GMV Minerals (TSXV: GMV; US-OTC: GMVMF) has released the results of an updated preliminary economic assessment (PEA) for its wholly owned Mexican Hat gold project in southeastern Arizona, 116 km from Tucson.
The PEA outlines an open-pit heap-leach mine with a mine life of 10 years, producing a total of 525,000 oz. gold at average all-in sustaining costs (AISCs) of US$1,136 per ounce.
Initial capex is pegged at US$67.85 million, and the payback period would be just under three years. The early-stage study estimates an after-tax net present value of US$100 million, at a 5% discount rate, with an after-tax internal rate of return of 29.3%, at a base case gold price of US$1,600 per ounce.
The PEA is based on an inferred resource estimate of 36.73 million tonnes grading 0.58 gram gold per tonne for 688,000 contained oz. gold.
The company says significant expansion potential exists along strike and down dip on the principal controlling structure outside of the resource area, and plans to drill 3,000-4,000 metres of infill holes in the second quarter of 2021.
In addition to updating its resource estimate next year, GMV Minerals plans to undertake metallurgical tests to optimize and improve heap leach gold recoveries.
The company also intends to conduct a tradeoff study to determine whether to mine the project on its own or use contract miners. Other work programs include geotechnical drilling and analysis to optimize the pit slope design, continued baseline water sampling, and updating hydrological, cultural, and environmental studies for permitting purposes.
Mexican Hat is located close to several mines, including Mako Mining's (TSXV: MKO; US-OTC: MAKOF) Commonwealth gold and silver mine, 10 km to the south, and Excelsior Mining's (TSX: MIN; US-OTC; EXMGF) Gunnison copper mine, 30 km to the northwest.
At press time in Toronto, GMV Minerals was trading at 28 ? per share within a 52-week trading range of 7.5 ? and 35 ?. The company has 55.7 million common shares outstanding for a $15.6-million market capitalization.