Thank you. Hello. My name is Gilbert Clark. I'm the CEO of Meridian Mining PLC. We are a British company developing the Cabaçau copper-gold VMS belt in South America, Brazil. With me today is James M. Lucas, the SVP of Corporate Development.
We've recently dual-listed the company on the TSX and now the London Stock Exchange. What we've hoped to bring to the London market is exposure to what we consider to be the preeminent copper-gold VMS development story for South America. I'll go through the presentation. Please, if any questions, just type them in. We just have to go through the standard forward-looking statements. This presentation can be downloaded from our website.
Meridian has a long experience in operating in Brazil. Formerly, we operated a small manganese mine in Rondônia, which is the neighboring state. In 2020, we restructured the company, went out for a new project, and we identified the Cabaçau belt as being a preeminent opportunity for the company. From this, we looked at what we could do about Cabaçau. How could we grow Cabaçau? In the time since then, we've published a PA and the PFS, and now we're well advanced on the DFS. We established Cabaçau, the mine, to have some of the preeminent mining economics seen in a generation. We've been advancing our project towards FID. We've actually started ordering the long-lead items. In Q4 of last year, we had a major event for us where we got the preliminary license granted by the state of Mato Grosso. And the preliminary license is very important. It's your most important and intensive license to apply for. It essentially establishes your environmental credentials, your social credentials, the justification of economics and technical merits of the project. And we were very lucky to be able to do this with just under 100 million USD on the balance sheet. We're very well financed. We found Brazil. My background's in private equity. I've traveled the world. It's one of the best jurisdictions where we are in Mato Grosso in Brazil for mining.
But Meridian is just not one deposit. We have the preeminent exploration portfolio for South America for copper, gold, VMS-hosted deposits. We're very fortunate in this, and this is really a company-making opportunity that we focus on to bring this as the next near-term producer and mining mid-tier company on the London Stock Exchange.
We've seen in recent time tremendous growth in the metal prices. I think we're at nearly $4,600 for gold today. Over $6 a pound for copper. All mining projects, real mining projects, are based on very conservative metrics because it's a risk business. You have to manage risk. So for our PFS that we published in March of last year, we used 2119 for gold and 416 for copper. That generated a post-tax NPV5 of 984 US. The internal rate of return is very high, 61.2%.
The all-in sustaining costs, remarkably in line with what you expect for the low-opex environment of Brazil, of $742 US per ounce of gold equivalent. The capex, again, we're not the cheapest. We're not the most expensive. We're right in the middle of the fairway for capex, and this very much replicates the opportunity that Brazil is for mining.
On that base-case scenario, we pay back the capex in under 17 months. Now, if we look at today's spot price or long-term consensus, we're going to see even a quicker repayment than what we're looking at today. We have a mid-tier production profile of over 141,000 ounces of gold equivalent on the base case. It's approximately 51% gold, 1% silver, and 48% copper. A couple of key metrics here. The NPV to capex ratio, nearly 4 to 1. A life-of-mine free cash flow using those base-case economics is $1.4 billion US dollars, and we have an initial mine life of 10.6 years. This is very fortunate for us because this actually gives that standalone economic prosperity to then go ahead and explore and develop the greater belt.
We have exceptional cash flow metrics. Now, you can notice here in year four that it jumps up. We're actually permitted to build a 4.5 million ton mill. What we're going to do is build a 2.5 million ton mill, make our operational activity fluid, safe, and optimal. And then we're going to expand up to 4.5 million tons. This is a low-risk strategy, but it ensures for what we consider to be long-term success.
It is a large deposit. As for the United States Geological Service, it's actually considered a giant-size VMS deposit. The pit itself is over 2 km long. It's half a kilometer wide. It almost goes down to 200 m. It's mineralized at surface. It has two types of mineralization in one. One is the VMS system, which is across the belt, and then subsequent in a period after the VMS was in place, there's been a later event which has placed high-grade gold veins vertically transsecting the VMS layers. Now, these high-grade gold layers can manifest themselves as in CD49 we hit 26 m at 21.5 g gold and 2% copper. As we go towards the southeast of the deposit, the copper actually increases, and we hit one of the feeder zones with hole CD240, where we hit 12 meters at 4 g gold and over 9% copper. As I said, with the capex that we're envisaging, we're building a platform, a volume to go to 4.5 million tons. So in year four, with an additional $59 million in capex, we then take the expansion up to 4.5 million tons. We have already started to look at this as how do we de-risk, how do we de-bottleneck the rollout within the DFS, and that's very key for us.
