Meridian Cabaçal DFS Shows US$2.09bn NPV
Meridian Mining reports a US$2.09 billion NPV for its Brazil project, with a 108% IRR and under one year payback.
Key points
- Cabaçal project delivers US$2.09bn after-tax NPV and 108% IRR.
- Initial capex is US$322 million with less than one year payback.
- First five years average 183,526 gold-equivalent ounces annually.
Meridian Mining Plc has released the definitive feasibility study for its Cabaçal gold-copper-silver project in Brazil. The study calculates an after-tax net present value of US$2.09 billion and an internal rate of return of 108%. This valuation is based on base-case commodity prices and assumes initial capital expenditure of US$322 million.
The project achieves a payback period of less than one year under the base case scenario. Life-of-mine revenue is projected at US$5.36 billion, while after-tax free cash flow totals US$2.87 billion. These figures are derived from gold at US$3,570 per ounce, copper at US$5.03 per pound, and silver at US$50.17 per ounce.
Base case economics and costs
Over the first five years of production, Cabaçal is forecast to generate an average of 183,526 gold-equivalent ounces annually. All-in sustaining costs are estimated at US$715 per ounce. The company expects average annual after-tax free cash flow of US$413.8 million during this initial period.
Sensitivity analysis shows that if spot prices are used, the NPV5 rises to US$2.90 billion. The internal rate of return increases to 135% under these higher price assumptions. Additional capital of US$56 million is allocated for future expansion phases beyond the initial build.
Project status and financing
Meridian has opened a data room for lenders and is engaging with up to 30 lending groups. The Installation Licence application is currently under review. Procurement of long-lead equipment has already begun, indicating preconstruction activity is underway.
Chief Executive Gilbert Clark stated that the economics position Cabaçal as a potential near-term vanadiferous massive sulfide mine. The company emphasizes that preconstruction investments are progressing on multiple fronts. This development path is detailed in the report covered by proactiveinvestors.com.
