- Erdene Resource (ERD) has released its long-awaited independent feasibility study for the Bayan Khundii gold project in Mongolia
- The study outlines an open-pit operation with a base case after-tax net present value of approximately C$130 million and an internal rate of return around 42 per cent
- On the resources side, the project is currently estimated to contain around 521,000 indicated ounces of gold at 3.16 grams per tonne and 103,000 inferred ounces at 3.68 grams per tonne
- While the study is now complete, the company is still currently performing an 18,000-metre drill program to further outline the newly discovered Dark Horse prospect
- Erdene Resources is down 3.85 per cent and is trading at 50 cents per share
Erdene Resource (ERD) has released its long-awaited independent feasibility study for the Bayan Khundii gold project in Mongolia.
The study outlines an open-pit operation at the project, with a base case after-tax net present value of approximately C$130 million and an internal rate of return around 42 per cent.
However, when factoring in the recent gold price hike and assuming a per ounce price of around $2612.44 per ounce, the internal rate of return reaches 93 per cent and the net present value jumps to $274 million.
On the resources side, the project is currently estimated to contain around 521,000 indicated ounces of gold at 3.16 grams per tonne and 103,000 inferred ounces at 3.68 grams per tonne.
Peter Akerley Erdene’s President and CEO commented on the long-awaited study.
“The Bayan Khundii feasibility study results confirm the robust returns of this project in its base case, and the significant upside from ongoing district-wide exploration and rising gold prices.
“As a low-capex, low-opex project within an emerging gold district, Bayan Khundii offers investors and stakeholders strong leverage to gold as we seek to grow the resource base and move towards the goal of first production in early 2022,” he said.
While the study is now complete, the company is still currently performing an 18,000-metre drill program at the site. The program is exploring the recently discovered Dark Horse prospect, which Peter hopes could significantly add to the site’s overall resource estimate.
Turning the projects financial position, Erdene recently closed a C$20 million private placement, which wasled, in part, by notable precious metals investor Eric Sprott. With that investment now secured, the company believes the project’s funding is within sight.
Erdene Resources is down 3.85 per cent and is trading at 50 cents per share at 11:25am EDT.