$475/oz during the first phase and US$893/oz during the second phase.
"The PEA supports the concept of an open pit mining scenario, which could see the Tijirit project produce over 550,000 ounces of gold over a seven-year mine life, at a cash cost below US$500/oz during the first four years," Chairman and CEO Benoit La Salle said.
The Tijirit project hosts measured and indicated resources of 3.2 million tonnes at 1.64 g/t of gold for 169,450 ounces and inferred resources of 10.5 million tonnes grading 1.92 g/t of gold for 648,790 ounces.
