Produced by CSA Global Geosciences Canada of Toronto, the PEA outlined robust project economics using a base case price assumption of US$1,250/oz of gold, $16/oz silver and $5,725/t of copper.
Applying an 8% discount rate, the after-tax net present value came to $69.8 million, with an eye-wateringly impressive internal rate of return (IRR), on the same basis, of 93%. In general, any IRR above 35% for a mining project is considered a strong result.
Pre-production capital was calculated at $26.9 million. The initial mine plan would produce 43,000oz gold per year, 220,000oz silver and 1,000t copper, translating to about 50,000oz of gold equivalent per annum.
The project has super low all-in sustaining costs pegged at $440/oz gold over the forecast five-year mine life.
The mill would process ore at a head grade of 3.68g/t gold at a rate of 1,100tpd, and was expected to recover 90% of the contained mineralisation.
"With an after-tax IRR in excess of 90%, today's excellent PEA results confirm that the La Fortuna project provides a robust base for the next phase of gold production in the company's growth pipeline," said CEO Darren Koningen.
He added the simplified gold recovery system represents a conservative starting point that is well suited to the initial project resource which, to date, has been based exclusively on previously drilled mineralisation.
The current PEA was based only on a ‘starter pit' scenario, and used a single zone of drilled mineralisation that appeared to remain open geologically, the company advised.
The project also has additional milling capacity, being permitted for a 2,000tpd operation. The firm has bought a used 2,000tpd processing facility that has been used as the basis for the La Fortuna project processing facilities.
The company has set itself the goal of reaching annual output of 150,000oz gold in 2019, from one or more operations.
La Fortuna hosts 3.5 million tonnes in the combined measured and indicated categories, grading 2.78g/t gold, 16.5g/t silver and 0.22% copper at a 1% cutoff, for 309,800oz contained gold, 1.84 million ounces silver and 7,600t copper.
"This PEA represents a key milestone for the company as we begin to deliver to the market's attention the underlying project economics of our development pipeline that focuses on cost-efficient and targeted production that can incrementally build a significant production profile over time," president Doug Ramshaw said.
"With the recently submitted commercial permit applications at the Santana project and ongoing work at the company's Guadalupe de los Reyes project we are aggressively expanding our activities on multiple fronts."
Koningen added: "As our engineering work progresses we continue to find opportunities to reduce the initial project capital requirements and improve overall project economics.
"Coupled with our strategic partnership with Osisko Gold Royalties that includes an option to provide a significant portion of the project capital requirements in return for a project royalty, these additional optimizations will greatly reduce the upfront funding requirements of this already low capital cost operation."
Minera Alamos' equity closed Thursday up C2c a share, or 19%, to reach C12.5c apiece, giving the junior a market valuation of C$37.62 million.
