Updated feasibility study confirms Falco's Horne 5 gold project as substantial cashflow opportunity
TSX-V-listed gold developer Falco Resources finds in an updated feasibility study on the Horne 5 gold project, in Québec, a new base case after-tax net present value (NPV) of $3.35-billion for the project, which is a 244% increase compared with the project's 2021 feasibility study.
Falco also outlines an after-tax internal rate of return (IRR) of 28.2% on the project, and a payback period of 3.3 years.
Using current spot prices, the after-tax NPV increases to $5.1-billion, or by 53%, the IRR widens to 37.2% and the payback period reduces to 2.6 years.
The base case economics used a gold price of $3 600/oz, a silver price of $50/oz, a copper price of $4.80/lb and a zinc price of $1.35/lb, while the spot case economics used a gold price of $4 500/oz, a silver price of $75/oz, a copper price of $6.40/lb and a zinc price of $1.60/lb.
The updated feasibility study reports Horne 5 can generate after-tax cashflow of $6.4-billion over its 15-year lifetime, which averages $542-million a year. The project can average yearly gold production of 220 300 oz.
The study also confirms low average all-in sustaining costs of $782/oz for the project, which would place it in the first quartile of low-cost gold producers globally.
Forward capital and pre-production costs are estimated at $1.75-billion.
Importantly, Falco says Horne 5 has the potential for further underground development, can contribute more than $4.4-billion in taxes and mining duties over its lifetime, and support up to 900 direct jobs during construction and 500 permanent jobs during operations.
"Horne 5 supports Québec's energy transition and economic decarbonisation through significant value-added critical and strategic minerals," says Falco president and CEO Luc Lessard.
He concludes that the updated feasibility study confirms Horne 5 as a large-scale and long-life gold project capable of generating substantial cashflow and strong returns for shareholders.
