(Kitco News) - Yesterday, O3 Mining (TSX.V: OIII) announced the completion of the pre-feasibility study (PFS) for its 100% owned Marban Engineering gold project, located in the mining region of Val-d'Or in Québec, Canada.
The company said that the PFS delivered robust project economics, with post-tax net present value (NPV) (discount rate 5%) of C$463 million and post-tax unlevered internal rate of return (IRR) of 23.2% using a long-term gold price of US$1,700 per ounce and an exchange rate of C$1.00 = US$0.77.
O3 Mining added that annual average production increased from 115,000 oz Au in the preliminary economic assessment (PEA) to 161,000 oz Au supported by a 50% increase in mill throughput, 15% increase in peak mine rate, lower cut-off grade of 0.30 g/t Au compared to 0.35 g/t Au in the PEA, lower strip ratio of 5.1 and increased mill gold recovery.
The project’s initial CAPEX is C$435 million including mine preproduction, processing, and infrastructure (roads, power distribution, tailings facility, ancillary buildings, and water management).
All-in-sustaining cost (AISC) is US$882 per ounce, a post-tax payback is 3.5 years, with C$1,971 million EBITDA and C$760 million post-tax free cash flow over the life of mine.
President and CEO Jose Vizquerra stated, "We are pleased with the results of our PFS for the Marban Engineering project which demonstrates the potential to be the next gold producer in the Abitibi region in Val-d'Or, Quebec, the next step in delivering on our promise to be in production by 2026. With robust economics, Marban has shown itself to be a profitable standalone project.
“We believe the opportunity to grow Marban remains high, with many mineralized zones not included in the Mineral Resource Estimate, which could add to the LOM, and further improve Marban's economics.”
Importantly, O3 said that work on the feasibility-level studies has begun which the company expects to complete in 2023.
O3 Mining, an Osisko Group company, is a gold explorer and mine developer on the road to produce from its prospective gold camps in Québec, Canada. O3 Mining grows towards being a gold producer with several multi-million-ounce deposits in Québec.
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