Vancouver-headquartered B2Gold has unveiled a new preliminary economic assessment (PEA) for the Gramalote project, in Colombia, outlining a medium-scale operation that marks a shift from previous plans.

The new PEA envisions an openpit mine producing an average of 185 000 oz/y of gold over a 12.5-year lifespan. In the initial five years, the mine is expected to yield 234 000 oz/y at an all-in sustaining cost of $822/oz.

The Gramalote project, which was previously a joint venture with AngloGold Ashanti, is now solely owned by B2Gold following AngloGold’s exit in September last year. The departure came after an optimised feasibility study for a larger-scale operation did not meet AngloGold’s expectations.

B2Gold’s revised plan includes a 16 500 t/d processing plant, capable of handling up to six-million tonnes a year.

The project's preproduction capital requirement is estimated at $807-million, with an additional $364-million in sustaining capital over its life.

Financially, the PEA is based on a gold price of $2 200/oz for the first three years and a long-term price of $2 000/oz. Under these assumptions, the project has an aftertax net present value of $778-million and an internal rate of return of 20.6%, with a payback of 3.1 years.

The mineral resource estimate for the project that forms the basis for the PEA includes indicated mineral resources of 192.2-million tonnes grading 0.68 g/t gold for a total of 4.21-million ounces of gold and inferred mineral resources of 85.4-million tonnes grading 0.54 g/t gold for a total of 1.48-million ounces.

Following a positive PEA, B2Gold will progress to a feasibility study, targeted for completion by the middle of next year.

Owing to the work completed for previous studies, the work remaining to finalise a feasibility study for the updated medium-scale project is not extensive. The main work programme for the feasibility study includes geotechnical and environmental site investigations for the processing plant and waste dump footprints, as well as capital and operating cost estimates.

Owing to the desired modifications to the processing plant and infrastructure locations, a modified environment impact study (EIS) is required. B2Gold has started work on the modifications to the EIS and expects it to be completed and submitted shortly following the completion of the feasibility study.