Fredonia Mining Inc. (TSXV: FRED) has completed a preliminary economic assessment and updated mineral resource estimate for its El Dorado Monserrat gold-silver project in Santa Cruz Province, Argentina.
The study outlines average production of approximately 146,000 ounces of gold equivalent annually over a mine life exceeding 17 years. Production during the first five years would average approximately 183,000 ounces AuEq annually.
The project remains at the preliminary assessment stage. Fredonia has not declared mineral reserves or made a construction decision.
PEA Estimates US$1.49 Billion NPV
The PEA contemplates conventional open-pit, truck-and-shovel mining followed by two forms of heap-leach processing.
Higher-grade material would be crushed and agglomerated at a planned processing rate of 7.3 million tonnes annually. Intermediate-grade material would be placed on a separate uncrushed run-of-mine leach pad at a planned rate of approximately 2.8 million tonnes annually.
Fredonia estimates initial capital of approximately US$346 million and a life-of-mine cash cost of US$1,632 per ounce AuEq.
Using its base-case assumptions, the study estimates a post-tax net present value of US$1.49 billion at a 10% discount rate and a post-tax internal rate of return of 65%.
Those figures are projections rather than demonstrated operating results.
Updated Resource Reaches 3.85 Million Ounces AuEq
The updated estimate contains 126.45 million tonnes of measured and indicated resources grading 0.68 grams per tonne AuEq. That represents approximately 2.76 million ounces AuEq.
A separate inferred resource contains 73.89 million tonnes grading 0.46 g/t AuEq, representing approximately 1.09 million ounces.
The estimate incorporates the Main Veins, La Herradura and Monserrat West deposits. The current PEA mine plan includes Main Veins and La Herradura but excludes Monserrat West because of its higher estimated strip ratio.
Approximately 35.6% of the scheduled process-plant feed is classified as inferred. Inferred resources carry greater geological uncertainty and cannot be treated as mineral reserves.
Metal Prices and Recoveries Remain Key Assumptions
The PEA’s mine-planning and economic calculations assume gold at US$3,800 an ounce and silver at US$45 an ounce. Actual project economics could change materially if metal prices differ from those assumptions.
Fredonia assumed gold and silver recoveries of 85% and 70%, respectively, for crushed and agglomerated material. The separate run-of-mine leach pad assumes recoveries of 50% for gold and 20% for silver.
Those recovery assumptions are based on initial bottle-roll testing, benchmarking and expert judgment. Fredonia said additional representative metallurgical testing is required.
The secondary AuEq figures used to report the mineral resource apply different assumptions: US$4,000 gold, US$70 silver, 85% gold recovery and 80% silver recovery. The company cautioned that resource AuEq does not represent recovered or payable metal.
Additional Studies Planned for 2027
Fredonia plans to continue infill and exploration drilling beginning in September. Metallurgical, geotechnical, hydrological and environmental work is also planned to support further project evaluation and permitting activities.
The company expects to conduct pre-feasibility and feasibility-level studies during 2027 before considering a final investment decision and construction.
A supporting NI 43-101 technical report is expected to be filed within 45 days of the PEA announcement. Until additional engineering, metallurgical, environmental and economic work is completed, the proposed mine plan, costs, recoveries and production schedule remain preliminary.
Sources
- Fredonia Mining Announces PEA and Updated Resource for EDM
- Fredonia Mining — El Dorado Monserrat Project
- Fredonia Mining Advances EDM PEA and District Position
Editorial Disclosure
This article is based entirely on publicly available information, including company disclosures and publicly available technical information. It discusses Fredonia Mining Inc. (TSXV: FRED). Mining Markets Report has not received compensation from Fredonia Mining, its management, investor-relations representatives or any third party for this specific article. Mining Markets Report may have current or past paid business relationships with other companies, which do not influence the content or conclusions of this article.
The author and publisher do not hold securities in Fredonia Mining Inc. as of the publication date.
Statements concerning production, mine life, capital costs, operating costs, recoveries, project economics, drilling, permitting, additional studies and development timing are forward-looking and remain subject to geological, metallurgical, technical, regulatory, financing, construction, operating and commodity-price risks.
The PEA is preliminary and includes inferred mineral resources considered too speculative geologically to support the economic conclusions normally associated with mineral reserves. No mineral reserves have been declared, and there is no certainty that the PEA will be realized.
Exploration and development-stage mining securities are speculative and carry a risk of capital loss. This article is provided for informational and educational purposes only and does not constitute financial or investment advice. Readers should conduct their own due diligence and consult a qualified financial professional. Please review the full Mining Markets Report disclaimer.
