Amarillo Gold - CEO, Mike Mutchler
CEO, Mike Mutchler
Sourced: Youtube (Metals Investor Forum)
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  • Amarillo Gold Corp (TSXV:AGC) has released its definitive feasibility study for the Posse gold project in Brazil 
  • The study outlines a net present value within the project of approximately $247.3 million 
  • A mine on the Posse deposit would have a life of 10 years and extract 900,000 ounces of gold over its lifecycle 
  • The cost per ounce over those 10 years is estimated at roughly $954, with an assumed sale price of approximately $1891 
  • Amarillo Gold (AGC) is down five per cent and is trading at 26 cents per share with a market cap of $50 million 

Amarillo Gold (TSXV:AGC) has revealed its definitive feasibility study on the Posse gold project at Mara Rosa property in Brazil.

The study supports an open pit and a carbon-in-leach operation at the site with dry stack tailings.

This type of gold production requires a particularly low amount of initial capital outlay and operational costs, whilst still returning solid production numbers.

The company feasibility study outlines a case whereby the gold price averages approximately C$1891 per ounce. Currently, the gold price is sitting on $2427 per ounce.

The study outlines a mine life of 10 years, with a net present value of approximately $247.3 million.

The study expects an average gold production per year of 102,000 ounces over the first four years, before going down to 84,000 ounces per year after that.

Amarillo has also projected a cash cost of  approximately $954 per ounce to produce, with a projected after tax payback of 2.6 years.

The resources estimate for Posse assumes 1.2 million contained ounces on the site, with reserves sitting at 902,000 ounces. 

Gold resources estimates are the total gold contained in a project, whilst gold reserves are what is economically viable for a company to take out of a project.

Amarillo CEO Mike Mutchler said he was pleased”the company had completed the important milestone in the development of the Posse project.

“We expect to receive our license to install in the third quarter of 2020 and complete our construction financing then as well.

“Our recently completed regional exploration program showed the potential to find more near-suface gold deposits, so we hope to extend our mine life in due course.

“With strong support from the Mara Rosa community, the Goias State Government and the Federal Government of Brazil, we are excited to build and operate the Posse gold project for the benefit of all our stakeholders,” he said.

The company expects to begin construction work on the Posse project in April 2021.

Amarillo Gold (AGC) is down five per cent and is trading at $0.26 per share at 3:00 pm EDT. 

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