JOHANNESBURG (miningweekly.com) – An updated prefeasibility study (PFS) on TSX-V-listed Amarillo Gold’s Mara Rosa project, in Brazil, has demonstrated improved economic metrics, compared with a 2011 study, including a rapid after-tax payback period of just over two years.
The updated PFS investigated two mining scenarios – owner-operated and contract mining.
The contract mining scenario has now been selected as the base case, owing to its lower initial capital expenditure requirement, estimated at $148-million, and higher internal rate of return (IRR) of 35.2%.
The updated PFS indicated a net present value, using a 5% discount rate of $178-million, with cash operating costs estimated to be $545/oz and all-in sustaining costs at $627/oz.
The mine, which will be a single openpit operation, is expected to produce 140 000 oz/y of gold over the first four years, with the average life-of-mine production projected to be 112 000 oz/y over eight years.
The project is expected to have a positive impact on the gross domestic product of the surrounding region, generating over $1-billion of gross revenue and contributing about 300 permanent jobs over its mine life.
“This updated PFS firmly establishes superior economics for our Mara Rosa project. The project benefits from being a simple, openpit, proposed mining operation with a rapid after-tax payback period of only two years.
“Amarillo is pleased to be in the pro-mining state of Goias where we are surrounded by excellent infrastructure and multiple operating mines,” commented Amarillo CEO Buddy Doyle.
Edited by: Creamer Media Reporter
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