Spanish Mountain Gold confirmed Tuesday it will do another Preliminary Economic Assessment(PEA).
“It was due at the end of October but may run into either the first or second week of November before it’s completed,” SMG communications manager Chris Clancy said.
There were a few reasons behind issuing a second PEA, Clancy explained.
“Yes mining costs have increased significantly since 2010, however, so too has the project’s ounces. In 2010, 1.9m ounces were used for the PEA. Today our global resource stands closer to 7m.”
The increase should have a significant impact on the economics and life of mine, Clancy said.
At the Cariboo Regional District board meeting Oct. 26, Area F director Joan Sorley told the board she’s been part of the Spanish Mountain Gold working group and was worried the decision by the company to reproduce its economic assessment might mean the prospects of the project are “not quite so promising.” Construction costs for the project have gone up 40 per cent, she added.
Clancy, however, said the company chose to reproduce a PEA because it would not have been able to achieve the amount of work necessary to produce a pre-feasibility study (PFS) in a timely fashion to the market. “The PEA allows us to produce updated economics using our complete resource without causing any delay in the timeline.”