(Kitco News) - On Thursday, Moneta Gold (TSX: ME) announced positive results from a preliminary economic assessment (PEA) for the company's 100% owned Tower Gold project in Timmins, Ontario.
The company said that the PEA demonstrates the potential to develop a low-cost 19,200 tpd combined open pit and underground mining operation with strong economics and the opportunity for significant benefit to the Indigenous Nations, local stakeholders, and the company.
According to a press-release, the PEA demonstrates robust economics with C$1,459 million pre-tax NPV at a 5% discount rate, C$1,066 million after-tax, and 38.9% pre-tax IRR, 31.7% after-tax; at US$1,600/oz gold and exchange rate of US$0.78/C$. The project's after-tax pay-back is 2.6 years and profitability index (NPV/initial capital) is 2.1.
The project's PEA assumes mine life of 24 years, with average annual gold production of 261,014 oz in years 1 to 11 (192,666 oz for LOM) for 4,581,000 ounces total gold production LOM. Peak annual gold production is 368,622 ounces. The project's cash cost is US$910 per ounce and all-in sustaining cost is US$1,073 per ounce gold.
President and CEO Gary O'Connor stated, "We're very pleased with the results of this PEA, which has outlined a strong base-case for a significant and highly profitable new gold mine in Ontario. Our robust base case at US$1,600 per ounce gold price for the project supports a 24-year mine life with average annual production of 261,014 ounces of gold for the first 11 years with an after-tax NPV of C$1,066 million and IRR of 31.7%, with very attractive cash costs and AISC, low CAPEX and low capital intensity.
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"This PEA confirms the potential for a robust gold project with compelling project economics and represents an important interim update on the progress of our work program at Tower Gold. In 2022, we will continue to focus on in-fill and definition drilling to better define resources and improve the economics of the resource through increasing grades and lowering strip ratios, while also identifying new targets."
Moneta is a Canadian-based gold exploration company focused on advancing its 100% wholly owned Tower Gold project, located in the Timmins region of Northeastern Ontario, Canada's most prolific gold producing camp. Tower Gold hosts an estimated gold mineral resource of 4.5 Moz indicated and 8.3 Moz inferred.
