(MENAFN- ProactiveInvestors - Australia) Coventry Resources (ASX: CYY, TSX-V: CYY) has delivered favourable preliminary economics for the Cameron Gold Camp in northwestern Ontario, Canada.
Initial results of a Preliminary Economic Assessment has produced a base case pre-tax net present value (NPV) of US$111 million and a 20.1% internal rate of return (IRR) based on a US$1,472 per ounce gold price.
Assuming a gold price of US$1,700 per ounce, the pre-tax NPV increases to $205 million and the IRR increases to 31.2% at a discount rate of 5%.
The study is based on an initial 10 year mine life producing 604,673 ounces of gold from the Cameron and Dubenski gold deposits.
Initial development of the Cameron Gold Camp will be as a combined open-pit and underground operation, including open pit and underground material from the Cameron Gold Deposit, as well as open pit material from the satellite Dubenski Gold Deposit.
Ore will be processed through a conventional crush, grind and carbon in leach processing circuit.
Average annual production of 61,000 ounces of gold is expected to be produced at an average cash cost of $852 per ounce.
Life of mine gold recoveries are expected to be high, averaging 91.5%.
There is substantial potential to increase the grade in the first two years and extend the mine life through additional exploration and resource development success at nearby satellite prospects owned by Coventry.
The Preliminary Economic Assessment estimates initial development capital expenditure of $110 million, including 20% contingency.
Further increasing the confidence in the Cameron Project, Measured and Indicated resources account for 75% of the total material included in the study.
Coventry now plans to deliver a completed Definitive Feasibility Study by the end of 2013.
Merger
Last week Coventry and Crescent Resources completed their planned merger, with Crescent Resources now having formally changed its name to Coventry Resources.
The merger provided Coventry with a TSX-V listing, with Crescent already previously listed on the Canadian exchange.
Crescent is a gold exploration company that holds the Uncle Sam Gold Project in Alaska.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.