Unigold considering Candelones oxide project as stand-alone operation following positive PEA

Unigold Inc (CVE:UGD) (OTCQX:UGDIF) (FRA:UGD1), the Dominican Republic-focused gold explorer, has published a preliminary economic assessment (PEA) for its wholly-owned Candelones oxide asset, which, it said, showed compelling enough economics to consider the project as a stand-alone operation. 

Initial capital expenditure (Capex) was pegged at US$36 million, while the average annual after-tax free cash flow was put at US$23 million, and the pre-tax internal rate of return (IRR) at 50%. 

READ: Unigold hits high grade mineralization within 100 metres of surface at Dominican Republic asset

This oxide operation would provide near-term cash flow as the company continues to expand and evaluate the larger sulphide resource, which it reckons offers a longer-term development opportunity, noted Unigold.

“The company will move to rapidly develop both projects over the next few years as it concurrently moves the oxide project through required community consultation, environmental studies, detailed engineering and permitting while completing metallurgy, preliminary design and market studies for the sulphide project,” said CEO and chairman Joseph Hamilton.

“Recent exploration drilling at the Candelones Extension identified additional potential for oxide resource expansion to the east of the known deposit while continuing to expand the available sulphide resource.”

He added: “The company intends to transition directly into a feasibility study on the oxide project as soon as possible. Additional oxide material has been collected and is being shipped to Canada for large diameter, run of mine column tests to confirm the recovery assumptions used in the PEA. We are targeting the end of 2021 to have all materials and studies assembled to allow the Government to proceed with permitting of this project.”

The PEA showed a pre-tax net present value (NPV) of US$50 million, based on average annual payable gold production of 31,000 ounces (oz) with all-in-sustaining costs (AISC) of US$744 per oz gold.

Unigold also highlighted that the resource mined in the PEA included inferred resources, which account for around 27% to the life of mine production schedule.

The company said it aimed to complete the additional drilling recommended by lead consultant, Micon, to rapidly upgrade the inferred resource to the higher confidence measured and indicated status so it can be included in the planned feasibility study.

The Candelones project is within the group’s Neita concession and lies south of the town of Restauraćion in the north-western Dajabon Province of the Dominican Republic in the Caribbean.

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