Moneta delivers positive PEA for Tower gold project, showing $1B after-tax NPV

Moneta Gold (TSX: ME; OTC: MEAUF) has released positive results from a preliminary economic assessment (PEA) for its wholly owned Tower gold project in Timmins, Ont., that demonstrates the viability to develop a combined open pit and underground operation with strong economics.

As outlined in the PEA, Tower is a low-capital intensity project with initial costs of $517 million for a 7-million-tonne-per-year processing plant, including mine preproduction and infrastructure (roads, power line and substation, tailings storage facility, ancillary buildings and site water management structures). Its sustaining capital is estimated at $886 million.

The project’s after-tax net present value, based on a 5% discount rate and a US$1,600 per oz. base case spot gold price, is $1.1 billion, with an internal rate of return of 31.7%. The after-tax payback period is 2.6 years. Cumulative cash flow generated by the project is $1.9 billion after taxes.

Drill core showing visible gold. Credit: Moneta Gold

Over a mine life of 24 years, the Tower mine would have average annual production of over 190,000 oz., including about 260,000 oz. annually in the first 11 years, for 4.6 million oz. of total gold production. Peak annual gold production could reach just under 370,000 oz.

Commenting on the PEA results, Moneta’s president and CEO Gary O’Connor said the company was pleased with the results of study, which “outlined a strong base-case for a significant and highly profitable new gold mine” in Ontario.

The next step for the company is to begin a prefeasibility study on Tower. An environmental impact study has also been recommended in the PEA.

In addition to releasing the PEA results, Moneta provided an updated resource estimate for the Tower project (open pit and underground), which now contains 4.5 million oz. of indicated gold (150.6 million tonnes grading 0.92 gram gold per tonne) and 8.29 million oz. of inferred gold (235.6 million tonnes grading 1.09 grams gold).

During the remainder of 2022, O’Connor said the company will continue to focus on infill and definition drilling to better define resources and improve the economics of the resource through increasing grades and lowering strip ratios, while also identifying new targets.

Moneta recently completed an oversubscribed private placement totalling $15.4 million to fund its exploration activities on the Tower gold property.