G Mining sees improved economics at Guyana gold project

Canada’s G Mining Ventures (TSX: GMIN) said a new feasibility study for its Oko West project in northern Guyana demonstrates improved economics compared with initial calculations released last year.

At a 5% discount rate, Oko West would generate a post-tax net present value (NPV) of $2.2 billion and a post-tax internal rate of return (IRR) of 27%, G Mining said Tuesday in a statement. That’s a 58% improvement in NPV compared with the preliminary economic assessment that the company issued last September.

Oko West is one of two projects that G Mining is counting on to anchor future output. The other, Brazil’s Tocantinzinho, started producing gold in September, with the company already booking cash flow.

The feasibility study “marks a major milestone in realizing the value of what we consider one of the world’s most exciting undeveloped gold projects,” G Mining CEO Louis-Pierre Gignac said in the statement. “It confirms a long-life, high-margin operation with strong economics, supported by a proven resource and solid infrastructure.”

G Mining is among several miners focusing on the Guiana Shield. Others include Canadian explorer Greenheart Gold (TSXV: GHRT), which has amassed a portfolio of early-stage projects in Guyana and Suriname. Founders Metals (TSXV: FDR), also Canadian, is exploring at its Antino project in southeast Suriname. The shield also hosts Newmont’s (TSX: NGT) Merian and Zijin Mining’s Rosebel gold mines, both in Suriname.

Shares of G Mining rose 1.4% to C$19.48 in Tuesday morning trading in Toronto. That gave the company a market value of about C$4.4 billion.

The company anticipates that authorities will issue a final environmental permit this quarter, and that a construction decision will be taken in the second half.

2027 target

Construction is forecast to take 34 months, G Mining said. Commissioning would occur in the fourth quarter of 2027.

G Mining envisions a payback period of 2.9 years if gold averages $2,500 per ounce. Initial capital expenditures are projected to be $972 million, a 4% increase from the $936 million that was estimated back in September.

Assuming an average gold price of $3,000 per oz., Oko West’s after-tax NPV would rise to $3.2 billion, G Mining said Tuesday. The IRR would climb to 35% and the payback period would be 2.1 years.

Located about 120 km southwest of Guyana’s capital Georgetown, Oko West will integrate both conventional open pit mining and mechanized long-hole open stoping for the underground mine.

Total gold output will probably be 4.3 million oz. over 12.3 years, G Mining said. That works out to an annual average of 350,000 oz. at an all-in sustaining cost of $1,123 per ounce.

During the first three years of commercial production, the open pit will solely supply the processing feed. Underground mining will start to contribute to processing feed in the fourth year of production.

Some 1,270 direct permanent jobs will be created by the project, according to the company.