Recent technical work on the Cerro Caliche project in Sonora, Mexico, comprises a new Mineral Resource Estimate (MRE) and an expanded Preliminary Economic Assessment (PEA) prepared by P&E Mining Consultants Inc. The studies model a conventional open‑pit heap‑leach operation that ramps from 12,000 to 16,000 t/d and evaluates a 10‑year production profile. Updated drilling, geology, pit optimization and metallurgical testwork were folded into the block models and mine designs that underpin the PEA’s economics and risk tables.
The technical package at a glance
– Mining route: Open pit with heap‑leach processing.
– Production: Staged ramp from 12,000 to 16,000 t/d; 10‑year life of mine (LOM).
– Resource model: 3D block model (5 × 5 × 5 m blocks), ID3 interpolation, optimized pit shell, cut‑off ~0.13 g/t AuEq.
– Recoveries used in the model: ~72% for gold, ~27% for silver.
– Key inventories: Measured + Indicated ~51.8 Mt at ~0.39 g/t AuEq (~644 koz AuEq); Inferred ~8.8 Mt at ~0.34 g/t AuEq.
– Initial capex (incl. 15% contingency): ~$83M; sustaining capex: ~$26M; LOM operating cost ~ $820M (~$15.54/t processed).
– Unit costs: Cash operating cost ~ $1,842/oz AuEq; AISC ~ $1,902/oz AuEq.
– Base economic case (metal prices $3,500/oz Au, $48/oz Ag): after‑tax NPV8 = $224M; after‑tax IRR = 50%.
– Spot‑price case (approx. $5,186/oz Au, $88/oz Ag): pre‑tax NPV8 = $846M (after‑tax NPV8 = $525M); IRR improves markedly.
What the studies did and how they were built
The updated PEA grew out of fresh drilling campaigns combined with re‑logging of legacy holes. Geologists revised the lithology and alteration models, rebuilt block models, and ran multiple pit‑shell optimizations using varied metal prices, recoveries and cost inputs. Mine plans and staged production schedules flowed from those optimized shells.
Metallurgical testwork targeted heap‑leach recoveries and fed into the financial model, though some detailed recovery curves and variability analyses are lodged in appendices rather than in investor summaries. Financial projections use an 8% real discount rate and include corporate taxes and royalties to produce the after‑tax figures cited.
Who contributed
P&E Mining Consultants led the technical studies, supported by the operator’s in‑house geological database and a mix of third‑party specialists: metallurgical labs, geostatisticians, engineering and cost‑estimating consultants, and independent reviewers. Qualified persons have signed off on the resource and PEA parameters in accordance with reporting rules. Responsibility for discrete inputs—mine design, process, permitting and community engagement—rests with defined internal teams and external advisers listed in the technical appendices.
Production profile and recoveries — why they matter
The model assumes a 10‑year LOM producing roughly 459 koz AuEq total (≈46 koz AuEq/year), from an average feed grade near 0.38 g/t AuEq. Those outputs hinge on the assumed recoveries: 72% for gold and 27% for silver. Given the relatively modest recoveries—especially for silver—the revenue and cash‑flow profile is sensitive to metallurgical performance. Limited disclosure in the summary leaves questions about recovery variability across ore types; confirmatory testwork will be critical.
Resource inventory and modelling approach
The MRE used a 5 × 5 × 5 m block model populated with assays from surface‑collared drill holes (generally to ~125 m depth, some to ~200 m). Interpolation used Inverse Distance Cubed (ID3) and was validated with visual checks and statistical comparisons. Classification applied distance‑based criteria, and an a posteriori selection removed isolated blocks to form coherent, mineable volumes reported at a 0.13 g/t AuEq cut‑off.
Economic results and sensitivity
The PEA presents both a conservative base case and a spot‑price scenario. Under the base case the after‑tax NPV8 is $224M with an IRR of 50% (pre‑tax NPV8 = $360M; IRR = 65%). Applying current spot prices raises pre‑tax NPV8 to $846M and pre‑tax IRR to 121% (after tax: NPV8 ≈ $525M; IRR ≈ 91%). Sensitivity testing shows project value reacts most strongly to metal prices, then to recoveries and throughput; moderate changes in operating or capital costs have a smaller but still meaningful impact.
Capital, costs and payback
Initial capital is estimated at $83M (including 15% contingency) and is focused on a crushing/conveying circuit and pre‑stripping. Sustaining capex is roughly $26M; life‑of‑mine operating costs total about $820M (≈$15.54/t processed). Payback in the base case is around 1.7 years from commercial production. The PEA’s cash‑flow model links monthly production schedules to cumulative capital deployment and assumes uninterrupted commissioning to reach commercial rates.
Risks and upside
Primary technical risks include metallurgical recovery variability and the degree to which actual operating costs and capital spend track estimates. Commodity price volatility remains a major value driver: higher gold/silver prices produce substantially improved economics. On the upside, ongoing exploration—both infill and step‑out—could extend mine life or support higher throughput if successful. The concession area has recently been expanded, and only a fraction of identified mineralized zones have been fully tested, leaving exploration upside that could materially improve metrics.
The technical package at a glance
– Mining route: Open pit with heap‑leach processing.
– Production: Staged ramp from 12,000 to 16,000 t/d; 10‑year life of mine (LOM).
– Resource model: 3D block model (5 × 5 × 5 m blocks), ID3 interpolation, optimized pit shell, cut‑off ~0.13 g/t AuEq.
– Recoveries used in the model: ~72% for gold, ~27% for silver.
– Key inventories: Measured + Indicated ~51.8 Mt at ~0.39 g/t AuEq (~644 koz AuEq); Inferred ~8.8 Mt at ~0.34 g/t AuEq.
– Initial capex (incl. 15% contingency): ~$83M; sustaining capex: ~$26M; LOM operating cost ~ $820M (~$15.54/t processed).
– Unit costs: Cash operating cost ~ $1,842/oz AuEq; AISC ~ $1,902/oz AuEq.
– Base economic case (metal prices $3,500/oz Au, $48/oz Ag): after‑tax NPV8 = $224M; after‑tax IRR = 50%.
– Spot‑price case (approx. $5,186/oz Au, $88/oz Ag): pre‑tax NPV8 = $846M (after‑tax NPV8 = $525M); IRR improves markedly.0
The technical package at a glance
– Mining route: Open pit with heap‑leach processing.
– Production: Staged ramp from 12,000 to 16,000 t/d; 10‑year life of mine (LOM).
– Resource model: 3D block model (5 × 5 × 5 m blocks), ID3 interpolation, optimized pit shell, cut‑off ~0.13 g/t AuEq.
– Recoveries used in the model: ~72% for gold, ~27% for silver.
– Key inventories: Measured + Indicated ~51.8 Mt at ~0.39 g/t AuEq (~644 koz AuEq); Inferred ~8.8 Mt at ~0.34 g/t AuEq.
– Initial capex (incl. 15% contingency): ~$83M; sustaining capex: ~$26M; LOM operating cost ~ $820M (~$15.54/t processed).
– Unit costs: Cash operating cost ~ $1,842/oz AuEq; AISC ~ $1,902/oz AuEq.
– Base economic case (metal prices $3,500/oz Au, $48/oz Ag): after‑tax NPV8 = $224M; after‑tax IRR = 50%.
– Spot‑price case (approx. $5,186/oz Au, $88/oz Ag): pre‑tax NPV8 = $846M (after‑tax NPV8 = $525M); IRR improves markedly.1
