Prodigy Gold has received a positive preliminary economic assessment (PEA) to develop the former Magino underground gold mine near Wawa into an open pit.
The assessment indicates “strong economics” for a proposed open pit at the former mine property, which produced more than 105,000 ounces of gold when it was operated by Muscocho Explorations between 1988 and 1992.
The PEA identifies the average gold production is estimated to be 166,500 ounces annually over a nine-year mine life.
The start-up capital costs are estimated at $242 million with an additional $34 million in sustaining capital.
Prodigy's 1,600-hectare property is 40 kilometres northeast of Wawa, near the town of Dubreuilville.
Prodigy Gold president and CEO Brian Maher said the completion of the PEA represents a “major milestone” for the company and a project that shows “robust economics” with cash costs of $520 per ounce and a rapid payback of capital of less than two years.
Maher said infill drilling within the proposed open pit may improve the project economics even further.
“We view this PEA as a first pass analysis and look forward fine-tuning the operating and milling plan with a focus on lowering costs and increasing the resource base prior to completing a full feasibility study.
The company is looking at entering feasibility stage in the first quarter of 2012.
