Thank you, thank you. Actually, we're on the main board — we were fast-tracked onto the main board by the TSX. I'm here today to talk about Cabaçal, Meridian Mining, and the Cabaçal belt. We are the preeminent developer of one of the most significant copper-gold VMS belts in South America. Our flagship asset is the Cabaçal deposit, which is classified as a giant VMS deposit by the United States Geological Service.
Quick disclosure: we have a dual-strike strategy. We are developing Cabaçal through to production, at the same time we are advancing another production asset called Santa Helena — we released news on that yesterday — and we're doing greenfields exploration. We are Brazilian-focused. We are not in the Amazon jungle; one of our criteria when we were looking at new assets was not to be in the Amazon jungle, urbanization areas, or anywhere near any First Nation reservations. Our economics from our PEA last year, on a post-tax basis, NPV5 of 573 million USD, IRR 58.4%. That was using a commodity price of 1650 for gold and 359 for copper. The capex is $180 million for a 2.5 million ton plant. This is right in line with the cap intensity for Brazil.
We're not looking to develop large underground mines; we're looking at open-pit mining. This is how all VMS belts start, and the VMS belts go for decades. We are in our PFS; we're advancing that, it will be released in Q1 next year. We'll be upscaling it to 4.5 million tons. Both Cabaçal and Santa Helena were partially mined — Cabaçal back in the 1980s and Santa Helena in the mid-2000s. That has created a very strong historical link with the four communities of parity. So we recently completed our community consultation period; we had nothing but positivity.
So Cabaçal, we have got over 55 km — this is what we call the mine corridor. We have a number of exploration targets. In the south, Santa Helena, it's 10% the size of Cabaçal but three times the grade. Cabaçal, this is going to be the hub; this is where everything's going to be trucked into to be processed. At the same time as we develop these hard assets, we are going forward and developing these exploration programs. So Cabaçal, we're going to be doing the PFS, completing that as I said, expanding up to 4.5 million tons. We're infield drilling to increase the resource confidence. Santa Helena has a potential to be a high-grade open pit — I'm fairly confident on that potential — and as it is open, we're going through now the data gathering to submit what we call the first license, called the preliminary license, in the near term.
We'll be producing that preliminary license for Cabaçal, publishing the PFS, and then going straight onto feasibility. I have to really communicate: we are de-risked developers. We are trading at quite a discount to NAV, but what's interesting is that we don't have long lead times to get this into production, being in Brazil. At the same time, with Santa Helena, the first resource that's coming out in Q4 — so it's coming out shortly — we're going to be doing an extension and infield drill program. If anything we saw from yesterday's release, it's open and it's very high grade, and we'll be submitting the preliminary license next year. Brazil is a destination where all venture capital is going for at the moment; it economically dominates South America, and the mining industry is first world. We've seen many recent cases where companies have gone there, developed, built, and had massive re-ratings.
This is just a summary of the economics; all this can be downloaded from our website. What I will outline is the bottom left there — the quick payback. That's a reflection of the deposit's geometry and also of the topography. One of the main things when you look at these tables: you can always look at the far right, the big numbers — that's always very pretty, looks really solid — but it's the numbers on the left that count, because that's the numbers the banks are going to look at when they go to project finance. So at $350 copper and $1,550 gold, we developed an NPV post-tax of 550 million with an IRR of 53.5%. This is a very robust deposit and an incredible belt, currently trading at about 0.17 to NAV.
We have seen recently in Brazil massive returns on developers and then producers, and this is where we're aiming to be. When we look at comparative projects for profitability compared to low capex intensity and their market cap, you can see these companies that are much less prosperous than we are trading at much larger market caps. So we see potential for tremendous growth in our equities. Where do we sit in the cost curve? Where do we benchmark? Well, in Brazil, Brazil is very easy and they build a lot of the equipment in country, so it's very cheap. So when we benchmark across Brazil or across internationally, you see we sit right in the lowest cost quartile operating cost.
Again, we're sitting in the middle of the fairway for Brazil, and that's exactly where we want to be. By example, I guess industrial power in Germany is, I think, sort of 15, 16 euro cents a kilowatt. In the PFS, I think the electricity we'll be paying is 3.9 US cents a kilowatt. So it's very interesting to see those cost differences between the West and an emerging country like Brazil.
The deposit is large; it's over 2.1 km. We've got two geometries here: we've got a flat-lying VMS system, and then subsequently there's been another system come through and imprinted high-grade subvertical gold. And you can see up the top north there, CD49, it was 53 m at 11 g — that's one of the high-grade gold veins. And as we go to the southeast, we then come into being a more richer copper-gold system. We can see that at the bottom there, 34 m at 8.1 g gold equivalent — that's a bit... that is actually dominated by copper. So at a 0.3 cut-off grade, we've got about 60 million tons at about 1.05 gold equivalent. What's important there is that recoverable gold equivalent.
