Newstrike Capital (TSX: V.NES, Stock Forum) spread the good news around today when the company released results from an independent technical report for an NI 43-101 Preliminary Economic Assessment (“PEA”) on its Ana Paula Project located in the Guerrero Gold Belt, Mexico.
According to the news release, the report showed that Ana Paula was a robust, high-margin, rapid payback, 8.2-year open pit mining project with high gold grades and a low strip ratio.
The project also sported excellent access within an established mining jurisdiction.
The PEA, prepared by JDS Energy & Mining, indicated that a base case scenario of $1,300 Au and $20.0 Ag per ounce, Ana Paula had a pre-tax NPV, at a 5% discount, of US$405.3 million and an IRR of 47.5% with a 2.0 year payback.
It also stated that the project would have initial capital costs of $163.9 million and all-in sustaining costs of $567/oz gold or $526/oz gold net of by-product credits.
The project is expected to produce 116,000 ounces gold and 239,000 ounces silver annually over an 8.2 year mine life.
Company President and CEO, Richard Whittall, commented, “This PEA supports our view Ana Paula is one of the best development-stage gold projects in Mexico.”
He then explained, “It is a straightforward open pit mine, utilizing conventional milling and flotation concentration with robust economics. The combination of high gold grades, low capital requirements with low operating costs makes this a compelling development project.”
Then he concluded, “With a positive PEA in hand, our next step is to evaluate the significant underground potential at Ana Paula and to support high priority exploration targets in this prolific gold belt.”
Newstrike Capital was in the news recently when the Vancouver-based company announced completing a report on the newly discovered gold and silver system at Ejutla Project in the middle of August.
Shares gained 8.16% on the news to $1.06 per share.
Currently there are 114.9m outstanding shares with a market cap of $121.8 million.