Canagold soars on New Polaris feasibility results

[Redator]

Canagold Resources (TSX: CCM) surged on Monday after releasing results of a feasibility study for its New Polaris project in British Columbia, outlining a low-cost underground gold operation with total production of over 800,000 oz. over an 8.3-year life.

The estimated preproduction capital expenditures are C$250 million, while its all-in sustaining cost (AISC) over the life of mine is pegged at $1,247 per payable ounce of gold.

Under the base case gold price scenario of $2,500/oz., the project has a post-tax net present value (at 5% discount) of C$425 million, with an internal rate of return of 30.9% and payback period of 2.4 years. At a spot price of $3,300/oz., the NPV would nearly double to C$793 million, with a 47.3% IRR and shorter payback of 1.7 years.

“The feasibility study results demonstrate exceptional economics, low capex and low AISC for the New Polaris project,” Canagold’s chief executive officer Catalin Kilofliski stated in a news release. “Even at a $2,500 gold price, the projected cash flow and economics are outstanding.”

Shares of Canagold rose by double digits on the feasibility results, rising to as high as C$0.40 apiece — its highest in four years. By 1 p.m. ET, it traded at C$0.39 apiece, for a market capitalization of C$71.6 million.

Past producer

The New Polaris is situated 100 km south of Atlin, northwestern BC, and 60 km northeast of Juneau, Alaska, on the west bank of the Tulsequah River. It is the site of a past-producing mine that operated for two periods between 1938 and 1951. Then known as Polaris Taku, the mine produced 232,000 oz. gold from 691,000 tonnes of ore grading 11.9 grams per tonne.

After its closure, the mill was used to process gold for Cominco’s nearby deposit until 1957. By then, about 15,796 metres of underground development and 3,747 metres of raise development had been completed at New Polaris.

The site then lay dormant for 30 years until exploration resumed in 1988. Canagold acquired New Polaris in 1992 and has since drilled 241 holes totaling 64,000 metres of core, outlining significant new ore below and beyond the old mine workings.

As highlighted in the press release, the New Polaris project remains subject to regulatory approvals, including a consent decision by the Taku River Tlingit First Nation (TRTFN) and an environmental assessment certificate (EAC) issued by the British Columbia government.

Antimony potential

Also in Monday’s press release, the Canadian gold explorer noted the potential production of antimony from the New Polaris project, the economics of which were excluded from the feasibility study.

Antimony, a lesser-known metal, has risen in significance for its critical role in various high-tech industries such as defense, renewable energy and semiconductors.

Despite its widespread use, the production of antimony is heavily concentrated, with China controlling 80% of the world’s processing capacity. North America, meanwhile, has not had any mine production in years, and is at risk of being shut out from the global supply chain.

According to Canagold, its New Polaris project has recognized antimony presence since the early mining operations of the 1940s and 1950s. Currently, the deposit has 5,630 tonnes of antimony grading 0.6% in the indicated resource category. About 5,173 tonnes of the metal is included in the feasibility mine plans, it said.

To capitalize on the critical mineral, the company plans to advance several initiatives, including metallurgical tests for producing a high-grade antimony-gold concentrate and technical assessments evaluating the feasibility of refining antimony into high-purity metal prior to off-site gold refining.