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Cerrado Gold has announced a feasibility study for its Monte do Carmo gold project in Tocantins, Brazil.
The project will produce just under 95,000ozpa of gold for nine years at an average all-in sustaining cost of US$711/oz, initially from an open pit that will transition into an underground operation with a cyanide leach circuit.
Monte do Carmo will yield an after-tax net present value of $401.4 million at a 5% discount rate and an internal rate of return of 34% at a $1750/oz gold price, with a 2.2-year payback following a $186.6 million initial capital expenditure.
"Based on these results, we are confident that the project is positioned to be a high-quality, low cost and low capital-intensive gold producer in the near term," said Cerrado Gold chief executive Mark Brennan.
The project has a capital efficiency of $263/oz of production, above the feasibility average of $175/oz and more than double the $120/oz in the company's 2021 preliminary economic assessment (PEA).
The PEA envisioned the production of 131,000ozpa at an AISC of $612/oz for eight years, with a 94.8% IRR, and initial capital of $126 million.
Monte do Carmo hosts reserves of 16.8Mt grading 1.66gpt gold, containing 895,000oz, mainly in the Serra Alta deposit and the Gogo Do Onca satellite deposit.
Cerrado said it is on track to receive a construction permit by year-end and is progressing with project financing to make a fully financed construction decision in the June quarter of 2024.
Share in Cerrado Gold are trading at 63c, valuing the company at C$61 million.
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