SolGold PEA Sees Long-life Underground Mine for Alpala

SolGold has reported the results of a preliminary economic assessment (PEA) of the Alpala copper-gold-silver deposit on its Cascabel project in northern Ecuador. The study considers four underground mining scenarios, each based on block caving. Mine life, depending on annual tonnages mined, could range from 49 to 66 years. Resources considered in the block cave designs total 2.4 billion metric tons (mt) at a copper equivalent grade of 0.54% (0.36% copper, 0.27 grams/ mt gold, and 1.1 g/mt silver).

Based on a 50-million-mt-per-year (mt/y) mining scenario, average annual production of metal in concentrates for the first 25 years is estimated at 207,000 mt of copper, 438,000 ounces (oz) of gold, and 1.4 million oz of silver. Life-of-mine production under the same scenario is estimated at 150,000 mt/y of copper, 245,000 oz/y of gold, and 913,000 oz/y of silver. Life-of-mine average grades of metal in concentrate are estimated at 26% copper, 13.2 g/mt gold, and 49.2 g/ mt silver. Average figures over the first 15 years of the operation are estimated at 28.2% copper, 22.1 g/mt gold, and 65.7 g/mt silver. The relatively high valuable metal content and low deleterious elements such as arsenic in the concentrate are expected to attract premium sales values and keep treatment and refining charges low.

Pre-production capital expenditures to develop a mine on the Alpala deposit are estimated at $2.4 billion to $2.8 billion, depending on the production rate scenario. Payback periods are estimated at 3.5 to 3.8 years. Project activities for the remainder of 2019 will focus on continued exploration at Alpala, a further update to the mineral resource estimate, metallurgy and process design, and tailing disposal options. A prefeasibility study is planned for completion in December, to be followed by a definitive feasibility study scheduled for completion at the end of 2020.

Commenting on the findings of the Alpala PEA, SolGold CEO Nick Mather said, “The SolGold Board is excited by the opportunity demonstrated for the Alpala project and that it continues to grow. The unusually low operating costs modeled are due to the relatively soft, fractured nature of the ore, resulting in enhanced caveability, a high degree of fragmentation in the cave, and ease of crushing and millability, combined with low hydroelectric costs. The overall scale efficiencies also assist in the delivery of modeled low operating costs.

“The low startup capex and high net present value signify outstanding financial metrics for a project of this nature, and outstanding modeled internal rates of return of 24.8%-26.5% present an outstanding value proposition for SolGold shareholders.” SolGold holds an 85% registered and beneficial interest in the Cascabel project.

As featured in Womp 2019 Vol 06 - www.womp-int.com