Cerrado Gold Inc. (TSXV: CERT | OTCQX: CRDOF) has amended its release dated 2 November 2023. The results in the original release were impacted by a computational error which resulted in incorrect NPV and IRR figures being published as part of the feasibility study for the Monte Do Carmo Project, Brazil.
As a result, the after tax NPV5% declined to US$369M from US$401M and the IRR declined from 34% to 32%. All other information is unchanged.
Cerrado Gold Inc. has announced positive results of an independent feasibility study prepared by DRA Global Limited on its wholly-owned Monte do Carmo gold project, Tocantins State, Brazil.
The results of the feasibility study (FS) replace the 2021 updated preliminary economic assessment dated 23 April 2020.
Mark Brennan, CEO, and chairman, stated, “We are extremely pleased that the results of this feasibility study demonstrate that Monte do Carmo is an extremely robust project that will generate significant returns on capital for a good period of time. 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. We see the Serra Alta deposit as the cashflow engine to unlock future exploration and expansion potential of the greater Monte do Carmo Project.”
Monte do Carmo is expected to commence production at a rate of 1.92Mtpa from the open pit for total production of 709,920oz. In the fourth year, simultaneous underground development will be initiated contributing an additional 143,252oz over five years of operation.
The FS has updated the project’s measured and indicated resources to 1,012koz of gold (18.4Mt at 1.72g/t Au) and inferred resources to 66.1koz of gold (1.1Mt at 1.95g/t Au).
Furthermore, two open pit operating scenarios were analyzed for cost estimation purposes. The first scenario involved a traditional owner-operated model, while the second scenario explored a contractor-operated model. Over the nine-year life of the mine, it was found that the owner-operated option produced a higher NPV, although with some reduction in IRR. Consequently, this study adopted the owner-operated option for both the open pit and underground operations.
“We are extremely pleased that the results of this feasibility study demonstrate that Monte do Carmo is an extremely robust project with low capital and operating costs that provide an approximate 2:1 ratio of NPV over Capex. While this error is unfortunate, the project remains one of the most financially robust smaller-scale development projects in the Americas.” Said Mr. Brennan.
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