The project economics were updated using a US$1,600/oz gold price compared with $1,300/oz for the 2017 feasibility. Horne 5 would now generate an after-tax net present value (NPV) of $761 million at a 5% discount rate and an after-tax internal rate of return of 18.9% compared with $602 million and 15.3% in the 2017 study.
Horne 5 would produce 220,300oz/y for 15 years at an all-in sustaining cost of $587/oz including copper and zinc by-product credits compared to $399/oz in the 2017 study following an initial capex of $844.2 million, compared to $801.7 million in 2017. The update used a silver price of $21/oz, $3.20/lb copper and $1.15/lb zinc.
"The Horne 5 project demonstrates robust returns from average annual gold production of 220,300 ounces over a 15-year mine life," said Falco president and CEO Luc Lessard.
"The project benefits from strong existing infrastructure in the world-class Rouyn-Noranda mining area."
Falco said its next steps include completion of a work plan with Glencore and geotechnical studies, negotiation of a principal operating license and indemnity agreement with Glencore, project permitting and financing. Horne 5 is adjacent to Glencore's Horne smelting facility which will process the copper concentrate.
Shares in Falco Resources are trading at C45c, valuing the company at $102 million.
