LONDON - Metals Exploration PLC (AIM: MTL), a company specializing in gold production and development, has released initial estimates from its internal studies on the La India gold project in Nicaragua. The findings suggest a significant improvement over the 2022 Bankable Feasibility Study (BFS) conducted by SRK Consulting, with an extended life of mine (LoM) and increased annual gold production.
The internal study indicates that La India's LoM could expand from 8.4 years to 12.4 years, with annual gold production potentially doubling from 71,600 ounces to 145,000 ounces. The estimated grade of gold has also increased from 2.56 grams per tonne (g/t) to 3.53 g/t, and the projected total gold production over the LoM has risen from 548,000 ounces to 1.8 million ounces. These estimates maintain a commodity price assumption of $2,500 per ounce of gold.
Despite the promising projections, the anticipated initial capital expenditure (Capex) for La India has seen a modest increase from $116 million to $122 million, while the all-in sustaining cost per ounce of gold is expected to rise from $1,058 to $1,176. The project's net present value (NPV) at a 6% discount rate is estimated at $882 million, with an internal rate of return (IRR) of 54%, down from the previous 71%.
Metals Exploration is aiming to kick off production at La India by the end of 2026. To match the enhanced production potential, the company is finalizing negotiations to purchase a second-hand plant capable of processing 1,400 kilotonnes per annum (Ktpa) of ore. An engineering firm is expected to be appointed in February 2025 to start construction drawings, with exploration drilling and civil works commencing in April and May 2025, respectively.
Darren Bowden, CEO of Metals Exploration, expressed his satisfaction with the progress and the company's readiness to begin construction. He emphasized the strategic importance of La India in replacing cash flow from the Runruno mine as it nears the end of its operational life.
The information provided is based on a press release statement from Metals Exploration PLC.
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