- Galleon (GGO) has issued a preliminary economic assessment (PEA) for its West Cache Gold Project
- The project should offer an internal rate of return (IRR) of 33.7 per cent and a three-year payback at US$1,700/oz gold
- This includes the extraction of 940,200 ounces of gold over an 11-year lifespan
- The company is planning extensive drilling to capitalize on West Cache’s technical and financial merits
- CEO David Russell sat down with Caroline Egan to discuss the project’s specifications
- Galleon Gold is a North American exploration and development company
- Galleon (GGO) is up by 6.67 per cent trading at $0.08 per share
Galleon (GGO) has issued a preliminary economic assessment (PEA) for its West Cache Gold Project.
The assessment of the Timmins-based property also includes an updated mineral resource estimate in accordance with NI 43-101.
West Cache is an advanced-stage gold exploration project covering over 3,600 ha. The mineral resource is contained within the Porcupine Sedimentary Basin, a favourable litho-structural corridor with over 5 km of strike length. Mineralization is open in all directions and at depth.
PEA highlights
The project offers a pre-tax net present value (NPV) at a 5-per-cent discount rate of C$378 million. This entails an IRR of 33.7 per cent and a three-year payback at US$1,700/oz gold.
Its after-tax NPV is C$240 million with an IRR of 26.7 per cent over a 3.3-year payback.
The assessment estimates an 11-year mine life plus two years of ramp up with production at 2,400 tpd.
The project should allow for the mining of 940,200 ounces of gold with average annual production of 85,500 ounces. Galleon estimates 893,200 ounces of recovered gold over the life of the mine.
Its cash cost stands at US$814 per ounce with an all-in sustaining cost of US$987 per ounce.
Initial capex stands at C$150 million with sustaining capital of C$199 million over the life of the mine.
West Cache is now progressing toward bulk sampling of Zone #9 and a pre-feasibility study.
Updated mineral resource estimate highlights
The indicated mineral resource now totals 472,000 ounces (4,051 kt at an average grade of 3.63 g/t gold).
The inferred mineral resource now totals 1,088,000 ounces (11,788 kt at an average grade of 2.87 g/t gold).
Next steps
The PEA indicates that West Cache has both technical and financial merit. The project’s next steps include:
- Infill drilling to increase near-mine mineral resources and convert inferred mineral resources to the indicated classification
- Additional drilling along strike and dip to extend mineralization as well as identify new high-grade shoots
- Deeper exploration drilling to test plunge and the area between Zone #9 and West Deep
- Step-out drilling to test regional targets outside of the known mineral resource area
- Continue baseline and permitting studies in support of bulk sample application
- Commence planning and studies for initial ramp engineering for bulk sample
CEO David Russell sat down with Caroline Egan to discuss the project’s specifications.
Galleon Gold is a North American exploration and development company. Eric Sprott holds approximately 23 per cent of the company’s outstanding common shares.
Galleon (GGO) is up by 6.67 per cent trading at $0.08 per share as of 12:00 pm EST.
