Freeman Gold Conducts Price Sensitivity Study for Lemhi Project
Freeman Gold Conducts Price Sensitivity Study for Lemhi Project
Freeman Gold Corp. (TSXV: FMAN) has initiated a comprehensive price sensitivity analysis aimed at evaluating the economic potential of its wholly-owned Lemhi gold project. This endeavor reflects the company's proactive approach, especially in light of the current fluctuations in gold market prices. The Lemhi project represents a significant asset within Freeman's portfolio, showcasing the potential for robust returns driven by recent advancements in gold pricing.
Overview of the Lemhi Gold Project
The Lemhi project is characterized as a near-surface high-grade oxide gold deposit that currently boasts a measured and indicated gold resource of 988,100 ounces at an average of 1 gram per tonne gold. Additionally, there exists an inferred resource of 256,000 ounces at a slightly higher average grade of 1.04 grams per tonne gold. This strong geological foundation forms the basis on which the economic analysis will be built.
Importance of the Price Sensitivity Analysis
Freeman Gold is leveraging the expertise of Ausenco Engineering Canada ULC, the same entity responsible for the earlier economic assessments of the project. The anticipated analysis will utilize current gold prices, with predictions starting from a base case of US$2,200 per ounce. This analysis is crucial, as it allows the company to adjust its strategies based on the ecosystem of prevailing gold prices, assessing potential valuations that range from US$1,600 to US$3,400 per ounce.
Updated Economic Assessments
The previous economic analysis established a base price of US$1,750 per ounce. Given the dynamic nature of gold prices, Freeman Gold anticipates that the forthcoming update will significantly enhance the project's economic outlook. The early elements of the assessment will integrate the infrastructure defined in the Preliminary Economic Assessment (PEA) alongside enhanced capital and operational expenditure forecasts. This updated framework is expected to clarify how changes in gold prices impact project viability, offering a clearer roadmap as the company progresses toward the feasibility study.
Potential Financial Outcomes
The initial PEA indicated an after-tax net present value (NPV) of US$212 million, demonstrating a solid foundation for the project's earnings potential. With the updated valuation reflecting a higher gold market, it is expected that the NPV will improve, suggesting notable profitability margins. CEO Bassam Moubarak highlighted that using the current spot price, the cash margin could stand at approximately US$1,950 per ounce, which offers substantial upside potential as prices fluctuate.
Timeline for Completion and Future Steps
The analysis is being conducted concurrently with other project initiatives, notably the preliminary feasibility study which aims to offer in-depth insights and structural proposals for the project. By integrating Ausenco's profound familiarity with similar gold projects, Freeman Gold aims to ensure the financial analysis is robust and completed efficiently. The findings from this updated economic assessment are expected to be disclosed shortly.
Conclusion and Company Focus
Freeman Gold Corp. remains dedicated to developing its Lemhi project while navigating the complexities of a rapidly changing gold market. With a team focused on advancing exploration, ongoing assessments will play a pivotal role in steering the company toward a production decision. Overall, the proactive steps taken in conducting the price sensitivity analysis exemplify Freeman's commitment to maximizing the potential of its resources in the current economic context.
Frequently Asked Questions
What is the goal of the price sensitivity analysis conducted by Freeman Gold?
The analysis aims to evaluate the economic potential of the Lemhi gold project in response to varying gold prices.
How much gold does the Lemhi project hold?
The Lemhi project has a measured and indicated resource of 988,100 ounces and an inferred resource of 256,000 ounces.
What base gold price will the analysis use?
The analysis is expected to use a base case price of US$2,200 per ounce.
Who is performing the price sensitivity analysis?
Ausenco Engineering Canada ULC is conducting the price sensitivity analysis for the Lemhi project.
What was the after-tax NPV in the initial PEA?
The initial PEA indicated an after-tax NPV of US$212 million.
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