Geologix Explorations (GIX.V) has released an updated Preliminary Economic Assessment on its Tepal copper-gold project in Southwest Mexico. The report is focusing on a 22,000 tonnes per day open pit operation for the sulphides, whilst a separate 5,500 tonnes per day CIL plant will be used for the oxide mineralization.
Using a gold price of $1250/oz and a copper price of $2.5/lbs, Tepal has an after-tax NPV5% of $169M and an internal rate of return of 24 with a payback period of just 2.3 years. The project remains very dependent on the metals prices, as a gold price of $1125/oz and a copper price of $2.25/lbs would push the after-tax NPV5% to just $78M, whilst a 10% metals price increase would boost the NPV to in excess of a quarter of a billion.
The initial capex of $214M seems to be financeable, given the pretty decent returns and the high gold production in the first five years of the mine life (almost 110,000 ounces per year), supported by the low production cost (less than $10/t).
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The author has no position in Geologix Explorations. Please read the disclaimer
