GoldMining said that its fully-owned La Mina gold-copper project in Colombia will require a total capital cost (capex) of $618m, based on the findings of an updated preliminary economic assessment (PEA).

The capex includes a pre-production capital of about $425m to set up a processing facility with a capacity of 15,000 tonnes per day. The processing plant will be fed by a conventional truck and loader open pit mining operation.

There will also be sustaining capital and mine closure expenditures of nearly $193m, said GoldMining, a publicly listed junior resource company.

Colorado-based Resource Development Associate was engaged by the company to prepare the PEA for the Colombian gold-copper project.

The updated PEA integrates the recently discovered La Garrucha deposit into the mine plan.

GoldMining said that the La Mina project will have a total projected life of mine (LOM) production of about 1.74 million gold equivalent ounces averaging 143,100 ounces over the estimated 12-year life.

Located in the Department of Antioquia, the La Mina gold-copper project’s construction is anticipated to take around two years to complete.

GoldMining CEO Alastair Still said: “We are pleased to update our PEA on La Mina, demonstrating the value we have created through the exploration discovery made at La Garrucha, such that the combined project represents a significant deposit of gold and copper with an attractive head grade above 1.0 g/t gold equivalent.

“Deposits of this scale with exploration upside and robust economics are becoming increasingly scarce, and La Mina exemplifies our efforts to advance our portfolio of projects in the Americas to unlock value for our shareholders.”

The PEA estimates a post-tax net present value (NPV) of about $274m at base case commodity prices of $1,750 per ounce of gold, $21 per ounce of silver, and $3.5 per pound of copper.

Besides, it also projects a post-tax internal rate of return of 14.2% for the La Mina project with a payback period of 6.2 years.