Trek Mining Inc., the merged entity of Luna Gold Corp. and JDL Gold Corp., announced a feasibility study for the restart of its wholly owned Aurizona gold mine in northeastern Brazil pegged a posttax net present value, discounted at 5%, of US$197.1 million and a 33.8% internal rate of return, at a base case gold price of US$1,250 per ounce.
The feasibility study is based on a new mine plan for an open pit gold mine producing about 136,000 ounces per year during the 6.5-year initial mine life for total production of about 886,000 ounces. Luna Gold suspended mining there in February 2015.
The study estimated an initial capital cost of US$130.8 million, with life-of-mine sustaining capital cost of US$51.3 million, and a 2.8-year payback period.
The average life of mine all-in sustaining costs are estimated at US$754 per ounce, according to the July 31 release.
"[The study] supports the viability of a mine restart plan with an upgraded 8,000 tonnes per day crushing and grinding circuit to treat all ore types," Trek said.
The study is based on proven and probable mineral reserves of 19.8 million tonnes at 1.52 g/t gold for 971,000 contained ounces.
Meanwhile, Trek awarded the contract for the engineering, procurement and construction management at the Aurizona project to Ausenco Engineering Canada Inc.
First gold pour is targeted for late 2018.