Yamana's phase 2 prefeasibility study is based on the mine's current mineral reserves and 11.5-year mine life to expand throughput capacity from 6,500 tonnes per day to 8,500tpd which would increase average gold production from 175,000 ounces a year to 230,000oz/y.
The expansion consists of modifications to the processing plant as well as underground development acceleration, replacement of the existing tertiary crusher with a larger one, the addition of a third ball mill, and a new silo.
The estimated $57 million capital cost includes $35 million related to the processing plant (including a 35% contingency), $14 million for underground mining and $8 million for infrastructure.
At the new production rate, the cost structure improves as the all-in sustaining costs decrease to $727/oz. The project has an after-tax net present value (NPV) of $777 million at a $1,250/oz gold price and $1.23 billion at $1,550/oz.
An extended mine plan would see the addition of 9.5 million tonnes of plant feed at an average grade of 2.4 grams per tonne increasing the mine life to 14.5 years. This would generate an after-tax NPV of $777 million at a $1,250/oz gold price and $1.23 billion at $1,550/oz.
Yamana is working on project optimisation aimed at improving mining recovery, reducing costs and converting mineral resources to mineral reserves. Phase 2 completion would occur in early 2023 with the timeline dependent on completing a feasibility study, currently planned for mid-2021. The permitting process is underway and expected to be approved by late 2021.
Shares in Yamana Gold are trading at C$6.91, valuing the company at $6.6 billion.
