O3 MINING, PEA 2020-09-09

09/08/2020 (MT Newswires) -- O3 Mining (OIII.V), a mining and exploration company, was trading 0.84% lower on last look. Tuesday, it announced results from the independent preliminary economic assessment (PEA) for its Marban project located in Quebec.

The losses may reflect the fact that banks like National Bank of Canada are shifting its sector allocation this month to reflect a more cautious view due to Washington's failure to deploy additional coronavirus relief. The bank is trimming its exposure to energy, moving the sector from overweight to marketweight. Metals and mining excluding gold and containers & packaging are also downgraded from overweight to market-weight.

For its part, 03 forecasts the after-tax internal rate of return at 25.2% and an after-tax net present value (discount rate 5%) at $423 million, for the project, with an after-tax payback period 4.0 years.

O3 Mining confirmed the "PEA supports an 11,000 tonnes per day open pit project with production spanning 15.2 years with robust economics at a US$1,450/oz gold price, with very attractive cash costs and AISC, low CAPEX and low capital intensity."

The company expects to target annual production in excess of 130,000 ounces of gold with a peak of 161,000 ounces in year nine. O3 Mining said the Marban project is located in Quebec's Val D'Or region which is ranked the fourth-best mining jurisdiction in the world and one that has produced over 30 million ounces of gold to date.

O3 confirmed the total pre-production capital costs for the project are forecast at $256 million which includes allowances for indirect costs and contingencies amounting to a total of $55.1 million. It expects capital costs at $199 million with operating costs of $28.2 per tonne milled.

Price: 2.35, Change: -0.02, Percent Change: -0.84