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Summary
- The latest estimates show that the mine would have a life of 12 years, of which in the first eight years it would be able to produce 121,000 ounces of gold per year.
- The Garrison project in the Kirkland Lake region of Ontario, Canada, is a 100 per cent owned gold mining project of O3 Mining
- The PEA report serves as an important document to attract investor interest in the company and the project.
Canadian Gold miner O3 Mining has come out with its Preliminary Economic Assessment (PEA) report for one of its mining projects -- the Garrison project in Canada. The report portrays the project with a very high economic value that would push the company’s rankings among the top gold producers in the country.
PEA report
The PEA report is an important document for a company as it gives a basis for analysts and investors to value a mining company, which further guides their investment decisions.
The latest estimates provided in the PEA report on the Garrison mine project have shown a production profile of 121,000 ounces per year during the first eight years. The all-in sustaining cost to the company to operate this mine would be around US $818 per ounce, and it will have an after-tax payback period of 2.3 years. Mine would have an expected life of 12 years.
Initial capital requirement for a processing plant including mine pre-production and related infrastructure would be $267 million. The NPV of the project at a 5 per cent discount rate is $321 million with an after-tax IRR of 33 per cent.
Other projects
O3 Mining has several mining properties in Canada, which is spread over 460,000 hectares. In Quebec, it has three mining property projects -- Vald’or, Matagami and Chibougamau.
In Ontario, it has one major mining property project -- Timmins and two smaller ones -- Wydee gold and Matachewan properties. As per latest estimates, all of the company’s resources contain 2,066,154 ounces of gold.
Share price performance
(Source: Refinitiv, Thomson Reuters)
The shares of O3 Mining Inc (CVE: OIII) last traded at CAD 2.94 per share on 14 December 2020, losing 0.34 per cent over the previous day’s close close.
