El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
Belo Sun Mining (TSX:BSX) dropped by as much as 37% on Tuesday as investors reacted negatively to a pre-feasibility study for its Volta Grande gold project in central Brazil.
By midmorning the Toronto-based company had recovered somewhat to change hands at 68c, still down 23.6% with volumes already three times usual daily average.
Belo Sun is worth $180 million on the Toronto big board and after today’s losses is down 58% in 2013.
According to the study Volta Grande in Pará state, will cost $750 million to build with projected annual gold production of 313,000 ounces over a 10 year life span.
Cash costs for the project including royalties is pegged at $711 an ounce with annual operating costs put at $19.6 million to mine the 2.6 million ounces of recoverable gold.
At a gold price of $1,450 an ounce, which is above the ruling price today, Volta Grande has a value of $935 million, but that figure falls to $474 million assuming a 5% discount rate.
Volta Grande, Brazil’s largest gold mine in development, has attracted intense scrutiny from Brazil’s federal authorities during the permitting process.
In September last year – after reports about a federal investigation into the project that found inconsistencies in the environmental assessment – Belo Sun withdrew and then quickly re-instated a $50 million financing deal provoking bewilderment from investors.
Belo Sun owns 100% of Volta Grande and increased its property position from 195 sq. km to 1,305 sq. km in 2011. A feasibility study is scheduled before the end of the year with earliest construction starting in 2016.
The controversial mine in the Volta Grande do Xingu area is to be built near lands of the indigenous Xingu people and 14 km away from the Belo Monte hydroelectric dam, an equally environmentally sensitive project now under construction.
RELATED: Belo Sun’s next challenge at Volta Grande: 2,000 illegal miners
