Pre-Feasibility Study (PFS) Summary
The PFS was initiated in 2022 and was produced by a team of independent consultants that possess extensive expertise in their respective fields. Details on the contributors can be found in the “Qualified Persons” section below.
All amounts are in United States dollars unless otherwise specified. Base case economics were calculated using a gold price of $1,650 per ounce, copper price of $3.75 per pound and a silver price of $20.00 per ounce. The effective date of the PFS is April 7, 2023 and a technical report relating to the PFS will be filed on SEDAR within 45 days of this news release.
The PFS demonstrates further improvements upon the Company’s two prior preliminary economic assessments for the Project, with the latest being the 2020 Preliminary Economic Assessment (the “2020 PEA”).
Summary of improvements at Cangrejos since the 2020 PEA:
- Contained ounces of gold in the mine plan increased to 11.6 million ounces
- Indicated gold mineral resource increased to 16.8 million ounces from 10.4 million ounces
- Mineral resource expansion makes Cangrejos the 26th largest primary gold asset globally by contained gold in mineral resources
- Mine life increased from 25 to 26 years
- Project after-tax NPV of US$2,238 million at US$1,650/oz gold and US$3.75/lb copper
PFS highlights include the following estimates:
- Life of mine (“LOM”) average annual payable production of 371 thousand ounces gold (“koz”)
- LOM average annual payable by-product production of 41 million lbs copper
- 469 koz of average annual gold equivalent production over the LOM
- 26-year mine life with a LOM revenue mix of 79% gold, 20% copper and 1% silver
- 30,000 tonnes per day processing operation years 1-3, erxpanding to 60,000 in year 4 and 80,000 in year 7
- After-tax NPV (5%) of $2.2 billion and IRR 17.2% using base case prices
- Average cash operating costs of $602/oz and all-in sustaining costs of $671/oz, net of by-product credits
- LOM processed grades of 0.55 grams per tonne (“g/t”) gold and 0.10% copper
- Years 1-6 processed grades of 0.71 g/t gold and 0.12% copper
- Initial capital costs of $925 million include working capital and exclude refundable value added tax (“VAT”)
Table 1: Summary of Cangrejos Economic Results by Gold and Copper Price
| Percentage of Base Case Prices | 80% | 100% | 120% |
| Gold Price (per oz) | $1,320 | $1,650 | $1,980 |
| Copper Price (per lb) | $3.00 | $3.75 | $4.50 |
| Pre-Tax NPV (5%) ($M) | $1,516 | $3,511 | $5,505 |
| Pre-Tax IRR | 13.1% | 21.3% | 28.2% |
| Post-Tax NPV (5%) ($M) | $817 | $2,238 | $3,540 |
| Post-Tax IRR | 10.0% | 17.2% | 23.1% |
Table 2: Comparison to 2020 PEA to the 2023 PFS
| Assumption / Value | June 2020 PEA | April 2023 PFS | Comments |
| Gold Price | US$1,400/oz | US$1,650/oz | |
| Copper Price | US$2.75/lb | US$3.75/lb | |
| Post-Tax NPV (5%) | $1,571 million | $2,238 million | |
| Post-Tax IRR | 16.2% | 17.2% | |
| Processed Tonnes | 640 Mt | 659 Mt | |
| Processed Gold Grade Yr 1-5 | 0.76 g/t Au | 0.71 g/t Au | |
| Processed Copper Grade Yr 1-5 | 0.14% Cu | 0.12% Cu | |
| Processed Gold Grade LOM | 0.56 g/t Au | 0.55 g/t Au | |
| Processed Copper Grade LOM | 0.10% Cu | 0.10% Cu | |
| Contained Gold LOM | 11.4 Moz | 11.6 Moz | |
| Contained Copper LOM | 1.5 Blbs | 1,4 Blbs | |
| Average Annual Gold Production | 366 koz | 371 koz | |
| Average Annual Copper Production | 46 Mlbs | 41 Mlbs | |
| Average AISC LOM (net copper) | $604/oz | $671/oz | |
| Mine Life | 25 years | 26 years | |
| Strip Ratio | 1.14 | 1.26 | |
| Initial Capital (excl. VAT) | $915 million | $925 million | Assumes saprolite and saprock are treated as waste material |
| Expansion Capital (excl. VAT) | $405 million | $454 million | Building 30ktpd vs 40 ktpd in Phase 1 |
| Sustaining (excl. VAT) | $445 million | $598 million | |
| Import Duties on Capex | 7% | 0% | Reduced by government subsequent to 2020 |
| Ecuadorian Corporate Tax | 22% | 20% | Reduced by government subsequent to 2020 |
| Ecuadorian NSR Royalty | 3.0% | 3.0% |
Table 3: Mining Material Summary
| Mining Material (Mt) | |
| Ore Material | 659 |
| Waste Material | 827 |
| Total Mined | 1,486 |
| Strip Ratio | 1:26 |
Note: Totals may not add up due to rounding
Table 4: Processing and Production Schedule
| Years 1-3 | Years 4-6 | Years 7-27 | Years LOM | |
| Avg. Processed Tonnes (Mt/a) | 10 | 21 | 28 | 26 |
| 2Avg. Gold Grade (g/t) | 0.73 | 0.71 | 0.52 | 0.55 |
| Avg. Copper Grade (%) | 0.13 | 0.11 | 0.09 | 0.10 |