On the reserve statement, in the last couple of years leading up to our IPO, we actually did a lot of counter-cyclical investment. A lot of people are going out there trying to explore, speculate. We focused on building hard assets. And so today we have actually a reserve statement for Cabaçau, 89% of that is in the proved category. 41.7 million tons of 6.3 g per ton gold, 1.64 g per ton silver, 0.44% copper. Now, one thing about Cabaçau, because it was previously in production back in the 1980s, is we knew what the flow sheet was, and it was exceptional. Meridian with Cabaçau has the peer of metallurgical recoveries for VMS deposits. It's a very simple flow sheet. For the PFS, we used a 200 micron grind. Incredibly high-grade result from that was we produce a copper concentrate between 20 to 30% copper. The overall recovery is very high. We produce two types of products. Through the flow sheet, we take out approximately 30% of the gold through gravity. We produce gold doré that'll be poured off-site, and then we have the copper, gold, and silver concentrates. We've specifically designed the plant to have a non-acid-generating environmental impact. We have dry stack tailings. In the world today, a lot of people have talked about copper and the growth of copper and the deficit of supply. We will never produce the world's largest volume of copper concentrates. What we do produce is one of the best blending copper concentrates coming onto the market that will go for over the next decade. And that's why we've attracted such interest by all the smelting groups, the trading houses.
What can I tell you about Mato Grosso, where we're located? It is a very wealthy state. It's dominated by agriculture. It has many, many mines operating. It has a lot of power generation within 100 kilometers. We've got over 10 hydroelectric dams near the mine, I should say, which is giving us very low cost, a very stable grid at a cost of about 5.4 cents per kilowatt. I guess that would be somewhere comparable to, say, British Columbia or Quebec for low-cost electrical power. And this is one of the reasons why our opex is so low from that historical mining operation. We have power easements to site. We have concrete bridges to site. We have all the roads to site. So we benefit from legacy infrastructure to export our products. We'll be trucking them down to the port in São Paulo. As this entire state of Mato Grosso is set up for logistics to flow low-value agricultural commodities to the coast, we benefit from that. So from mine gate to port, including port charges, it's approximately $159 US per ton delivered. Again, this reflects the overall low-cost operating environment of Brazil.
We've always been focused on production, and we're very much on that next phase of pre-production, pre-construction, then leading to production. And to do that, we have to complete the DFS, which we'll be filing in Q4 this year. But as we've built up the historical, and then for the first compliant resource and the pre-feasibility resource, in January this year we actually reported the definitive feasibility stage resource upgrade. Now, that was over 20 million tons more of ore in the ground. That gave us a 39% increase in gold content. There's a 19.3% increase in silver and a 14.2% increase in copper that benefited from a more aggressive flow sheet. We're using more aggressive reagents to collect the metals. Importantly, on the valuation side of things, this increased resource is within the same permitted pit outline that we used in the PFS, which then the PFS resource of some 50 million tons has generated a 41 million ton reserve. So we're very confident that this new resource within the same pit would generate an increased reserve statement.
So last year we got the preliminary license granted. We've actually submitted the installation license. We're giving guidance of sort of 9 to 12 months for that. We could be granted that a lot sooner because there was a change in legislation, but we've always been conservative in our forecast so we can actually achieve those and sometimes in advance. Once we've got the DFS completed, once we've got the installation license granted, you then build the mine in Brazil. You pre-strip, you construct, and then you go to the authorities and you say, 'We'd like to apply for our operational license.' And essentially then they come, they look at the mine, they look at what you've built. They say, 'Yes, you've built what you said you're going to build. Here's your operational license. You can now turn it on.' And that's just some of the very mechanics of getting into production in Brazil. But very much this last period, we've been focusing on optimizing the DFS. So we've increased the recoveries. So not only in that resource statement did we use slightly higher commodity prices, but we've also used higher and more efficient metallurgical recoveries. So that's one of the reasons why we saw that significant jump in the resource statement. The site optimization is mainly just trucking distances and the impact to ensure that we have an operation that is efficient from day one. And that historical infrastructure we're going through now, we're surveying that again, and we're going to check where we have to upgrade that or build better bridges or better roads. But greatly, we don't have to get that permitted; that is there.
