Spanish Mountain PEA lifts both NPV and capex
Spanish Mountain Gold Ltd. (TSXV: SPA) has unveiled an updated Preliminary Economic Assessment (PEA) for its Spanish Mountain gold project in British Columbia, revealing significant revisions that increase both the project’s Net Present Value (NPV) and capital expenditures (capex). The revised study outlines a more robust economic outlook while also reflecting the rising costs and expanded scope of development.
The updated PEA estimates a pre-tax NPV of C$1.2 billion at a 5% discount rate, a substantial increase from the previous C$655 million reported in the 2021 PEA. After-tax NPV now stands at approximately C$860 million, with an internal rate of return (IRR) of 24%, signaling strong potential returns for investors even amid higher upfront costs.
Capex for the project has risen to C$840 million, up from the earlier estimate of C$607 million. The company attributes the increase primarily to expanded infrastructure plans, higher construction and materials costs, and a revised mine plan aimed at maximizing long-term value.
"We believe the updated PEA reflects the true scale and potential of the Spanish Mountain project," said Larry Yau, CEO of Spanish Mountain Gold. "While capex has increased, the stronger project economics and extended mine life more than justify the investment. This is a major step forward in derisking and advancing the project toward a construction decision."
Highlights of the Updated PEA:
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Life of Mine (LOM): 18 years, with average annual production of 180,000 ounces of gold during the first decade.
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Average Cash Costs: US$740/oz, and All-In Sustaining Costs (AISC) of US$980/oz.
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Gold Price Assumption: US$1,850/oz, with sensitivity analyses at varying price points showing robust economics.
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Measured & Indicated Resources: 4.7 million ounces of gold, with additional inferred resources offering exploration upside.
Located in a mining-friendly jurisdiction with access to infrastructure and a relatively low environmental footprint, the Spanish Mountain project has long been considered one of the more advanced undeveloped gold assets in Canada. The updated PEA enhances its status as a feasible, long-life, mid-tier gold operation.
Spanish Mountain Gold plans to continue de-risking the project through further technical studies, community engagement, and permitting activities, with a Prefeasibility Study (PFS) targeted for 2026.
Investors responded positively to the update, with Spanish Mountain Gold shares rising over 12% on the TSX Venture Exchange following the announcement.
