Steppe Gold says updated PEA reveals “great potential" for Tres Cruces project in Peru
Steppe Gold Ltd (TSX:STGO, OTCQX:STPGF) told investors its Tres Cruces oxide gold project in Peru shows great potential as a new production zone for the company as it announced an updated preliminary economic assessment (PEA) for the recently-acquired project.
The company noted that the Tres Cruces deposit contains oxide plus sulphide indicated resources of 2,474,000 ounces with a grade of 1.65 grams per tonne (g/t) gold, inclusive of 630,000 ounces contained within leachable gold oxide mineralization with a grade of 1.28 g/t gold.
Chairman and CEO Bataa Tumur-Ochir commented: “Tres Cruces is strategically located in a highly prospective geological belt that hosts the Lagunas Norte and La Arena mines, both with multi-million ounce gold production.
“Located in the La Libertad, Peru, surrounded by operating mines with the attendant infrastructure and talent pool, this asset shows great potential as a new production zone for Steppe Gold. We are excited with the strong economics confirmed by recent drilling and metallurgical testing, as well as the exploration potential across the license area.”
The technical report revealed a pre-tax net present value (NPV 5%) of $294.3 million and an after-tax NPV 5% of $158 million, with an after-tax internal rate of return of 30.9% and a payback period of 2.1 years.
The calculations were made on an average gold price of $1,700 per ounce.
Life of Mine (LOM) cumulative cash flow was estimated at $235.6 million, with LOM all-in-sustaining costs (AISC) of $734 per ounce.
The LOM operational expenditure estimate is now $297 million, up 3.6% from the March 2022 PEA, with operational expenditure per tonne processed now estimated at $19.93/t.
Pre-production capital expenditure (Capex) amounted to $125.2 million with sustaining Capex for the seven-year LOM at $5.2 million.
Average gold recovery was estimated at 81.7%, with average annual gold production of 68,000 ounces per year, and total LOM gold production of 481,000 ounces.
Despite the cost increases, Steppe Gold said the project’s economics remain robust with significant upside potential.
It said an experienced team continues to systematically advance the oxide project.
Additionally, it noted that significant exploration potential remains with mineralization open at depth.
Source: https://www.proactiveinvestors.com/