Paramount Gold Nevada Corp. (PZG-NYSE American) said Tuesday the Federal Bureau of Land Management (BLM) has accepted the plan of operations for the proposed high-grade underground Grassy Mountain gold mine in eastern Oregon as complete.
With completeness, Paramount said the BLM will issue a notice of intent, thereby initiating the Environmental Impact Statement process under the National Environment Policy Act. The EIS is a comprehensive analysis of the impact of the proposed mine on the environment. The EIS culminates in the Record of Decision that sets out the BLM’s decision regarding the proposed mining operations.
“Our ongoing collaboration with the BLM over several years has allowed us to achieve this permitting milestone which is a first for a gold mine and recovery facility in Oregon, and advances Grassy one step closer to a construction decision,’’ said Paramount Gold President Glen Van Treek.
Paramount is a spin-out of Coeur Mining Co.’s [CDE-NYSE] $200 million acquisition of Paramount Gold and Silver, in April 2015. With a focus on gold assets in the United States, the company is backed by a shareholder group that includes Seabridge Gold Co. [SEA-TSX] with an 8% interest.
On October 29, 2020, the company filed a NI-43-101 technical report containing a feasibility study for a proposed high-grade underground mining operation at Grassy Mountain. The base case scenario gold and silver prices used in the study were US$1,472 an ounce and US$16.64 respectively.
At that time proven and probable reserves stood at 390,000 ounces of gold and 425,000 ounces of silver.
The feasibility study envisages initial capital expenditure of US$97.5 million, US$10.1 million of estimated contingencies, US$25.6 million of sustaining CapEx and US$6.3 million closure costs for a 750 tonne per day mine and milling operation.
The study forsees annual production of approximately 47,000 ounces of gold and 55,000 ounces of silver over an eight-year mine life with a 3.1-year after-tax payback period.
The life of mine all-in-sustaining cost is estimated at US$672 an ounce of gold, delivering total after-tax free cash flow of US$165 million.
“The PFS clearly shows that Grassy Mountain is a mine worth building,” said
Van Treek has said a May, 2018 pre-feasibility study indicated that Grassy Mountain is a “mine worth building.’’ He said it demonstrated that a low-cost operation would deliver exceptional cash-flows over its mine life. “The scale and simplicity of the proposed operation is one that we are very confident Paramount can build and manage.”
Van Treek said the PFS also identified significant opportunities for improving project economics and finding more ore to extend mine life.
On November 28, 2022, Paramount Gold shares closed at US$0.34 and currently trade in a 52-week range of US$1.10 and US$0.28.