If you don't have metallurgy, I really encourage you to look at any resource statement's metallurgy, because if you don't have metallurgy, you don't have cash flow, you don't have a mine. This mine was in production for four years, so basically it had a four-year pilot plant. This is the absolute pinnacle of flotation. We crush it only very coarse, 200 microns. We take out 30% of the gold through gravity. We then produce a copper flotation. We recover life of 92.4%. We have a 28.4% copper concentrate, no detrimental metals. That also comes with about half an ounce of gold and three to four ounces of silver.
You're in Brazil, you want to have infrastructure, and we benefit from that legacy infrastructure when the mines are in place. We have two power easements to site, we are 20 km from a highway, and we're seven to eight hours trucking to a railhead and Radopolis for direct export to Europe or to Japan.
Exploration upside: we have a wealth of exploration upside, and we also have near-term production. So that means we can continue to advance the exploration, but in the longer term we'll develop the resource potential through net free cash flow, which means it's a less dilutive event.
Santa Helena — this is a wonderful opportunity for us. We have been drilling that over the last 12 months, concentrating on, for some reason, the central part and the east part of the deposit. We actually did a trial hole to the western part of the deposit. It was an area that was essentially untested, and it turns out that to the west is actually quite a significant gold province. We hit a hole there that went — yesterday reported, I think it was 75 m at 4.6 g gold equivalent, of which it was 3 g gold. Oh, here's the hole here again. We know what to do there. That mine was in production for a short time before the zinc price collapsed in 2008. We know what the flow sheet is, we know what the recoveries are. One difference is with the gold: we have identified that they did not have a gravity gold circuit as we have in Cabaçal, and that can be up to 30% additional gold recovery. So we're very positive of where we see the metallurgy going forward.
It's quite big. At the moment the exploration target is 3.3 km. What we announced yesterday is we've got a continuous high-grade zone now of 1.4 km. The exploration target, the upper range is 7 million tons for approximately 763,000 ounces gold equivalent — again, that's post-metallurgy — and the low range of 3 million tons for 360,000 ounces. In our economic model, we generate these quite significant results. It does not include the high-grade feed from Santa Helena, so that's only going to increase the economic potential of this project as we go forward.
The copper: we produce three products there. We produce a gold doré — or will produce a gold doré — a zinc concentrate, and a copper concentrate. There's a lot of silver in this deposit, and from the historical records when they were in production, the silver content of the copper concentrate exceeded 600 g per ton concentrate.
However, with Cabaçal, what we've been able to look at is quietly we've acquired a very significant exploration package of nearly 1,000 square km in two other greenstone belts, including Cabaçal. This puts us as the preeminent landowner in this part of the world. This was evaluated back in the 1980s by BP Minerals, that was subsequently bought by Rio Tinto. It was not the size that Rio Tinto wanted; they just dropped it. So this entire package was, pardon me, either held in the archives of Rio Tinto or in a small underfinanced private company that we acquired the Cabaçal belt from. So really what we're looking to be is the next mid-tier producer in Brazil for copper, gold, and zinc concentrates — primarily copper and gold.
Our corporate structure: when we started this journey in 2020, we were 90 to 95% retail. I just restructured the company in that time, and since then it's now approaching 60 to 65% institutional shareholding and high net worths. We have about 30 to 35% retail liquidity. We have price targets between $1.30 up to $2.50. We're covered by four banks. In our share registry — our share registry is very unusual because if you look at a mid-tier company, you'll see some quite significant institutional accounts because there's less risk. Yet those same institutional accounts are now actually shareholders in our company.
The board, led by Bruce McLoud — he recently sold Sabina for, I think it was 1.4 billion Canadian. Myself, and Adrian John Skinner, a well-known banker. Susie Sesemann — she's actually a retired banker, Austrian banker. If you go on a holiday in Portugal, she actually signed the project finance check for those freeways. Doug Ford, and a very experienced gentleman, Neil Gregson, was recently the MD of JP Morgan's resource desk.
A management team — we've been together for a long time. It's very important that you have, you know, the capacity of your... But most importantly, in Brazil we use Brazilians. We don't try and fly in experts; we build with Brazilians.
So, near-term upside: development, that's what we're looking at. Metal prices — we started off at a base, so we're exposed to the upside. We didn't start at ridiculous prices; we started with consensus prices. We present a significantly undervalued commodity and a company near-term develop... simple mining. What's going to happen in the next three months — or sorry, the next 12 months: PFS, you'll see the real economics; Santa Helena resource, you'll see the upside; discovery along the belt, you'll see the potential. This is all downloaded from the internet, from our website. You can also contact me at
[email protected]. And this is the completion of the presentation. So if there's any questions, I'm happy to answer them.
