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Aris Mining (TSX: ARIS) has been given approval by Corpocaldas, a regional environmental authority in Colombia, to expand its Marmato gold operations through the construction of a new underground mine.
In November 2022, Aris announced the results of a preliminary feasibility study (PFS) incorporating the Marmato Lower Mine expansion and a 57% increase in mineral reserves. At the base case $1,600/oz. gold price, the project’s net present value (using a 5% discount) is $341 million with an IRR of 30%.
The Lower Mine project, which is estimated to cost $280 million, includes the development of a new underground mine and a 4,000 tonne per day (tpd) ore processing facility to add to the 1,250 tpd Marmato Upper Mine.
The Marmato Lower Mine, says Aris, will provide access to the wider porphyry mineralization below the currently operating Upper Mine, which allows for bulk mining methods underground.
Together, the Marmato Upper and Lower mines have a measured and indicated mineral resource of 6.0 million oz., which includes a proven and probable mineral reserve of 3.2 million oz. Over a nearly 20-year mine life, the expanded Marmato mine is expected to deliver average production of 162,000 oz. per year from the reserve base.
Construction of the access road to the new process plant and mine portal and declines will commence in the fourth quarter of 2023, followed by the start of construction of the process plant, mine and non-process infrastructure, Aris says, adding the new 4,000 tpd mill is on schedule for mechanical completion in Q3 2025.
“This is a milestone for Aris Mining as it will grow Marmato’s gold production five-fold and, following construction, our Colombian gold production from Segovia and Marmato will be approximately 400,000 oz. per year,” CEO Neil Woodyer said in a news release.
Woodyer also noted that this expansion project is fully funded from the company’s current cash balances and the $122 million of stream funding from Wheaton Precious Metals, who purchases metal produced from Marmato at reduced prices.
Shares of Aris Mining surged 9.4% by market close Thursday for a market capitalization of C$477.5 million ($364m).
