PEA Beats on Almost All Metrics
Here's some recent analysis from Daniel Earle:
Continental Gold released the results of the much-anticipated Preliminary Economic Assessment (PEA) for its Buriticá gold project (100%) last night.
The PEA represents the first engineering/economic study for the multi-million ounce, high grade, gold project and is a major milestone in its ongoing advancement, in Daniel Earle's view
The study details what Daniel Earle views as a robust gold project at current gold prices, with almost all of the key metrics beating his expectations
Daniel Earle had forecasted a mine plan of 4.5 Moz at 7.5 g/t producing 242 koz at US$625/oz cash costs – the study came in at 4.8 Moz at 7.8 g/t with annual production of 265 koz at US431/oz cash costs, with the higher production coming from the combination of higher grades and throughput
At a gold price of US$1,200/oz, the PEA calculated an after-tax project NPV5% of US$1,080mm and a corresponding after-tax IRR of 31.5%. This was significantly ahead of Daniel Earle's calculated project NAV5% of US$680mm (calculated at US$1,250/oz)
Daniel Earle has raised his target price to $7.00 (from $6.00); he is maintaining his SPECULATIVE BUY recommendation
