Los Ricos North Project : GoGold Resources estimates initial capex of $221m

GoGold Resources has estimated US$221 million initial capital investment for the development of its Los Ricos North Project, located in Jalisco State, Mexico based on a newly filed preliminary economic assessment (PEA).

According to the Canadian-based silver and gold producer, the sum includes $29 million allocated to contingency costs expected to cover an 18-month build, as well as an additional expansion capital of $137 million. The sustaining capital costs over the life of the mine (LOM) are projected at $6 million.

The PEA for the Los Ricos North Project presents an encouraging financial outlook. Using a base case silver price of $23 per ounce and gold price of US$1,800 per ounce, it forecasts an after-tax net present value (NPV) of $413 million, offering an after-tax internal rate of return (IRR) of 29%.

Over a projected 13-year mine life, the PEA anticipates the production of a substantial 110.3 million payable silver equivalent ounces (AgEq). This figure comprises 68 million silver ounces, 221,700 gold ounces, 22.8 million pounds of copper, 144.1 million pounds of lead, and 242.2 million pounds of zinc.

The average LOM operating cash costs are set at $9.5 per oz AgEq, with all in sustaining costs (AISC) estimated at $9.68 per oz AgEq.

Throughout the first twelve years of operation, GoGold Resources expects an average annual production of 8.8 million AgEq ounces from the Los Ricos North Project.

The majority of the LOM production, approximately 75%, is anticipated to come from four open pits containing oxide mineralization, with the remaining 25% stemming from a separate open pit exclusive to sulphide mineralization.

GoGold Resources has conceived the Los Ricos North Project as an open-pit mining operation, comprising five open pits. The initial four pits, housing the oxide mineralization, are scheduled for mining during the first nine years of the project. The final pit, laden with sulphide mineralization, is planned for excavation during the last four years.

The processing plant will feature conventional crushing, grinding, cyanide tank leaching, tailings filtration (dry stack), and Merrill Crowe precipitation mechanisms to handle the oxide mineralization. For processing the sulphide mineralization, a flotation circuit will be constructed in the eighth year of the project, the costs for which are accounted for in the expansion capital.

Water for the process plant will be sourced from a nearby surface water body, while high voltage grid power will be supplied by the local utility. The open-pit mining operation at the Los Ricos North Project will follow a contracted framework, entailing drilling and blasting, subsequent conventional loading, and truck haulage to the waste rock storage facilities and the process plant.

This development marks GoGold Resources’ second PEA completion within the Los Ricos District, following the Los Ricos South PEA in January 2021. The company anticipates an updated Mineral Resource Estimate (MRE) and PEA for Los Ricos South to be released later this summer.

Brad Langille — GoGold Resources President and CEO said: “We’re pleased to file our technical report for the Los Ricos North PEA which provides the details of the strong economics of the project – showing 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 Los Ricos South, which we see as a high grade bulk underground mine targeted to be our first deposit advanced to production.

“The filing of the Report 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.”