In This Article:
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Production Rate: 1,750 tons per day over a 10-year mine life.
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Diluted Grade: 5.5 g/t over the life of mine; 6.5 g/t in the first five years.
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Average Annual Production: Over 100,000 ounces per year; 124,000 ounces per year in the first five years.
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Total Gold Production: Over 1 million ounces over the life of mine; 620,000 ounces in the first five years.
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All-in Sustaining Cost: $807 per ounce; $739 per ounce in the first five years.
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CapEx: $229 million Canadian.
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Internal Rate of Return (IRR): 59.5% pretax; 40.2% after tax at $2,000 per ounce gold price.
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Net Present Value (NPV): $948 million pretax; $525 million after tax.
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Payback Period: 1.5 years pretax; 1.8 years after tax.
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Sustaining Capital: $238 million over the 10-year life of mine.
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Operating Expense (OpEx): $174 per ton milled; $807 per ounce.
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Gold Price Sensitivity: At $2,600 per ounce, pretax free cash flow increases to $2.2 billion; after-tax NPV increases to $914 million.
Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Amex Exploration Inc (AMXEF) reported a robust internal rate of return (IRR) of 59.5% pretax and 40.2% after tax at a gold price of $2000 per ounce.
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The project has a low all-in sustaining cost of $807 per ounce, with the first five years even lower at $739 per ounce.
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The mine plan includes a combination of open pit and underground mining, optimizing high-grade material extraction in the first half of production.
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The processing plant is designed to be a standalone operation with a proven and standard flow sheet, ensuring reliability and efficiency.
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The project demonstrates strong financial metrics with a payback period of 1.5 years pretax and 1.8 years after tax, highlighting quick capital recovery.
Negative Points
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The project requires a significant initial capital expenditure (CapEx) of $229 million Canadian, which could pose financial challenges.
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There is a 1.5% royalty on the project, which could impact overall profitability.
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The project is sensitive to fluctuations in the Canadian dollar and US dollar exchange rate, which could affect financial outcomes.
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The high-grade zones, while promising, still require further drilling to fully realize their potential, indicating ongoing exploration costs.
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Permitting and environmental approvals are still in progress, which could delay project timelines and add regulatory risks.
Q & A Highlights
Q: What Canadian dollar to US dollar exchange rate was assumed in the PEA? A: Victor Cantore, President & CEO: We assumed a rate of $1.35, staying conservative, though it's currently around $1.39. We did not conduct a sensitivity analysis on the AISC and NPV regarding exchange rate fluctuations.