Esperanza Silver’s (EPZ-V, ESPZF-O) 100%-owned Cerro Jumil project, an advanced open-pit heap-leach gold project south of Cuernavaca in Mexico’s Morelos state, should yield a pretax net present value (NPV) of about US$46.7 million and an internal rate of return (IRR) of about 19.5% using a 5% discount rate and a base case of US$800 per oz. gold, the company says.
According to a scoping study of the bulk tonnage, skarn gold deposit, those figures would rise to a US$76.7 million (NPV) and 28.4% (IRR) at US$900 per oz. and to US$91.7 million (NPV) and 32.8% (IRR) if US$950-per-oz. gold were used in the calculation.
Cash costs per ounce were calculated to be about US$418, with average annual gold production of about 52,000 oz. gold. The life of mine is forecast at about 7.6 years. Overall gold recovery will be in the neighbourhood of 68%. The project is also responsible for a net smelter return royalty of 3%.
The base case incorporates the use of company-owned mining equipment for all open-pit mining operations. The process design calls for two-stage crushing of run-of- mine ore to a nominal size of less than 2 inches.
New infill and exploration drilling is planned for the fourth quarter of this year to increase the resource base.
Cerro Jumil has a measured and indicated resource of 23.2 million tonnes grading 0.85 gram gold per tonne and 0.6 gram silver, for contained gold and silver of 636,000 oz. and 479,000 oz., respectively.
In the inferred category, the deposit has an estimated 15.8 million tonnes grading 0.74 gram gold and 11.9 grams silver, for contained gold and silver of 378,000 oz. and 6.07 million oz., respectively.
In addition to Cerro Jumil, Esperanza has the San Luis gold and silver joint venture in Peru and is exploring prospects in both countries.
At presstime, Esperanza was trading at $1.05 per share. The company has gone up from a 52- week low of 31¢ a share last October to $1.09 this September.
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