Rupert Resources (TSXV: RUP) announced the results from its preliminary economic assessment (PEA study) for the company's 100%-owned Rupert Lapland project, including its flagship Ikkari gold discovery and Pahtavaara mine and mill located in northern Finland.
According to the study, the after-tax net present value (at a 5% discount) comes to US$1.6 billion. The unlevered internal rate of return was estimated at 46%, with payback occurring after only two years, assuming a gold price of $1,650 per ounce. The deposit, discovered in 2020, is projected 22 years of life and is expected to produce 200,00 oz. of gold between years one and 11.
Initial capital costs are estimated at US$405 million, with sustaining capital at US$395 million. All-in sustaining costs are forecast at US$596 per oz. over the first 11 years of production and US$667 per oz. over the mine life. The project will be mined via open pit for 11 years, transitioning to underground mining in year 10. The study also included supplementation of run-of-mine Ikkari ore with concentrate grading 11 grams gold per tonne from underground operations at Pahtavaara starting in year 12.
As well, the Ikkari deposit's updated mineral resource estimate upgrades 84% of inferred ounces to the indicated resource category and defines a cohesive deposit with broad intervals of consistent high-grade gold.
"This PEA study indicates exceptionally high-margin and meaningful returns on a robust project. The results are a testament to both the quality of the asset and our technical team," said James Withall, CEO of Rupert Resources.
"In only three years, we've gone from discovery hole to a preliminary study outlining an after-tax NPV of $1.6 billion, anchored by Ikkari. What excites us is that we still have room to grow at Ikkari and other satellite targets that we will be drill testing this winter. We have a real opportunity to not only advance Ikkari as outlined in our PEA, but systematically develop a cornerstone asset in a significant new gold camp over time," Withall said.
The first resource, delivered in 2021, was 4 million oz. gold in 49 million inferred tonnes grading 2.5 grams gold per tonne.
Shares in Rupert Resources rose as high as 15.5% to $5.15 on the news. In the late afternoon, shares traded at $4.56 in a 52-week range of $3.53 and $6.77. The company has a market cap of $872.4 million.