Monarques Gold Corp. on Feb. 8 posted an updated pre-feasibility study for its Croinor gold project in Quebec, with a 10% increase in proven and probable reserves and a 13% reduction in total costs to US$902/oz of gold, compared to the October 2014 study.
Proven and probable reserves now total 129,292 ounces of gold within 602,994 tonnes grading 6.66 g/t of gold.
The resource estimate used in the study was completed in late 2015, with measured and indicated resources totaling 804,600 tonnes grading 9.12 g/t of gold for 236,000 ounces, using a cutoff of 4 g/t of gold. Inferred resources are estimated at 160,800 tonnes grading 7.42 g/t of gold for 38,400 ounces, which were not considered in the pre-feasibility analysis.
The proposed Croinor mine has a posttax net present value of C$18.3 million, using a 5% discount rate, with a 30% internal rate of return and a 2.2-year payback period. The study incorporates a gold price of US$1,280/oz and an exchange rate of C$1.28 to US$1.
The underground operation is expected to produce an annual average of 31,472 ounces over its 3.6-year mine life, which includes a one-year preproduction period. Average operating costs decreased 16% compared to the previous study, to US$639/oz.
Monarques Gold said ore will be processed at the Beacon mill, which will have excess capacity during Croinor's production period.
Initial CapEx is estimated at C$33.5 million, with sustaining CapEx pegged at C$17.2 million. The study also estimated total gross revenue of C$206.3 million and net cash flow of C$25.2 million.
The company said it plans to undertake further drilling aiming to extend the life of the Croinor mine by increasing resources.
