All right, everybody. Welcome into Mining Stock Daily from the Beaver Creek Precious Metals Summit. We do have an exclusive to begin our coverage this week with our friends, long-time friends, from Meridian Mining. They do trade on the TSX and the LSE with the symbol MNO and on the OTCQX in the US with MRRDF. The company overnight did publish their definitive feasibility study for the Cabral project. We're going to go over the numbers, what's changed since the PFS, and all things for people to take a deep dive in here with our friend CEO Gilbert Clark. Gilbert, first off, congratulations. This project moved about as quickly as one could. And not that it, you know, there were challenges along the way, but this DFS is a testament to what you've done with Cabral, the team, and just how great this project is. It's just the beginning of this belt here. So, first off, walk us through the numbers.
Okay, Trev, look, thanks again for coming in. We're very happy that you're the first off the block to go through the...
I'm very happy to. Thank you.
So, look, we've always said Cabral is a very special project. So, base case scenario we used, we generated a post-tax NPV5 of 2.092 billion in US dollars. It's got an IRR of over 107.6%. It gets paid back in 0.9 of a year, so less than a year to pay it back in on the base case. And most importantly, that NPV5 to CapEx ratio, it's grown now to be 6.5 to 1. I mean, we are almost talking about some leading industry economics here. That was based on a gold price of $3,570 per ounce, copper at $5.03, and silver at $50.17. Now, look, if we take it at spot price, which we took on the 10th of September, and actually the spot price today, I think it's a bit higher, that's with a $4,394 gold and $6.53 copper, $64 silver, that generates a 2.9 billion in USD post-tax NPV, with an IRR that actually grows to be 134%. And the payback then it just drops down to 0.7. And look, we've always said about this project that it's an industrial project. This is a mining project. And this is the exact type of economic returns you want to see from this emerging mid-tier producing mine. Look at some of the other numbers, you know, the all-in life of mine all-in sustaining costs, you know, $1,056 per ounce of gold equivalent. It generates post-tax free cash flow of some 2.9 billion. This is base case, 2.9 billion US dollars. In that first five years, that's critical for any mine, we generate on average 183,526 ounces of gold equivalent. In that first five years, our AISC is $715 US dollars per ounce of gold equivalent. I mean, this is what you want to see when you want to build a mine to generate a mine. CapEx is up a little bit, OpEx is up a little bit, but I just want to make it clear, this is being engineered to be built, this is being engineered to be financed. And our DFS, which was led by Senko, contributions by GEKKO 21, critical ones, and also Normet, who did metallurgy for us, fantastic effort by all three. They've delivered something special to the company and to our shareholders.
I would say so. So, what has changed since the PFS as far as the technical mining scenario? Reserves, resources, what is that number? How much material there is actually going to be mined?
Well, this is in the permitted the Pitinga license pit, which is the same pit as we used in the PFS. That reserve has now grown from some 40 million tons to over 56 million tons of reserve, which is 98% in the proved category. Like I said, we drilled and we drilled. We did the cannibalize cycle investment. When everyone's talking exploration, we focused on resource development to build the mine. So, that's a critical one. Look, we have experienced change in inflation in Brazil, the change in the exchange rates in Brazil. There's been additional fuel costs, additional electricity costs, but we weathered those costs because when you've got a strong economic base, a strong reserve base, this is what you want to see in a mine, a mine that can operate and be profitable in any stage of the mining cycle.
You did mention a little bit of the CapEx did kind of raise a little bit, and you mentioned some of those numbers just now. Is that maybe more exclusive to the higher CapEx, or what else was kind of raising in cost from that PFS?
I think it was the fact that we achieved a lot more detailed engineering went into it. Now, look, we're not dealing in the previous in the PFS we were dealing we're going to process some 41 million tons. So, our dry stack tailings was designed for 41 million tons. It's gone to 56 million tons. So, of course the civil infrastructure to manage all of that had to increase. The detail, the certainty that you want to go into an engineering study for a DFS because we're going to take this out to the project finance banks now and it's got to be bulletproof and that's why we took so much time. Our own reading team in the offices of Asenco in Belo Horizonte watching each step of the process that's so keen that we built that Brazilian execution team in Brazil to build this mine.
Yeah.
I mean, this is the epitome of de-risking a project, right? Getting it to this point with these numbers. And you know, we're in a really incredible market here at $4,400 gold give or take, $6.5 copper give or take. And obviously, you see that reflected in the spot price scenario here. And I don't think you and I sitting here would have any doubt that we feel like those prices are maybe going a little bit higher. But you know, this project, it has to weather bad metals markets as well. Do you feel like Cabral is set up for, you know, something that maybe we don't want to see?
No, look, Cabral. Look, I ran the numbers from the PEA or the resource numbers and the exchange rate and put it into this model. I ran the resource numbers from the PFS into this model. At each stage, the NPV and the IRR increased even with lower commodity prices. So this is what you want to see. It's always going to be cash flow positive. It's buildable. It's scalable. And then we've got by far what I can see one of the best VMS exploration portfolios for South America. So this is what we're seeing. We're seeing the real nascence now of an emerging mid-tier copper gold producer in Brazil.
Okay. But has anything changed as far as the final product? What are you going to produce? And maybe what are the conversations like moving forward now with this DFS out? I mean, there's got to be a taker for what you're producing. What do those conversations look like?
Absolutely. So one change in the flow sheet is we're not producing gold dore. Okay? We're going to recycle the gravity gold into the copper concentrate. And that's going to go up to, you know, up to 2 oz of gold in the copper concentrate. You know, 3, 4, 5, 6 oz of silver, 29% copper. We've published just a couple of weeks ago, a couple of months ago now, the results of how this copper concentrate smelts. We produce blister copper almost to anode grade.
I remember that conversation.
I mean, we got a lot of incredible response from traders, from smelter groups when we put out the fact that this is going to be the next medium-term producer of some of the cleanest, best smelting copper concentrates to the market that has got high credits of gold and silver. Perfect for producing acid, no deleterious. This is the best bleeding material coming onto the market and we're going to sell it for a premium. We're going to leverage the quality of this copper concentrate for the benefit of our shareholders.
