Bravada Gold (BVA.V) has released the outcome of an updated Preliminary Economic Assessment on its flagship Wind Mountain gold asset in Nevada. As the first PEA was very underwhelming due to the short mine life and disappointing amount of gold produced and sold, it’s good to see the updated PEA is much better.
The new study still focuses on a small mine (with an anticipated average production of 40,700 ounces of gold and 280,000 ounces of silver per year, but with a low AISC of $1653 per ounce and an initial capex of just under US$100M, the NPV5% and IRR are attractive at US$415M and 60% on an after-tax basis using a gold price of $3600/oz. Applying $4500 gold to the model results in an NPV of US$681M (which is almost C$1B) with an IRR of 86% and a payback period of just 1.5 years.
The sensitivity analysis in the table above also clearly shows the project should work at lower metal prices as well. Even at $3000 gold and $40 silver the after-tax IRR comes in above 40%.
Disclosure: The author has no position in Bravada Gold. This post is for educational purposes only; be mindful investing in junior mining stocks is risky and you may lose your entire investment if things go wrong. Please read the disclaimer.
