B2Gold (TSX: BTO) has released the results of a feasibility study conducted on their Colombia-based Gramalote gold project. The project, based in the Department of Antioquia, is said to have an after-tax net present value (5%) of $941 million alongside an IRR of 22.4% at $2,500 gold.
That NPV meanwhile is said to jump to $1.72 billion, while the IRR moves to 33.5%, at the current spot gold price of $3,300 an ounce. Payback is estimated at 3.4 years in the former scenario, while it falls to 2.4 years in the latter scenario.
The estimate is based on a proposed open pit gold mine with an initial mine life of 11 years and mill processing of 13 years. The project is expected to produce over 2.3 million ounces of gold over that time period, with average annual gold production of 177,000 ounces of gold and a recovery rate of 95.7%.
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Over the first five years, higher average grades of 1.23 g/t gold are expected to result in average production of 227,000 ounces of gold a year and higher recoveries of 96.1%.
In terms of costing, initial capital costs are estimated at $740 million, while post construction capital is estimated at $305 million. On a per ounce basis, cash operating costs are pegged at $700 an ounce, while all in sustaining cost are estimated at $985 an ounce over the life of the project. For those first five years of high production, cash operating costs are lower at $512 an ounce, while AISC is estimated at $851 an ounce.
As part of the next steps, B2Gold is required to conducted a modified work plan and modified environmental impact study to proceed with the project. Work has begun on these, with the documents expected to be submitted in late 2025 and early 2026, respectively.
B2Gold last traded at $4.78 on the TSX.
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