Meridian Mining Reports $2.09bn NPV for Cabaçal Project
Cabaçal’s definitive feasibility study shows a 108% IRR and sub-one-year payback, driving US$413.8m in annual free cash flow.
Key points
- Cabaçal achieves a US$2.09bn after-tax NPV and 108% IRR, with a payback period under one year.
- The mine is projected to generate US$413.8m in average annual after-tax free cash flow over the first five years.
- Initial capital expenditure is US$322m, and Meridian is engaging with 30 lenders while equipment procurement starts.
Meridian Mining Plc has finalized the definitive feasibility study for its Cabaçal gold-copper-silver project in Brazil. The analysis yields an after-tax net present value of US$2.09 billion and an internal rate of return of 108%. The project achieves a payback period of less than one year under the base case scenario.
These figures rely on commodity assumptions of US$3,570 per ounce for gold, US$5.03 per pound for copper, and US$50.17 per ounce for silver. Life-of-mine revenue is projected at US$5.36 billion, with after-tax free cash flow totaling US$2.87 billion. If spot prices are used, the NPV at a 5% discount rate rises to US$2.90 billion and the IRR reaches 135%.
Production costs and cash flow
Initial capital expenditure is estimated at US$322 million, plus an additional US$56 million for expansion. Over the first five years, the mine is forecast to produce an average of 183,526 gold-equivalent ounces annually. All-in sustaining costs are set at US$715 per ounce.
This production profile generates an average annual after-tax free cash flow of US$413.8 million. Chief Executive Gilbert Clark stated the economics positions Cabaçal as a near-term development candidate for the global market. The company is already executing preconstruction investments to support this timeline.
Financing and regulatory progress
Meridian has opened a data room for lenders and engaged with up to 30 potential lending groups. The primary Installation Licence application is currently under regulatory review. Procurement of long-lead equipment has already begun to align with the development schedule.
The company is moving from study to construction phases without delay. As reported by Yahoo! Finance Canada, the financial metrics support the immediate capital raising and operational steps currently underway.
