There are three options here all of which will be cash cows extraordinaire .
y.
The 2022 FS replaces the previously reported Preliminary Economic Assessment ("PEA") as presented in the Technical Report filed on SEDAR in October 2021 as the current technical report for the La India project.
The strategic study covers two scenarios: Scenario A, in which the mining is undertaken from four open pits, termed La India, America, Mestiza and Central Breccia Zone ("CBZ"), which targets a plant feed rate of 1.225 million tonnes per annum ("Mtpa");
The 2021 PEA Scenario A presented a post-tax, post upfront capital expenditure NPV of US$302 million, with an IRR of 58% and 12 month pay-back period, assuming a US$1,700 per oz gold price, with average annual production of approximately 120,000 oz gold per annum for the initial 6 years of gold production.
So Scenario A in C$ is valued at $390 million
The 2021 PEA Scenario B presented a post-tax, post upfront capital expenditure NPV of US$418 million, with an IRR of 54% and 12 month pay-back period, assuming a US$1,700 per oz gold price, with average annual production of 150,000 oz gold per annum for the initial 9 years of gold production.
So, Scenario B is valued at $535 m in C$.
At $1900 POG, Scenario A would be above $500 m and Scenario B over $700 million.
Scenario C is the fall back option.
They have purchased a fully operatiinal SAG mill capable of 1200 tons per day which is about 400,000 tons per year .
This would produce about 50,000 ounces per year .
CXB had excess milling capacity of 1200 tons per day which can be used to toll mill 50,000 ounces per year for many many years.
Such high grades would have a AISC less than $700 usd per ounce at $1700;POG which is about $1000 usd per ounce in operating earnings per year and equivalent to about $50 million USD in operating earnings or about $0.35 per share in earnings .
So, one would expect that CXB which is already mining gold in Nicaragua is the front runner but the competition will be fierce .
Thats why I foresee $250 m USD which is $329 m CAD as the base takeover price..