Gold Standard Ventures Corp. (GSV:TSX.V; GSV:NYSE) announced in a news release the positive results of the completed prefeasibility study (PFS) for South Railroad, part of its Railroad-Pinion project in Nevada. The Dark Star and Pinion deposits comprise South Railroad.
Highlights of the base case for South Railroad include an after-tax net present value of $241.5 million, at a $1,400 per ounce ($1,400/oz) gold price and a $17.11/oz silver price, and an after-tax internal rate of return of 27.8%.
The study outlines Proven and Probable mineral reserves of 1,248,000 ounces (1.248 Moz) of gold and 2.705 Moz of silver. It estimates placement of 156,000 ounces of gold annually over an initial eight-year mine life.
As for costs, initial capex is forecast to be $194 million, with an average life-of-mine cash cost of $582/oz after byproduct credit and an all-in sustaining cost (AISC) of $657/oz.
"The South Railroad project delivers excellent free cash flow as a result of the very low cash and AISC cost, even in low gold price environments," the release noted.
CEO and Director Jonathan Awde pointed out that several opportunities exist to improve on the South Railroad base case. One way is by adding to the mine life by upgrading more of the existing resources within the PFS area and capitalizing on other discovered, nearby deposits. Additionally, trade-off studies could reduce capital costs or improve recoveries.
In H1/20, Gold Standard will work on fleshing out some of these opportunities. In the meantime, it will drill some of the project's most prospective targets.
"The substantial free cash flow and significant opportunities for expansion of resources and reserves provide the opportunity for South Railroad project expansion with minimal shareholder dilution," according to the release.
With the PFS done, the company can now finalize permit applications for an environmental impact statement on South Railroad from the lead permitting agency, the U.S. Bureau of Land Management.
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