GoGold Resources (TSX: V.GGD, Stock Forum) had much to celebrate today as the company announced results from its initial Preliminary Economic Assessment (“PEA”) for its wholly-owned Santa Gertrudis gold mine located in Sonora State, Mexico.
According to the news release, the PEA, carried out by P&E Mining Consultants of Brampton, Ontario, confirmed that the company could potentially develop a low-cost open-pit heap leach mine in Sonora that, with a gold price of US$1,250 per ounce, Santa Gertrudis had an estimated US$232.0 million after-tax net cash flow.
The report also stated that the mine had an after-tax NPV of US$150 million at a 5% discount rate and an after-tax internal rate of return (IRR) of 58% with an initial capital expenditure of US$32.0 million for construction and mine preparation.
It also went on to note a considerable increase to the Indicated mineral resource estimate by 200,000 ounces of gold and an increase to the Inferred mineral estimate, originally published on June 17, 2014, by over 113,000 ounces of gold.
Company President and CEO, Terry Coughlan, commented on the assessment results, “We are extremely pleased with the results of the initial PEA study for Santa Gertrudis.”
He went on to illustrate, “The large increase in gold ounces along with the robust economic opportunity to develop our second low cost producing mine in Mexico, substantiates the reasons why the company was so eager to secure this gold project for our shareholders. The PEA report shows an initial NPV of US$150 million, and has the potential for exploration upside and additional gold ounces through targeted exploration.”
Then he concluded, “Our strategy, as it was with our initial low cost producing Parral Mine that went from grass roots to production in under twenty four months, is to fast track this second project, the Santa Gertrudis gold mine into production.”
GoGold was in the news recently when the Halifax Nova Scotia-based company provided an update on the Parral Mine commissioning a day ago.
Shares gained 4.26% on the news to $1.47 per share.
Currently there are 147.8m outstanding shares with a market cap of $217.3 million.