McEwen Mining Inc. said Feb. 15 that an updated feasibility study for the Gold Bar mine in Nevada estimated a post-tax net present value, discounted at 5%, of US$54 million, an internal rate of return of 23% and a payback period of 3.1 years, based on a gold price of US$1,250 per ounce.
Using a gold price of US$1,350 per ounce, however, increases the NPV, discounted at 5%, to US$87 million and IRR to 32%. Payback period is 2.5 years.
The study was based on an updated ore reserve of 397,700 ounces contained in 16.5 million tons grading 1.0 g/t in the proven and probable categories, and an updated resource estimate of 629,000 ounces of gold contained in 22.8 million tons grading 0.95 g/t in the measured and indicated categories.
The original 2015 study for the project estimated an NPV, at a 5% discount rate, of US$30 million, an internal rate of return of 20% and a payback period of three years.
Initial CapEx required for the open pit operation is pegged at US$80.8 million, including US$4.6 million for contingency.
Gold production over the seven-year mine life is estimated at 397,700 ounces, higher than the previous plan's 325,400 ounces, at an average cash cost of US$770 per ounce due to an improved mine plan to increase mineable reserves, as well as an increased heap leach recovery.
In November 2017, the company said it will begin construction of its Gold Bar mine immediately, after receiving a signed record of decision on the final environmental impact assessment for the project.