Equinox Gold has released the results of a preliminary economic assessment (PEA) on an underground development within its Aurizona mine site in northeastern Brazil.
The early-stage study suggests a feed contribution of 2,800 t/d from the Piaba underground to the existing 8,000 t/d plant at the site.
This incremental operation would deliver an additional 740,500 oz. of gold over 11 years
This incremental operation would deliver an additional 740,500 oz. of gold over 11 years at all-in sustaining costs (AISC) of $925 per oz. at an initial capital cost of $69.7 million.
The resulting after-tax net present value for this development, at a 5% discount rate, comes in at $122 million with a 25% internal rate of return.
“This PEA demonstrates the substantial opportunity for both mine life extension and increased annual gold production at Aurizona through development of an underground mine,” CEO Christian Milau said in a release.
“With the potential for expansions to the current open pit, additions of other near-surface resources and further opportunities for Piaba underground resource expansion at depth and along strike, Aurizona is expected to be a long-life cornerstone asset for Equinox Gold.”
Based on the PEA, the underground deposit would be extracted through bulk mining with first mill feed expected 2.3 years after the start of sub-surface development.
Steady-state production of 2,800 t/d would be achieved at the end of the fourth year following the start of construction. The deposit would be accessible from a main ramp developed off of the existing pit.
Of the 7.3 million tonnes of indicated resources at 1.96 g/t gold and 16.5 million inferred tonnes grading 1.98 g/t at Aurizona, the PEA envisions development of 2.8 million tonnes of the indicated material grading 2.73 g/t gold and 6.2 million tonnes of the inferred subset at 2.89 g/t gold.
The company plans to advance further studies on an underground development of Piaba with a pre-feasibility expected next year. Additional drilling is planned to upgrade existing resources.
The Piaba deposit has been traced over 4 km along the Aurizona shear zone and drilled down to a depth of roughly 600 metres; it remains open at depth and along strike.
The Aurizona open-pit mine achieved commercial production in July 2019.
The company’s most recent production guidance for the asset this year was at 115,000 oz. to 125,000 oz. of gold at AISCs of $1,100 to $1,150 per oz. These numbers do not include potential effects due to covid-19.
(This article first appeared in the Canadian Mining
Journal)