HCHDF - Hochschild Mining sees $900M up-front cost for Volcan gold project

2023-08-14 07:57:30 ET

Hochschild Mining ( OTCPK:HCHDY ) ( OTCQX:HCHDF ) said Monday it estimates the initial capital cost for its Volcan Gold Project in Chile will total $900M , with life-of-mine sustaining capital of $276M.

Hochschild's preliminary economic assessment detailed plans for a 22M metric tons/year open pit, heap leach operation with a 14-year mine life, producing an average of 332K oz/year of gold for the first 10 years of operations and 3.8M oz produced over the estimated mine life.

The miner said an economic analysis of the project shows pretax net present value discounted at 5% at $1.25B, an internal rate of return of 25% and payback at 3.4 years.

The project was dormant until early last year, when work was initiated to re-evaluate the project scope and social economics in the current gold price environment.

Hochschild ( OTCPK:HCHDY ) ( OTCQX:HCHDF ) has executed an agreement for a $15M financing with the sale of a 1.5% net smelter return royalty on the project to Franco-Nevada.

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