RE: Quick payback for Seafield Quick payback for Seafield on Colombian gold mining project
Seafield Resources crunches the numbers on its Miraflores gold project and gets a two-year payback on a 4,000 tpd gold mine.
Author: Kip Keen
Posted: Monday , 23 Apr 2012
HALIFAX, NS (MINEWEB) -
Seafield Resources (TSX-V: SFF) projected strong profits in a 4,000-tonne-per-day mining scenario of its Miraflores gold project in Colombia.
In its first scoping study of Miraflores released on Monday, Seafield highlighted a $249-million net present value (NPV), at an eight-percent discount rate, and a 50-percent internal rate of return (IRR), assuming a $1,500 per ounce gold price over the long term.
At a more conservative $1,300 per ounce gold, Miraflores still gave a $166 million NPV and a 38 percent IRR.
The strong economic projections suggested Seafield could recoup estimated capital costs - pegged around $94 million - within about two years.
The quick payback owed much to estimates of mining costs. In all Seafield said average cash costs over the first eight years of a 14-year mine life would be $524 per ounce gold, not including 6.4 percent production royalties and refinery charges. Life of mine cash costs were estimated at $594.5 per ounce gold.
To bring stronger potential mine profits forward in the study, Seafield proposed to focus on higher grade material in the Miraflores deposit in the earlier years of mining.
The Miraflores project is to be a combination of underground and open pit mining and, as Seafield would have it, lower grade ore grading between 0.3 g/t and 0.6 g/t gold would be stockpiled during the first eight years of production.
Over that period, which would account for the bulk of gold production at Miraflores, Seafield would mill 7 million tonnes @ 1.38 g/t gold via open pit and 5 million tonnes @ 2.27 g/t gold from underground.
Then over last six years of the 14-year mine life Seafield would by and large process the lower grade ore, some eight million tonnes @ 0.43 g/t gold.
In total Seafield said it would produce 709,349 ounces gold, life of mine, and 71,007 ounces gold a year during main eight-year mining phase.
SRK Consulting put the scoping study together for Seafield.