Anaconda Mining releases PEA for Goldboro in Nova Scotia

Anaconda Mining (TSX: ANX; US-OTC: ANXGF) has released a preliminary economic assessment (PEA) for its 100%-owned Goldboro gold project in Nova Scotia, approximately 175 km northeast of Halifax.

The study envisions a 17.6-year open-pit and underground mining operation producing 1.95 million oz. of gold over its lifetime, with average production of 89,500 oz. per year over the first seven years from surface mining, increasing to an average annual production of 120,000 oz. in years eight to 18.

All-in sustaining costs are expected to be US$799 per oz. of gold over the life of the mine (life of mine operating costs of $68.92 per tonne milled).

Initial capital costs are estimated at $286 million, and can be paid back in just over three years. Sustaining capital costs over the mine life are pegged at US$269.2 million. At a gold price of US$1,550 per oz., the after-tax net present value (at a 5% discount rate), is estimated at $547 million, and the internal rate of return at 24.4%.

The PEA was based on an updated resource estimate of 16 million measured and indicated tonnes grading 3.78 grams gold per tonne for 2.1 million oz. contained gold and inferred resources of 5.3 million tonnes grading 4.68 grams gold for 875,630 gold ounces.

Anaconda is “undertaking a phased development approach which will initially focus on the surface mining phase of the mine plan,” Kevin Bullock, the company’s president and CEO, stated in a press release. A feasibility study on the surface mining portion of the project will be completed in the fourth quarter of this year.

Should a production decision on a surface mine be made, Anaconda will then commence the next phase of planning for underground mining, including infill and expansion drilling from drifts off benches in the open pit, allowing for more effective and less expensive diamond drilling. Pending those results, it would then consider a supplementary study focused on adding the underground mining phase to the project.

“Importantly, the Goldboro deposit is open in all directions and the company is initiating exploration to the west of the deposit towards the past-producing Dolliver Mountain gold mine,” said Bullock, adding that “Goldboro has potential to be a multi-generational gold mine, which can create significant value for our shareholders and project stakeholders, including the community of Guysborough and the Mi’kmaq of Nova Scotia.”

At press time in Toronto, Anaconda was trading at 93¢ per share within a 52-week trading range of 28¢ and $1.04. The company has about 163 million common shares outstanding for a $151.8 million market capitalization.