Spanish Mountain releases PEA for phase one
Vancouver-based Spanish Mountain Gold has completed the preliminary economic assessment for the first phase of work at its Spanish Mountain gold project 70 km northeast of Williams Lake, British Columbia.
The PEA proposes mining the central higher grade portion of the deposit using open pit methods to recover near surface resources. The mill will have a throughput of 10,000 t/d. It will employ three-stage crushing, ball milling and flotation followed by fine grinding and cyanidation to recover approximately 91% of the gold.
Using a gold price of $1,275 per oz., the Spanish Mountain mine has a post-tax net present value at a 5% discount of C$325 million and an internal rate of return of 21%. The pre-production capex requirement is C$364 million, including contingency, and that will be paid back over 3.5 years.
The pit delineated resources contain 4.1 million oz. of gold and 6.2 million oz. of silver in the measured and indicated category. Or 273.2 million tonnes grading 0.47 g/t gold and 0.71 g/t silver. The inferred resource is 52.5 million tonnes at 0.37 g/t gold and 0.67 g/t silver. Over a mine life of over a decade, The mine is expected to have an all-in sustainable cost per gold ounce produced of $549.
Spanish Mountain likes the outlook of the phase one PEA, but it will consider a scenario with expansion.
(This article first appeared in the Canadian Mining Journal)