Falco can Produce Gold for $660
Falco Resources just released an absurd PEA on their Horne 5 gold project in Quebec, Canada. The deposit has sat idle for 40 years after having produced over 11 million ounces of gold and 2.5 billion pounds of copper.
The PEA calls for a mine life of 12 years producing a total of 4.8 million ounces of gold equivalent at an all in cost of $660 per ounce. The PEA shows an after tax NPV of $667 million CAD. That compares to a total market cap today of $63 million.
The Capex is not cheap at $905 million but the operating margins of 66% are excellent. Those margins are using a conservative $1250 price for gold USD and give the project a 16% ROI. The actual gold produced per year for the 12 years is determined to be about 236,000 ounces yearly.
Falco says that they intend an aggressive drill program to add ounces to the resources. With a 66% operating margin the ROI will go up a lot with any increase in mine life to spread the initial Capex over.
If you believe that gold has bottomed, Falco offers a solid pre-production story highly leveraged to the price of gold. The company intends to commission the mine and mill in 2020 and achieve full production in 2021.
I don't own shares but Falco is an advertiser and naturally I am biased. Do your own due diligence. They have an excellent presentation here.