So for this year, there's going to be a number of quite positive press releases coming out. Of course, the feasibility study is one of the key ones. We have actually, with the feasibility study reporting, we'll go straight into detailed engineering for the engineers out there. We included into the DFS scope of works that the basic engineering had to be completed within the feasibility study. That's one of the reasons why things like the SAG mill, the transformers have been able to be ordered and specified way in advance. Project finance, we've been very focused on how we've been doing this. David Hyard, our CFO, joined us in March of last year. So we have always anticipated and prepared our finance so that it's completed, but completed in the best interests of our shareholders. Installation license, as I said, we give 12 months guidance, but we're quite confident that that'll be granted in time. The ordering of long-lead items has commenced. We'll be, this dry season, we'll be commencing the infrastructure work so that we can go into Q1 next year and start the construction, or should say Q2. But what we've done clearly, and we've communicated this to the potential project finance groups, is we have one of the, I guess, the best exploration portfolios in South America for VMS-hosted copper and gold and silver. We will not be stopping our exploration during the construction phase. That is a key criteria for accepting it. So that is ongoing as we at this very moment and will continue all the way through to, I guess, many, many years to come.
This photo here gives you a bit of an idea. We're not dealing with the Amazon jungle here. This is pastoral land. We call this the mine corridor. It's between the two mines, the Cabaçau mine and Santa Helena. Again, this was a small underground operation. Within that, you've got Chacrito, Sacuri, Cigarra. So what we have here is, a lot of companies say we're in Canada or Australia, there are probably 10 or 15 companies with a piece of this belt. We effectively very specifically went about quietly acquiring all of what we could find to be the spare ground. And that's very important, this upside that we've identified and got permitted. We've done that through equity raises. So that means there's no financial instrument. There's no royalty, no third-party royalty, no third-party stream between the project and the shareholders. All financial benefit from the future mine will go to our shareholders.
Santa Helena, very, very exciting. Santa Helena Central is a part of a longer system. We recently, it's a higher-grade system. It's again open pit. We're currently infilling and expanding that. Recently we announced that we've identified that the gold overprint is present down in the Santa Helena areas, which is very important, specifically for one of our new projects that's popped up called the Aripuanã Group, which is the overlying younger geology above the VMS belt. Now to the west of us, there's a mining complex called Peixoto where they've extracted over 400,000 ounces of gold from this Aripuanã Group. Now what we've done there is we've identified that it is auriferous, and this is very important. So not only do we have the exploration potential from the VMS belt, we now have that exploration for gold potential on the overlying sediments. And combined with this, that's when we went down the process and the review to permit Santa Helena as we permitted as a second processing hub. So at the moment we are permitted for 4.5 million tons, with the eventual positive decision to granting Santa Helena, it actually takes us up to over 5.7 million tons of potential mine throughput, and that's a significant amount of mining processing capacity.
As a one bit of history here, back in the 1980s, this entire area was under one tenement through a company called BP Minerals. Of course, that was the mineral division of BP. They sold it to a company called RTZ, who actually then became Rio Tinto. Their focus at the time was gold. This is back in the 1980s. It's fine gold. So they found the Cabaçau deposit, which was a gold-rich deposit. There were other gold and copper anomalies, specifically some were quite significant, like at Jaru we got over 7 kilometers of copper anomaly to go and test and explore upon. But at the end of this first phase of exploration that ended in 1989, they essentially shut everything down for corporate reasons, and it's just sat there ever since we actually acquired the project in November of 2020. This presents this tremendous opportunity. We have gone through and secured by tenement the portfolio of South America, and this is the growth that we want to bring to our equities. This is the growth we want to bring to the London Stock Exchange. Not only do we have one greenstone belt, we've got three greenstone belts with a significant tenement package covering the prospective ground. Just one thing to note on the middle tenement, you'll see there's a lot less data there. We are actively still picking up ground there. We have the historical exploration. We just don't communicate that to potential other interested parties. But we are actively trying to increase our position along these two other belts, the Ariquemes and the Jaru belt.
