Shares in Batero Gold TSXV:BAT jumped as much as 8% in volumes 10 times higher than usual on November 8 after releasing a PEA for its Colombian project earlier this week.
In early afternoon trade the Vancouver-based explorer fell back slightly from highs earlier in the day to trade at $0.125, up 4.2% with more than 615,000 shares changing hands, including one 250,000-block at $0.13.
That compares to usual volumes below 50,000 and made Batero the tenth-most traded stock on the Venture exchange.
It has been a busy week for Batero, kicking off on November 4 with the company announcing a preliminary economic assessment of its 100%-owned Batero-Quinchia project in Riseralda, Colombia, board changes and new prices for warrants issued two years ago.
What makes Batero-Quinchia a particularly attractive asset according to the PEA is the “relatively high gold recoveries and fast leach kinetics of the surface oxide mineralization within the Batero-Quinchia deposit.”
Highlights of the PEA, with a base case gold price of $1,400 an ounce, include:
- Mine life of seven years at 3.5 million tonnes per annum production steady state (10,000 tonnes per day)
- Life-of-mine (LoM) production of 390,000 ounces of gold and 817,000 ounces of silver recovered
- Annual average production of 56,000 ounces of gold and 117,000 ounces of silver recovered
Total open pit production, which has been factored for mining extraction and mining dilution:
- 9.4 million tonnes of measured mineral resources at 0.81 grams per tonne gold and 1.8 g/t silver for 244,000 ounces of contained gold and 545,000 ounces of contained silver
- 11 Mt of indicated mineral resources at 0.77 g/t gold and 2 g/t silver for 273,000 ounces of contained gold and 720,000 ounces of contained silver
- 3.3 Mt of inferred mineral resources at 0.59 g/t gold and 1.6 g/t silver for 64,000 ounces of contained gold and 171,000 ounces of contained silver
- Approximately 86% of open pit production tonnage is classified as measured or indicated mineral resources
- Mining strip ratio of 0.3:1 (waste:production)
- LoM average gold and silver heap leach recoveries of 67% and 57% respectively
- Initial capital cost of $97.3 million, which includes $16.2 million in contingency costs
- Pre-tax payback of 23 months
- Net pre-tax cashflow of $105 million
- Pre-tax internal rate of return (IRR) of 27%
- Pre-tax net present value (NPV) at a 5% discount rate of $69.1 million
- Total cash operating cost (net of silver credits) of $842 per ounce gold
- After-tax payback of 30 months
- Net after-tax cashflow of $76.9 million
- After-tax IRR of 21%
- After-tax NPV at a 5% discount rate of $47.3 million
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Reprinted by permission of MINING.com