Gold Reserve Inc.'s preliminary economic assessment of its 45%-owned Siembra Minera gold-copper project in southeast Venezuela pegged a posttax net present value, discounted at 10%, of US$3.93 billion, a 31.1% internal rate of return and a 4.1-year capital payback.

The project is expected to be a conventional truck and shovel open pit mining operation, comprising a smaller 15,000-tonne-per-day cyanidation plant and a larger 140,000 tpd flotation plant.

The small plant will recover gold from oxide saprolite and sulfide saprolite that contains low concentrations of copper, while the large plant will process hard rock material containing higher concentrations of copper and gold.

The initial capital cost is estimated at US$2.6 billion, for a total life of mine capital of US$4.7 billion. All-in sustaining costs are estimated at US$483 per ounce.

Production is expected to begin about two years after the completion of the construction of the small plant, according to the May 19 release.

Average annual production from the project, from year three to 18 of operations, is expected at 1.23 million ounces of gold and 77 million pounds of copper.

The overall mine life is estimated to be 45 years after achieving commercial production of the large plant.

The company anticipates average life-of-mine sales of 836,000 ounces of gold, 369,000 ounces of silver and 71 million pounds of copper per year.

Gold Reserve will now start the detail design work for the small plant for fast-track development and production. A feasibility study on the large plant is also planned.

The company is planning a drilling program for 2018 to support the overall project development activities, water management wells and test areas with additional resource potential.

The Bolivarian Republic of Venezuela owns a 55% stake in the Siembra Minera project.