In our last 12, 18 months, we've seen sustained growth in our equities. One of the reasons when we came to London is we looked at last year's growth. It was very robust. I think from January through to December we went from circa 35 cents up to over a dollar. But from my perspective, it was underperforming. We couldn't actually identify what was causing this underperformance. You know, 300, 400% growth is great, but I think there was a better valuation there. We looked at the Australian Stock Exchange and they said we need to move your shares across to Australian custodians to get indexation, and that's when I realized what we were missing in our equities. So our reason, we've always been able to raise capital through our shareholders, and over 50% of our shareholders are actually London-based. Today we've now got probably close to 60, 65% of our equities now London-based, and we're now, since that IPO, we will find out, I guess, tomorrow. But for the FTSE All-Share inclusion, I think I'm quite confident we've achieved the liquidity. You can see some of the names there. That's a suite of our institutional investors. Our institutional register is one of the best in the junior market. Some of these groups came in very, very early into our journey, and one of the reasons they came in early is that we projected a risk profile that was incredibly low for the value of the equities, and we see tremendous growth through re-rating, through pre-construction, through construction sign-off, and then into net free cash flow. That's the future we want to bring to London.
On the board of directors, we have very broad experience. Bruce Malouf, he recently was involved with the Skina Lasabina construction in Canada. Adrian MacArthur, he's our president director. He works two months on, one month off on site. His PhD is in volcanic systems. He was actually ex-WMC. John Skinner is a retired broker from Vancouver. Susie is a semi-retired banker from Austria. Doug Ford is the head of the audit committee and the senior independent director. Doug and I have sat on boards over 15 years. I brought him on for that independence and his knowledge of audit. Neil Gregson. Neil and I have known each other over 10 years. He was, as you know, on the JP Morgan natural resource desk. David Hyard as our CFO. Again, known David for well over a decade. Joel's our director of Brazil. He's been with the company since 2014. He's very experienced in operating in Brazil. James is on the call today. Katherine, our company secretary. She just joined us last year as we saw the expansion into the United Kingdom. Mark McFarland is ex-MMG from Australia. He's a very experienced senior executive. He's head of strategy and projects. Victor Bell is our mine builder. He's built and operated some of the largest gold mines in Brazil. He was the general manager of Kinross's Paracatu. He has been involved in over nine mine builds and expansions in Brazil, and he's built a team of over eight engineers today who are now sitting in the office in Belo Horizonte overseeing each day that DFS program.
So production, production, focus on production, get into cash flow, expand the exploration through cash flow. We have very, very attractive economics post-tax, billion-dollar valuation using 2119 for gold and 416 for copper. If you just use what we can actually report, it actually takes it over to 2 billion valuation. We have started the process of ordering long-lead items. Some of these will take 12, 14 months, but they're being ordered now. The deposits have been paid. The preliminary license application, that PL that came through, that was a key moment for us with de-risking the project. Within that, just to take in context, we do not have any sensitive First Nations, rainforest, environmental concerns within the project's belt, and that's one of the reasons I selected this project presented to me a low-risk investment strategy. Our balance sheet is very strong with nearly $100 million US. That gets us past FID and eats into the capex figure needed to bring it into production. We've focused on Brazil, but we've got over 50 kilometers of belt-scale exploration. That first phase of high-risk venture capital exploration has already been invested by BP back in the 1980s, and we're now going through and targeting their projects. Even though we're using some of the historical data, even today we are finding new deposits, new prospects on this belt.
So I'd like to thank you for that. That was the presentation, the summary of the presentation. If you like, I can now take questions.
