Canada’s Eldorado Gold announces positive feasibility study for Romanian project

By bne IntelliNews May 29, 2015

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Canada-based Eldorado Gold has confirmed the feasibility of its Certej gold mining project in Romania, after announcing the results of a study led by an internal team with technical support provided by various Canadian and Romanian consultants. The mine is expected to start gold and silver production in 2018 and has a 15-year expected lifespan – out of which the ore refinery will process the stockpiled low-grade ore during the final two years.

The project is 80.5% controlled by Eldorado Gold through its Romanian subsidiary Deva Gold, with the remaining 19.5% held by the Romanian state through Minvest Deva company.

The mine is expected to generate over its lifetime an average annual production of 140,000 ounces (some 4 tonnes) of gold and 830,000 ounces (23.5 tonnes) of silver. The estimated total value of gold and silver at the site is $3.2bn. “The positive results of this study form the basis for Eldorado, together with our Romanian partners, to develop the Certej mine. Significant detailed engineering design and cost estimating provides for a high degree of confidence in the capital estimate and projected operating performance of the Certej project,” said Paul N. Wright, CEO of Eldorado Gold, in a press release.

Certeje is the smaller of the two gold mining projects being developed by Canadian companies in Romania. The more visible project, Rosia Montana, being developed by Canada’s Gabriel Resources, has been stalled for over a decade due to fierce protests led by environmentalists and civil organisations concerned about the environmental impact of the heavy use of cyanide in planned mining operations. It is yet to receive all of the necessary permits.

In contrast to Rosia Montana, the Certej project has prompted fewer public protests and received its environmental permits in 2012. The company still needs construction permits for the production facilities, before starting operations most likely in 2018.

The ore refining plant, offices and connections to the utilities will require an initial investment of €500mn and will take two to three years, Deva Gold manager Nicolae Stanca told Romanian daily Gandul.

The feasibility study projects a post-tax internal rate of return (IRR) of 13% and a net present value (NPV) at a 5% discount rate of $229mn. The gold price is assumed at $1,250/oz and silver price at $16.50/oz. Sensibility analysis shows that the IRR would hit 25% and NPV would reach $725mn if the gold price rises to $1,600/oz.

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