Probe posts 24.4% IRR with Novador PEA

Probe Gold has released an updated preliminary economic assessment (PEA) for its Novador open pit and underground mining gold project near Val-d'Or in Québec, Canada.

The study outlines an average production of 255,000ozpa for 12.6 years, a 23% increase from the 2021 PEA at an all-in-sustaining cost of US$1038/oz.

The project, formerly known as Val-d'Or East, would yield an after-tax net present value (NPV) of C$910 million at a 5% discount rate, an internal rate of return (IRR) of 24.4% and a 4.4-year payback at a US$1750/oz gold price following a $602 million initial capital investment. The project has a capital efficiency of $187.5/oz to be produced, slightly above average, with an NPV/capex ratio of 1.5. The company said that at a gold price of US$2050/oz, the IRR increased to 35.4%.

"Novador is a large, sustainable mining project leveraged to the gold price with a production profile capable of producing nearly 300,000ozpa in the first five years, marking a significant improvement over the previous PEA," Probe Gold chief executive David Palmer said.

The study incorporates gravity and leaching of the gravity tails, with 50% estimated to be recovered via gravity and filtered tailings. It also simplified the milling by removing ore sorting. Probe is also evaluating alternative mining and milling scenarios due to the excess milling capacity in the region.

"We have integrated project elements to reduce its environmental footprint by taking advantage of its proximity to existing infrastructure. For example, the project includes rail delivery to site for reagents and consumables, electrification of open pit mining equipment (drills and shovels), backfilling of two open pits (one with waste rock and the other with tailings) and dry staking of filtered tailings," Probe Gold's COO Yves Dessureault said.

The PEA is based on a measured and indicated resource of 67.5Mt grading 1.63gpt gold containing 3.5Moz, based on 581,000m of drilling. An additional 1.1M of gold are in inferred resources. Probe says Novador holds exploration potential, which could extend the mine life, as the study did not consider resources on its other Val-d'Or East properties.

Probe initiated permitting in the October quarter of 2023 by submitting the initial project description to the Impact Assessment Agency of Canada.

Shares in Probe Gold opened up 5% in early trading at C$1.34, valuing the company at C$223 million.