Centerra surges on PEA valuing Kemess gold-copper project at $1.1B

Centerra Gold (TSX: CG; NYSE: CGAU) shares skyrocketed to a historical high Tuesday after an initial financial evaluation (PEA) valued the firm’s Kemess copper-gold job in British Columbia at $1.1 billion while improving consisted of steel by greater than 30%.

That base situation post-tax internet existing worth (at a 5% discount rate) features an interior price of return (IRR) of 16.4%, Centerra stated Tuesday. First resources prices for the past-producing open pit and below ground mine, which lies in the Toodoggone area of north-central BC, overall $771 million. Kemess has to do with 250 kilometres northeast of Smithers.

” Kemess is a fairly reduced resources strength, long-life possession that supplies appealing business economics and includes essential mass/growth to Centerra’s North American profile together with the front runner Mt Milligan copper-gold procedures,” BMO Funding Markets expert Raj Ray stated in a note on Tuesday. Based upon the PEA results, Ray raised the target rate for Centerra shares to C$ 32 each from C$ 20.

Mid-tier in BC

Centerra shares rose 8% to C$ 25.16 each on Tuesday early morning in Toronto, valuing the firm at C$ 5 billion ($ 3.6 billion).

The PEA for Kemess places it amongst BC’s mid to upper-tier gold-copper advancement jobs by business economics and source dimension, equivalent to Northisle Copper and Gold’s (TSXV: NCX) North Island job and Taseko Mines (TSX: TKO; NYSE-A: TGB) Yellowhead job.

When considering area asset costs of $4,500 per oz. gold and $6 per pound. copper, the PEA practically triples Kemess’ NPV to $2.7 billion. The IRR enhances to 29%.

Manufacturing at Kemess is secured at 2.3 million oz. gold and 851 million pound. copper over the mine’s 15-year life.

Resources expand

The research study raises shown sources concerning 27% to 244.4 million over the previous update from last May, at a quality of 0.42 gram gold per tonne and 0.21% copper for 3.2 million oz. of consisted of gold and 1.1 million pound. copper. Presumed sources are 77% greater at 299.6 million tonnes rating 0.37 gram gold and 0.19% copper for 3.5 million oz. gold and 1.2 million pound. copper.

” The research study improves a considerable mineral endowment, laying out a de-risked reboot strategy that leverages considerable existing framework and utilizes an incorporated advancement approach based upon traditional open pit and longhole open quiting below ground mining procedure,” Centerra chief executive officer Paul Tomory stated in the launch.

The job might end up being Centerra’s 2nd long-life gold-copper possession in the district, enhancing Mt Milligan even more southern and reinforcing the firm’s existence in the potential Toodoggone area, Tomory included.

Kemess began as an open pit gold-copper mine in 1998 under Royal Oak Mines, after that quit a year later on when the firm declared bankruptcy. Northgate Minerals got the website in 1999 and ran it till 2011 when the ore was extracted out. It generated 3 million oz. of gold and 800 million pound. copper in overall.