Investors pile into Colombia-focused Vancouver gold junior
Shares in Batero Gold (CVE:BAT) jumped as much as 8% in ten times usual volumes on Friday after releasing a PEA for its Colombian project earlier this week.
In early afternoon trade the Vancouver-based explorer fell back slightly from highs earlier in the day to trade at $0.125, up 4.2% with more than 615,000 shares changing hands including one 250,000 block at $0.13
That compares to usual volumes of below 50,000 and made Batero Gold the tenth most traded stock on the Toronto venture exchange.
It has been a busy week for Batero, kicking off on Monday with the Preliminary Economic Assessment (PEA) of its 100%-owned Batero-Quinchia project in Riseralda, Colombia, announcing board movements and also changing pricing of warrants issued two years ago.
What makes Batero-Quinchia a particularly attractive asset according to the PEA is the "relatively high gold recoveries and fast leach kinetics of the surface oxide mineralization within the Batero-Quinchia deposit."
Highlights of the PEA include with a base case gold price of $1,400 an ounce include:
- Mine life of seven years at 3.5 million tonnes per annum production steady state (10,000 tonnes per day).
- Life-of-Mine (LoM) gold production of 390,000 ounces of gold and 817,000 ounces of silver recovered.
- Annual average production of 56,000 ounces of gold and 117,000 ounces of silver recovered.
- Total open pit production which has been factored for mining extraction and mining dilution:
- 9.4 Mt of Measured Mineral Resources at 0.81 g/t Au and 1.8 g/t Ag for 244,000 ounces of contained gold and 545,000 ounces of contained silver,
- 11.0 Mt of Indicated Mineral Resources at 0.77 g/t Au and 2.0 g/t Ag for 273,000 ounces of contained gold and 720,000 ounces of contained silver,
- 3.3 Mt of Inferred Mineral Resources at 0.59 g/t Au and 1.6 g/t Ag for 64,000 ounces of contained gold and 171,000 ounces of contained silver.
- Approximately 86% of open pit production tonnage is classified as Measured or Indicated Mineral Resources.
- Mining strip ratio of 0.3:1 (waste: production).
- LoM average gold and silver heap leach recoveries of 67% and 57% respectively.
- Initial capital cost of $97.3 million, which includes $16.2 million in contingency costs.
- Pre-tax payback of 23 months.
- Net pre-tax cashflow of $105.0 million.
- Pre-tax Internal Rate of Return (IRR) of 27%.
- Pre-tax Net Present Value (NPV) at a 5% discount rate of $69.1 million.
- Total cash operating cost (net of silver credits) of $842 per ounce gold.
- After-tax payback of 30 months.
- Net after-tax cashflow of $76.9 million.
- After-tax IRR of 21%.
- After-tax NPV at a 5% discount rate of $47.3 million.
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Image by Batero Gold.