Transcription
[Music] Good day, ladies and gentlemen. This is a company update from Cisco Development on Commodity TV. Big bang for a Cisco development.
The company announced an optimized feasibility study for the approved Caribou project. The feasibility study 2025 confirms strong economics for a low-impact underground operation using mechanized bulk mining methods with attractive operating costs, manageable capital requirements, and a position well-suited to take advantage of favorable macroeconomic and gold price trends. The processing facilities have been designed to accommodate potential future throughput expansions.
A formal positive final investment decision, as well as securing a project financing package in the coming months, would allow for certain construction work to commence in the second half of this year already and for the project to be completed by the end of 2027, so they could start mining.
The Caribou gold project is planned as a traditional underground operating operation using mechanized open pit longhole mining to extract ore from gold-bearing vein corridors, an intricate network of mineralized quartz veins that occur predominantly in unmineralized sandstone. An improved flowsheet from the visibility study 2023, supported by additional methodological test work or viz or processing to be carried out exclusively at the minesite complex, would produce saleable gold array from a gravity concentrate and 66 tons per day of high-grade flotation concentrate averaging 133 g per ton gold. The flotation concentrate would be trucked to the port of Vancouver where it would be sold to a smelter partner.
The base case gold price of $2,400 results in an NPV with a 5% discount of 943 million Canadian dollars. The amortization period is 2.8 years, and the IRRa is 22.1%. The AIC is expected to be $1,157 gold per ounce gold only. That is super costs. Assuming a spot price of $3,300, the NPV with a 5% discount is over 2 billion Canadian dollars, and the amortization is only 1.6 years. The IRR rises to a fantastic 38%.
The 2025 feasibility study includes several key improvements and risk mitigation initiatives over the 2023 feasibility study that better position the project in terms of execution, financing, and operations. Notable changes include no single-phase construction and direct ramp-up to rated capacity of 4,900 tons per day, increasing the average life of mine gold production profile by 16% to 190,000 ounces per year, and 202,000 ounces per year in the first 5 years. The construction of a single mill at the mine site eliminates the need to transport the flotation concentrate 116 km to the QR mill. This reduces capital and operating costs by consolidating operations in one location. The average drift size has been increased by 60% compared to the feasibility study 2023, significantly reducing the total number of drifts required to achieve average daily throughput. Optimization of the geotechnical design of the mine shafts, supported by the recent trial mining, allows for greater operational flexibility of the underground operation.
Probable mineral reserves remained largely unchanged, increasing slightly to over 2.71 million ounces gold with 17.8 million tons grading 3.62 g gold per ton. The project planning and sequencing visualized in the feasibility study 2025 is aligned with the BC Mines Act and Environmental Management Act permits received last in the last quarter of 2024. Total recovery from the project is expected to be a fantastic 92.6%.
The initial capital cost for the project is estimated at $881 million, while the life of mine sustaining capital cost is estimated at $525 million. The total cumulative capital cost for the life of mine is estimated to be $1.37 billion, excluding site reclamation and closure costs of $135 million and the estimated residual value of $36 million. The total capital cost estimate developed in this feasibility study 2025 is generally consistent with the AAC international class 3 requirements and includes a total of $72 million in contingency capital, representing approximately 16.5% of initial capital excluding underground mining costs.
Caribou is now taking shape, and the share price is clearly too cheap. We consider the low to have been reached, and the share price is crying out for a reversal formation. Initial price targets are $2.75, then $3.75, $5 Canadian, and $8 Canadian dollars. The share is a screaming buy.
You can also find all information on our commodity tab in German and English, as well as everything to do with commodities. Please note the disclaimer. The share discussed is part of the SRC mining special situation certificate, and I'm a shareholder in this company. Thanks for watching, and bye-bye from Switzerland.