GoGold Resources Announces Initial PEA for Los Ricos North With NPV of $413M

GoGold Resources, a silver and gold production and exploration company based in Canada with projects in Mexico, released the results of its initial preliminary economic assessment (PEA) for the Los Ricos North Project on May 17. The mine site is in Jalisco State, Mexico. 

The PEA featured numerous highlights. Starting with a base silver price of $23 per ounce and a base gold price of $1,800 per ounce, the release reported an after-tax net present value (NPV) of $413 million, using a 5% discount rate. The after-tax internal rate of return (IRR) came to 29%. 

The Los Ricos North Project, an open-pit mining operation, has an estimated 13-year lifespan with the ability to produce 110.3 million payable silver equivalent ounces. The total estimates consist of 68 million ounces of silver, 221,700 ounces of gold, 22.8 million pounds of copper, 242.2 million pounds of zinc, and 144.1 million pounds of lead.

The report also included the average LOM operating cash costs. The figure came to $9.50 per ounce AgEq. The project’s all-in-sustaining costs totaled $9.68 per ounce AgEq, with the average annual production reaching  8.8 million AgEq ounces for the first through twelfth years. 

“This is a first look at the strong economics around our Los Ricos North mineral resource with average annual production of 8.8 million AgEq oz at a first quartile AISC of $9.68/oz AgEq. Los Ricos North forms a pipeline of growth after the construction of Los Ricos South, which we see as a high grade bulk underground mine targeted to be our first deposit advanced to production. We look forward to the updated Los Ricos South mineral resource including the Eagle Zone and an updated PEA to be completed this summer,” Brad Langille, GoGold Resources’ president and CEO, explained.

“The release of this PEA represents one of the milestones for the 2023 year in the Los Ricos District. The other key milestones for the 2023 year in the Los Ricos District are an updated Mineral Resource and PEA in Los Ricos South incorporating the Eagle Zone, followed by a Pre-Feasibility Study in Los Ricos South which is anticipated before year’s end. With US$100 Million in cash we are well positioned to develop Los Ricos South pending the results of the upcoming studies,” Langille concluded. 

GoGold Resources controls two exploration projects in Jalisco State, Mexico, at its Los Ricos Property. The south project began in March 2019, with an estimated Measured and Indicated Mineral Resource of 63.7 million ounces AgEq grading at 199 grams per ton AgEq in 10 million tons from July 29, 2020. The company reported Inferred Mineral Resource of 19.9 million ounces AgEq grading at 190 grams per ton AgEq in 3.3 million tons.

On January 20, 2021, GoGold Resources announced the south project’s PEA, with the after-tax NPV (using a 5% discount rate) of $295 million. In October 2022, the company acquired the Eagle Concession adjacent to the main area containing its initial reserves. 

Following the PEA release of $295 million in 2021, GoGold Resources has clearly amped up production rates. The company first launched the Los Ricos North Project in March 2020. 

The initial Indicated Mineral Resource announced on December 7, 2021, was 87.8 million ounces AgEq grading at 122 grams per ton AgEq in 22.3 million tons. The Inferred Mineral Resource estimate was 73.2 million ounces AgEq grading at 111 grams per ton AgEq in 20.5 million tons.

As the company expands efforts in the Los Ricos district, the excellent PEA figures only make sense. 

“GoGold maintains a strong balance sheet with over $100 million USD in cash which continues to allow us to advance our Los Ricos South project in an expeditious manner. Reprocessing of older material stacked in 2015-2016 at Parral allows us to maintain a strong cash balance by deferring sustaining capital and more rapidly moving ounces from inventory to cash. Our most important priority is the advancement of Los Ricos South towards production and cash flow, and after that advancing Los Ricos North,” Langille explained in a quarterly release explaining financial figures. 

The Q1 2023 release showed numerous highlights, such as the $7.6 million revenue figure from selling 355,741 silver equivalent ounces at the realized price per ounce of $21.39 per ounce. In Q1 2023, the company produced 400,145 silver equivalent ounces, including 173,717 ounces of silver, 2,016 ounces of gold, and 143 tons of copper. 

With excellent figures like the revenue of $7.6 million and NPV of $413 million, GoGold Resources is clearly on the right track, as are many major precious metals companies attempting to capitalize on today’s rising demand rates.

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