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Sandstorm Gold reports Hod Maden feasibility results, showing $1.05bn NPV

Sandstorm Gold’s 30%-held Hot Maden gold-copper project in northeastern Turkey’s Artvin province. Credit: Mariana Resources

Sandstorm Gold (NYSE: SAND) (TSX: SSL) has provided a summary of results for a feasibility study (FS) on the Hod Maden project in Turkey, in which the company holds a 30% interest. All figures reported are on a 100% project basis.

Using a 5% discount rate, the FS report puts the Hod Maden project at a post-tax net present value (NPV) of $1.05 billion and an internal rate of return (IRR) of 36%.

The all-in sustaining cost (AISC) for gold, with copper as a byproduct credit, is estimated at $334 per ounce. On a co-product basis, the AISC is measured at $595 per ounce. Upfront capital costs for the project is $309 million.

The Hod Maden project has proven and probable mineral reserves of 2.45 million ounces of gold and 287 million pounds of copper. The study shows a 13-year mine capable of producing approximately 195,000 gold-equivalent ounces annually, at an average head grade of 11.1 g/t AuEq.

The FS contemplates Hod Maden as an underground mine divided into two distinct mining zones. A modified drift and fill (DAF) technique will be used at the upper mine area, while a long hole stoping (LHS) technique will be applied to the lower mine area, where the bulk of the mineralization is located.

The mine capacity is 800,000 tonnes per annum with a total of 8.7 million tonnes of ore produced during the 13-year mine life.

The ore to be processed is classified into two main categories: regular ore and a pyrite ore with a flowsheet reconfiguration when processing pyrite ore to maximize gold recovery. The copper and pyrite concentrates are to be transported to a port located on the Black Sea in Turkey for shipment to smelting facilities.

“The release of the Hod Maden feasibility study is a major turning point for not only the project, but for Sandstorm as well,” Nolan Watson, Sandstorm’s CEO said in a news release.

“When we purchased the stake in Hod Maden back in 2017, we knew that it would be a major growth catalyst for Sandstorm, and the positive results of this study spell out just how transformational it will be once in production,” he added.

With the release of the FS, the Hod Maden project now moves into the next stage of development. According to Sandstorm, the project’s operator has begun the application process for the forestry permit after receiving the final approval of the Environmental Impact Assessment (EIA) earlier this month.

Production from Hod Maden is currently expected in the second half of 2024, the company said.

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