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New Mexico mine to cost less than $30m

Tuesday, October 4th, 2022

Minera Alamos has announced the results of a preliminary economic assessment (PEA) for its Cerro do Oro project, in Mexico, detailing plans for a 60 000 oz/y gold mine that will cost less than $30-million.

The project has an 8.2-year mine life, based on an initial mineable total of 59 000 t of mineralisation heap leached at an average rate of about 20 000 t/d.

The Cerro do Oro mine will require preproduction capital costs of $28.1-million and will be paid back in 11 months.

Minera Alamos purchased a used crushing plant, which reduces up-front capital requirements.

“Given the rampant inflationary pressures across the industry, it is a testament to Minera’s smart and nimble business model that a new mine could be developed at Cerro do Oro for the low capital intensity presented in the PEA,” commented president Doug Ramshaw.

The PEA, using metal prices of $ 1600/oz, delivered robust economics, with an aftertax net present value, using a 5% discount, of $150.5-million and an internal rate of return of 111%.

The project has a life-of-mine all-in sustaining cost of $873/oz.

“Leaning on our team’s collective experience in mine building in Mexico with capital and operating costs informed by the recent construction and ramp up of the Santana gold mine, the Cerro do Oro PEA is a game changer for Minera as we strive to reach our initial target of a 100 000-oz/y gold producer,” said Ramshaw.

Cerro do Oro’s updated inferred mineral resource estimate contains 67-million tonnes of 0.37 g/t, based on an upward revision of the base case resource metal price of $1 700/oz.

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