Canada-based silver and gold producer GoGold has estimated initial capital costs of $221m for its Los Ricos North project located in Mexico, based on the findings of an initial preliminary economic assessment (PEA).
The capital cost for the open pit mining operation involves $29m in contingency costs for an estimated 18-month build, additional expansion capital of $137m, and sustaining capital costs of $6m over the project’s life of mine.
According to the PEA, the Los Ricos North project will produce a total of 110.3 million payable silver equivalent ounces.
The production is expected to have 68 million silver ounces, 22.8 million pounds of copper, 221,700 gold ounces, 144.1 million pounds of lead, and 242.2 million pounds of zinc.
With a mine life of 13 years, the project is estimated to produce an average of 8.8 million silver equivalent ounces per year in years one through twelve.
In addition, the PEA estimates a post-tax net present value (NPV) of $413m and an internal rate of return of 29%, with a base case silver price of $23/ounce and gold price of $1,800/ounce.
Located in Jalisco State, the Los Ricos North project was launched in March 2020. The contract mining consists of five open pits, of which four pits contain oxide mineralisation.
The first four pits are expected to be mined over the years one to nine of the project, with the final pit containing sulphide mineralisation anticipated to be mined in years 10 to 13.
GoGold president and CEO Brad Langille said: “This is a first look at the strong economics around our Los Ricos North Mineral Resource with average annual production of 8.8 Million AgEq oz at a first quartile AISC of $9.68/oz AgEq.
“Los Ricos North forms a pipeline of growth after the construction of Los Ricos South, which we see as a high grade bulk underground mine targeted to be our first deposit advanced to production.”
The PEA for the project was completed by independent consultants P&E Mining Consultants with metallurgical test, plant design and costing, and environmental and permitting works done by SGS Canada, D.E.N.M. Engineering, and CIMA Mexico, respectively.
