A new study for G Mining Ventures’ (TSX: GMIN; US-OTC: GMINF) Oko West gold project in north-central Guyana outlines a net present value (NPV) of US$1.4 billion over a 12.7-year mine life. Shares rose.
Initial capital costs are forecast at US$936 million, while the internal rate of return (IRR) is pegged at 21%, according to a preliminary economic assessment (PEA), released Monday. The payback period for the project, located about 95 km southwest of the capital, Georgetown, is 3.8 years and at a US$1,950 per oz. spot gold price scenario.
The NPV, which is at a 5% discount rate, rises to US$2.5 billion, with an IRR of 31% and payback of two years in a US$2,500 per oz. spot gold price case, close to gold’s historic high US$2,532 per oz. three weeks ago.
“Oko is ideally sequenced to benefit from G Mining’s regional footprint, development expertise, anticipated free cashflow from our in-production Tocantinzinho gold mine in Brazil and historically high gold prices,” president and CEO Louis-Pierre Gignac said in a release. “This exceptionally positive PEA only captures a snapshot of the potential value of Oko.”
G Mining shares gained 3.8% to $8.20 apiece on Monday morning in Toronto, valuing the company at $1.7 billion. Its shares traded in a 52-week range of $1.67 and $10.83.
Studies due
The company plans a feasibility study by next June and to submit its environmental and social impact assessment by the end of this year.
The PEA comes during a productive period for G Mining after it declared commercial production at Tocantinzinho last week. In April, it acquired Reunion Gold and Oko West in an $875-million deal. The report gives the open pit and underground Oko West mine average annual output of 350,000 oz. at an all-in sustaining cost of US$986 per oz. and sustaining capital costs of US$537 million over the mine life.
BMO Capital Markets mining analyst Andrew Mikitchook said in a research note the main positive takeaway from the PEA is setting a quick trajectory to commercial production in the first half of 2028.
“Two key milestones will likely focus shareholders’ attention: progress towards securing the Oko West mining permit by mid-2025 and the ramp-up and cashflow from the Tocantinzinho mine over the next several quarters as an integral part of the financing sources for Oko West’s development,” he said on Monday.
Ore is to be processed on-site in a conventional circuit through carbon-in-leach, carbon elution and gold recovery circuits.
Oko West hosts 64.6 million indicated tonnes grading 2.05 grams gold per tonne for 4.3 million oz. and 19.2 million inferred tonnes grading 2.59 grams gold for 1.6 million oz., according to a resource update last February.
Reaching beyond Guyana
Greenheart Gold (TSXV: GHRT), spun out from G Mining and Reunion in July, is now focused on regional assets outside of Oko West in the Guiana Shield, such as the Abuya and Majorodam projects in Guyana and neighbouring Suriname, respectively.
The shield’s Marowijne belt in Suriname holds Zijin Mining’s Rosebel and Newmont’s (NYSE: NEM; TSX: NGT) Merian gold mines.
The company also said Monday it made a deal with BHP (ASX: BHP; NYSE: BHP; LSE: BHP) subsidiaries to acquire tenements in the Gurupi gold belt, including on the CentroGold project in Maranhão state, northern Brazil.
G Mining will grant BHP a 1% net smelter return (NSR) royalty on the first 1 million oz. gold produced at the tenements and a 1.5% NSR royalty on gold produced afterwards.
CentroGold comprises 47 tenements across about 1,900 sq. km and hosts several identified gold targets along a mineralized trend longer than 80 km. It includes the Blanket, Contact and Chega Tudo open pit deposits.
Blanket and Contact host 20 million tonnes of proven probable reserves grading 1.7 grams gold per tonne for 1.1 million oz. gold, and 7.3 million inferred tonnes at 1.8 grams gold for 410,000 contained gold ounces.
Chega Tudo hosts 8.2 million indicated tonnes grading 1.6 grams gold for 425,000 oz. gold, and 3.1 million inferred tonnes at 1.5 grams gold for 152,000 ounces.
A 2019 pre-feasibility study outlined a 10-year mine with average annual production of 100,000 to 120,000 oz. and 190,000 to 210,000 oz. of gold per year in the first two years of production.
The transaction is expected to close in the first quarter of next year.
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