GoldMining's São Jorge project NPV at $532 million
GoldMining Inc. released a preliminary economic assessment for its São Jorge project in Brazil, showing an after-tax NPV of $532 million and an IRR of 42.4%. The project requires an initial capital investment of $202 million and is expected to produce an average of 51,250 ounces of gold annually over a 10.6-year mine life. The company plans to commence pre-feasibility studies to advance the project towards a construction decision.
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GoldMining Inc. has announced the results of a preliminary economic assessment (PEA) for its São Jorge project in Pará State, Brazil, outlining strong base case economics with an after-tax net present value at a 5% discount rate (NPV5%) of $532 million. The assessment indicates an after-tax internal rate of return (IRR) of 42.4% based on a base case gold price of $3,500 per ounce, with an initial payback period of 2.8 years. The project demonstrates significant leverage to gold prices, with the after-tax NPV5% rising to $836.8 million at spot prices of $4,400 per ounce, yielding an IRR of 58.6% and a payback period of 2.4 years.
Financial and Operational Highlights
The PEA highlights high capital efficiency, with initial capital estimated at $202 million, including a 25% contingency. This results in an attractive base case NPV5% to initial capital ratio of 2.6x. The project's location adjacent to existing power lines, paved highways, and an available skilled workforce supports this relatively low capital hurdle. GoldMining's balance sheet, comprising approximately $183 million in cash and publicly traded securities, positions the company to advance the project through the next stages of development.
The São Jorge project is expected to be a robust cash generator, with an estimated average annual gold production of 51,250 ounces over a 10.6-year life of mine (LOM). Peak production is projected at 57,200 ounces per year during years 2 through 4. The project's resilient cost profile is supported by an estimated LOM All-In Sustaining Cost (AISC) of $1,464 per ounce.
Technical Specifications and Next Steps
The PEA envisions a conventional open-pit truck-and-shovel operation with a processing rate of 5,500 tonnes per day. A proven processing flowsheet using standard gravity and leach circuits is expected to achieve high metallurgical recoveries of 90% Au. GoldMining plans to expeditiously commence pre-feasibility studies as the project is further de-risked and moves forward with permitting towards a construction decision.
| Metric | Value |
|---|---|
| After-tax NPV5% | $532 million |
| After-tax IRR | 42.4% |
| Initial Payback | 2.8 years |
| Initial Capital | $202 million |
| Average Annual Production | 51,250 oz |
| Life of Mine | 10.6 years |
| LOM AISC | $1,464/oz |
How will the company fund the remaining gap between the initial capital requirement and current cash resources?
What are the primary risks associated with obtaining permits in Pará State, and how might they impact the construction timeline?
How might fluctuations in gold prices below the base case assumption of $3,500 per ounce affect the project's profitability?
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