Omai Gold Mines (TSXV: OMG) has finally put numbers to the project it is named after.
The company’s preliminary economic assessment for the Omai gold project in Guyana lays out an 18-year operation producing 6.33 million payable ounces of gold. Production is expected to average 351,488 ounces a year, peaking at 435,667 ounces.
Using a base case gold price of $3,600 an ounce, the study puts the after-tax net present value at $4.0 billion using a 5% discount rate, with a 24% internal rate of return and payback in 4.1 years. Cumulative after-tax cash flow runs to $8.09 billion over the mine life. Move the gold price to $4,200 an ounce and those figures climb to a $5.5 billion NPV, a 30% return and a 3.4 year payback.
The proposed operation pairs a large open pit at Wenot with an underground mine at Gilt, both feeding a 25,000 tonne per day plant. Wenot supplies 134.1 million tonnes grading 1.08 g/t at a 5.9:1 strip ratio, mined conventionally by truck and shovel. Gilt adds 22.6 million tonnes at 2.98 g/t through drift and fill mining beginning in year three, ramping toward 4,000 tonnes per day. Life of mine head grade averages 1.35 g/t, with metallurgical recovery of 93%.
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None of it is cheap. Initial capital is pegged at $1.43 billion over roughly two years of pre-production, followed by $636 million of sustaining capital and a further $293 million in growth capital for the underground.
Cash costs are estimated to come in at $1,501 an ounce, with all-in sustaining costs of $1,608, suggesting wide margins are possible on a per ounce basis.
“We are very pleased to deliver this PEA, which reinforces the potential for Omai to become a very large-scale mining operation with a clear path to bringing significant economic benefits to the people of Guyana,” said Chief Executive Officer Elaine Ellingham.
The work continues in parallel. A 50,000 metre drill program is running with five rigs, dewatering is due to start shortly, and large-diameter core metallurgical testing is underway alongside geotechnical studies and refinement of the plant site. Environmental permitting is in progress, and an updated resource estimate is expected before year-end, all pointed toward a feasibility study.
Omai Gold last traded at $2.98 on the TSX Venture.
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