The Volta Grande project is a significant gold development in Brazil, offering promising metrics. Here are the key highlights: - Largest Undeveloped Gold Project in Brazil: It's positioned as a major future producer in the country.
- Infrastructure: The project benefits from excellent infrastructure.
- Production: Expected to produce 268,000 ounces of gold per year over the first 10 years, with an average grade of 1.38 g/t.
- Life of Mine Gold Production: Estimated total production of 3.53 million ounces.
- Feasibility Study:
- Mineral Reserves: 3.8 million ounces.
- Mineral Resources: Measured and Indicated (M&I) at 5.0 million ounces, with an additional 1.15 million ounces inferred.
- Economic Metrics (at $1,650/oz gold price and $US1
exchange rate): - Post-Tax NPV @ 5%: $1.85 billion.
- Post-Tax IRR: An impressive 85%.
- Capital Payback: Less than 2 years.
- AISC Operating Costs: $779 per ounce of gold.
- CAPEX: $298 million (updated in 2020).
These figures indicate strong economic potential and rapid payback for the Volta Grande project.
To estimate the new Net Present Value (NPV) at a gold price of $2,600/oz (up from $1,650/oz), we'll apply a simplified linear approach. The NPV is directly influenced by the gold price, assuming that all other factors (costs, production rates, etc.) remain the same.
First, let's calculate the percentage increase in the gold price:
Price increase factor=16502600=1.575 This implies a 57.5% increase in the gold price. Since NPV is closely tied to revenue (which is influenced by gold price), we can approximate the new NPV by applying this increase factor to the original NPV.
Original NPV at $1,650/oz = $1.85 billion
New NPV estimate at $2,600/oz:
New NPV=1.85billion×1.575=2.91375billion Estimated NPV at $2,600/oz gold: $2.91 billion