Metates PEA: $1.14B NPV, 35% IRR
Chesapeake Gold Corp.'s Metates in Durango, Mexico has a Preliminary Economic Assessment (PEA) outlining a pre-tax NPV of $1.14B, a pre-tax IRR of 35%, and initial capital of $359M. The mine plan runs 31 years at about 147 koz AuEq (Yr 1-15 average) per year.
Chesapeake Gold Corp.'s Metates has reported Preliminary Economic Assessment (PEA) results for the gold-silver project in Durango, Mexico. The study headlines a pre-tax net present value of $1.14B at a 5% discount rate. It reflects Chesapeake Gold Corp.'s (CKG.V) latest disclosed economics for the asset.
Economics. The pre-tax NPV is $1.14B using a 5% discount rate. Pre-tax IRR is 35%. Initial capital expenditure is estimated at $359M, with life-of-mine sustaining capital of $176M. The study models a payback period of 2.5 years. All-in sustaining costs are pegged at 749 USD/oz Au. Economics are based on Base case: Gold US$1,600/oz; Silver US$22/oz.
Production and mine plan. The project envisions an open-pit (sulphide heap leach) operation. Life of mine is 31 years. Average annual production is approximately 147 koz AuEq (Yr 1-15 average). Average head grade is 0.76 g/t Au, 15.71 g/t Ag. Metallurgical recovery averages 70%. The open-pit strip ratio is 2.22:1.
Resources and ownership. The company holds a 100% interest in the project. Royalties and streams: 0.5% NSR & 7.5% Gov't EBITDA Royalty.
These figures are extracted from Chesapeake Gold Corp.'s technical disclosures and reflect the most recent PEA on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 31.1 Mt | 0.86 g/t Au, 18.1 g/t Ag | 0.86 Moz Au, 18.1 Moz Ag |
| Indicated | 890.1 Mt | 0.75 g/t Au, 14.2 g/t Ag | 15.91 Moz Au, 405.1 Moz Ag |
| Measured & Indicated | 921.2 Mt | 0.57 g/t Au, 14.3 g/t Ag | 16.77 Moz Au, 423.2 Moz Ag |
| Inferred | 139.5 Mt | 0.47 g/t Au, 13.2 g/t Ag | 2.13 Moz Au, 59.0 Moz Ag |
Our Analysis
- IRR pre-tax
- 35%
higher than 61% of 404 projects we track
- NPV pre-tax
- $1.14B
higher than 65% of 579 projects we track
- Initial capex
- $359M
31% of NPV
costlier than 55% of 556 projects we track
- Payback
- 2.5yrs
slower than 46% of 332 projects we track
- Mine life
- 31yrs
- Discount rate
- 5%
- Study price assumption
- Base case: Gold US$1,600/oz; Silver US$22/oz
- Spot gold today
- $3,907.10/oz
A US$359M build against a US$134M market capitalisation is the fact that governs everything else here. The company cannot fund this from its own balance sheet, and it cannot raise the sum quietly: any equity solution large enough to matter would be transformative for existing holders, and a debt package of that scale would need a partner, a streamer or a major to underwrite it. This is one of four projects the company tracks, which cuts both ways: it spreads risk, but it also means management attention and capital are not dedicated to this asset alone. Whoever writes the cheque will set the terms, and the terms are where the equity story is actually decided.
The economics are decent support, not the main event. A 35% pre-tax IRR ranks above 61% of the 404 projects we track, and the US$1.14B pre-tax NPV ranks above 65% of 579. Payback at 2.5 years sits just below the median of the 332 projects we track, and the 31-year mine life gives a long runway. Against the practical hurdle for a junior with little else in the portfolio, the return clears the bar comfortably. But these are scoping-level numbers from a PEA, and the capital estimate carries a plus or minus 50% band: on a US$359M build, that band is wider than the company's entire market value. The study has also not moved since the 2022 PEA, with capex and mine life both unchanged, which suggests refinement rather than de-risking.
The price deck is where the optimism sits. Gold at US$1,600/oz and silver at US$22/oz against a live spot of US$3,907.10/oz means the study was built well below today's market, so the headline NPV likely understates what a higher deck would show, and the IRR has room if spot holds. That is genuine upside, but it is also the reason to treat the numbers as a floor rather than a forecast. Durango is a mining-friendly jurisdiction with an established silver-gold record, which helps at the permitting and financing table. The question that decides this: can a micro-cap convert a US$1.14B study into a funded, permitted build without handing away the economics to whoever provides the US$359M?
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.
Get the next one first
Every mining project we track, with its study figures and sources, kept up to date. Sign up and download the data right away.
By signing up, you agree to receive marketing emails from Mining Stocks and to our data license. You can unsubscribe at any time. Privacy policy