| Avg. Silver Grade (g/t) | 0.61 | 0.67 | 0.68 | 0.68 |
| Avg. Gold Production (koz) | 190 | 401 | 394 | 371 |
| Avg. Copper Production (Mlbs) | 20 | 40 | 45 | 42 |
| Avg. Silver Production (koz) | 68 | 181 | 262 | 236 |
| Avg. Gold Eq Production (koz) | 237 | 493 | 498 | 469 |
Note: Equivalents calculated using $1,650 per ounce gold, $3.75 per pound copper and $20.00 per ounce silver
Table 5: Cangrejos Life of Mine Capital Expenditure Estimate Breakdown
| Initial Capital ($M) | |
| Process Plant, Infrastructure & Dry Stack Tailings Storage Facility | $603 |
| Equipment (Mining and Ancillary Facilities) | $73 |
| Pre-production Mine Development | $43 |
| Other Direct and Indirect Costs | $97 |
| Sub Total | $816 |
| Contingency (13% weighted average)(1) | $101 |
| Freight, Duty and Taxes | $8 |
| Total Initial Capital (excl. VAT) | $925 |
| Refundable Taxes (12% VAT on certain items)(2) | $82 |
| Expansion Capital ($M) – Years 4 and Years 7 | Years 30 – 60 ktpd | 60 to 80 ktpd |
| Process Plant Expansion Capital | $300 | $97 |
| Contingency (17% weighted average)(1) | $38 | $12 |
| Freight, Duty and Taxes | $5 | $1 |
| Total Expansion Capital (excl. VAT) | $342 | $111 |
| Refundable Taxes (12% VAT on certain items)(2) | $27 | $8 |
| Sustaining Capital and Closure Costs ($M) | |
| LOM Sustaining Capital | $598 |
| Average Annual LOM Sustaining Capital | $24 |
| Net Closure Costs (Closure, Severance and Salvage) | $64 |
Note: Totals may not add up due to rounding
- 1The contingency allowance was developed on an area-by-area assessment of estimate confidence. The assessment considered scope, quantification, and pricing factors to assign a contingency amount to each area.
- 2VAT is recoverable on 12% of the export value once the Project is in production.
Table 6: Summary of Cangrejos Operating Cost Estimates and Cash Costs
| Average Operating Costs | Years 1-3 | Years 4-6 | 7-26 | LOM |
| Mining Costs per Tonne Mined | $2.38 | $2.16 | $2.14 | $2.16 |
| Per Tonne Milled | ||||
| Mining Costs | $10.66 | $6.27 | $4.37 | $4.84 |
| Processing and Tailings Management Costs | $8.32 | $8.54 | $7.44 | $7.59 |
| General, Administrative, Environmental and Site Costs | $2.19 | $1.04 | $0.70 | $0.80 |
| Total Operating Costs | $21.16 | $15.85 | $12.51 | $13.23 |
| Average Net Cash Costs per Ounce | Years 1-3 | Years 4-6 | Years 7-26 | LOM |
| Operating Costs | $1,161 | $840 | $899 | $908 |
| Refining and Transport | $66 | $55 | $63 | $63 |
| By-Product Credits | ($407) | ($379) | ($437) | ($428) |
| Government 3% NSR Royalty | $60 | $59 | $61 | $60 |
| C1 Cash Cost Net of By-products | $880 | $575 | $586 | $602 |
| Sustaining Capital and Net Closure Costs | $266 | $115 | $44 | $69 |
| All-in Sustaining Net Cash Cost | $1,146 | $691 | $630 | $671 |
| Average Gold Equivalent Cash Costs per Ounce | Years 1-3 | Years 4-6 | Years 7-26 | LOM |
| Operating Costs | $932 | $683 | $711 | $721 |
| Refining and Transport | $53 | $45 | $50 | $50 |
| Government 3% NSR Royalty | $48 | $48 | $48 | $48 |
| C1 Gold Equivalent Cash Cost | $1,033 | $776 | $809 | $818 |
| Sustaining Capital and Net Closure Costs | $213 | $94 | $35 | $55 |
| All-in Sustaining Gold Equivalent Cash Cost | $1,246 | $870 | $844 | $873 |
Note: Totals may not add up due to rounding
- By-products and equivalents calculated using $1,650 per ounce gold, $3.75 per pound copper and $20.00 per ounce silver.
- Net Cash Cost: (Operating costs including transportation and refining costs + Royalties – By-product credits) / Payable Au oz.
- Gold Equivalent Cash Cost: (Operating costs including transportation and refining costs + Royalties) / Payable Au Eq oz.
- All-in Sustaining Cash Cost: Adds sustaining capital and closure costs to the Net Cash Cost and Gold Equivalent Cash Cost.
Table 7: Selected Metallurgical Recoveries Summary
| Total Recoveries | |||
| Processed Material Type | Au | Cu | Ag |
| Fresh Rock w/Partially Oxidized Blend | 85% | 79% | 55% |
| Total Recovery | 85% | 79% | 55% |
Table 8: Recoveries by Product Type
| Recovered Metal Distribution by Product Type | |||
| Product | Au | Cu | Ag |
| Dore | 7% | – | 2% |
| Gold Concentrate | 78% | 79% | 53% |
| Total Recovery | 85% | 79% | 55% |
For more detailed information please view the full news release for April 17, 2023: Click Here
Qualified Persons
Leo Hathaway, P.Geo, a “qualified person” within the definition of that term in NI 43-101, has reviewed and approved the scientific and technical information contained on this page.
