Lumina Gold Corp. released the results of its preliminary economic assessment on June 9 for its flagship Cangrejos project in Ecuador, adding US$600 million of additional net present value to the project.

The assessment was managed by MTB Enterprises Inc. According to Lumina, the improvements shown since the company’s last PEA from 2018 come as a result of the additions of the Gran Bestia deposit, increased mineral resource definition and an improved process flow sheet.

The project is expected to have annual production of 366,000 ounces of gold over a 25-year mine life (seven years longer than in 2018) and will process 40,000 tonnes of ore per day in its first five years, with an expansion to 80,000 tonnes per day in year six. The combined Cangrejos and Gran Bestia deposits contain an indicated mineral resource of 10.4 million ounces of gold from 570.8 million tonnes of ore with an average grade of 0.73 grams per tonne, as well as an inferred resource of 6.7 million ounces from 500.4 million tonnes grading at 0.53 grams per tonne.

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Overall, the project is expected to have an after-tax net present value with a discount rate of five per cent of US$1.6 billion and average all-in sustaining costs of US$604 per ounce, assuming a gold price of US$1,4000 per ounce. Initial capital costs for mine development, infrastructure and equipment are estimated at US$1 billion, with another US$454 million slated for the process plant expansion.

In the company’s view, the results of the assessment are a positive development for a jurisdiction that has only recently become open to the prospect of mining.

“Cangrejos is an exceptional global gold deposit and one of the few of this scale that is 100 per cent controlled by an independent developer,” Lumina president and CEO Marshall Koval said. “Ecuador has made substantial progress in its mining sector with the successful commissioning of [Lundin Gold’s] Fruta del Norte and [Ecuacorriente’s] Mirador. Now the country will turn their focus to the next generation of development projects.”

If constructed, Cangrejos will be a large open-pit mine employing 652 full-time employees during the construction phase and between 718 and 970 employees during the production phase. The mine would also use a dry stack tailings storage method, which the company says would reduce operating costs, provide positive environmental and social benefits as well as reduce the footprint and the amount of water required for the operation.