Aris Mining rises on updated prefeasibility for Marmato expansion in Colombia

Aris Mining (TSX: ARIS; US-OTC: TPRFF) has released an updated prefeasibility study for an expansion of its Marmato gold mine, which includes a boost to resources and reserves since the last study dated March 2020.

Aris operates the Marmato mine located in Colombia’s Caldas Department, roughly 80 km south of Medellin. This underground operation comprises two mining areas: the upper mine between 1,000-1,300 metres and the lower mine below 1,000 metres. A modernization program is currently in progress, targeting increased production and lower costs at the Marmato upper mine.

The Marmato expansion project includes the development of a new underground mine and 4,000-tonne-per-day processing facility to add to the current 1,250-tonne-per-day upper mine. About 3 million oz. gold have been recovered so far. The deposit remains open at depth and along strike, and has a high expansion potential from future underground drilling programs.

The construction capital is estimated at US$280 million, and the project economics are inclusive of the stream financing from Wheaton Precious Metals, (TSX: WPM; NYSE: WPM) which has made upfront deposits of US$53 million and will make another US$122 million during construction to purchase metals at reduced prices.

“We are very pleased with the results of the 2022 (prefeasibility), which includes an updated Marmato lower mine construction capital estimate of US$280 million that will be partially funded from US$122 million of remaining committed stream financing, for a net construction funding amount of US$158 million,” Neil Woodyer, CEO of Aris Mining, commented.

Using a base case gold price of US$1,600 per oz., the after-tax net present value of the Marmato expansion project comes to US$341 million (at a 5% discount rate), with an internal rate of return of nearly 30%.

The 2022 study incorporates an expanded resource (inclusive of reserves) of 61.5 million tonnes at 3 grams gold per tonne for 6 million oz. of gold in the measured and indicated category. The previous measured and indicated resource was 39.4 million tonnes at 3.2 grams gold for 4.1 million oz. Inferred resources have also increased to 35.6 million tonnes at 2.4 grams gold for 2.8 million oz.

The higher reserve base — now estimated at 3.2 million oz. (2 million oz. previously) — would add another six years to the Marmato mine life to 20 years. “Following construction of the new lower mine and based on the current mineral reserve, the Marmato mine is expected to deliver average production of 162,000 oz. per year over a nearly 20-year mine life at AISC of US$1,0031/oz.,” Woodyer said.

“We are nearing completion of the process to amend the existing environmental permits at Marmato to facilitate the expansion, and we plan to quickly enter the construction phase of the lower mine expansion project,” he added.

Shares of Aris Mining rose 6.2% by 11:40 a.m. in Toronto following the news. The company, previously known as Aris Gold and recently merged with GCM Mining, now has a market capitalization of $439.5 million.