San Gabriel Project Feasibility Study: $191M NPV, 21.8% IRR
Compania de Minas Buenaventura S.A.A.'s San Gabriel Project in Ichuña district, General Sánchez Cerro Province, Department of Moquegua, southern Peru has a Feasibility Study outlining an after-tax NPV of $191M, an after-tax IRR of 21.8%, and initial capital of $177M. The mine plan runs 14.2 years at about 109 koz Au per year.
Compania de Minas Buenaventura S.A.A.'s San Gabriel Project has reported Feasibility Study results for the gold project in Ichuña district, General Sánchez Cerro Province, Department of Moquegua, southern Peru. The study headlines an after-tax net present value of $191M at a 8.26% discount rate. It reflects Compania de Minas Buenaventura S.A.A.'s (BVN) latest disclosed economics for the asset.
Economics. The after-tax NPV is $191M using a 8.26% discount rate. After-tax IRR is 21.8%. Initial capital expenditure is estimated at $177M, with life-of-mine sustaining capital of $186M. The study models a payback period of 5.3 years. All-in sustaining costs are pegged at 1568 US$/oz Au. Economics are based on LOM long term metal prices of US$2,172.00/oz Au and US$29.00/oz Ag (base case). Reserve prices used: Au US$1,900.00/oz and Ag US$24.00/oz..
Production and mine plan. The project envisions an underground (underhand drift and fill - udf) operation. Life of mine is 14.2 years. Average annual production is approximately 109 koz Au. Average head grade is 3.71 g/t Au and 6.32 g/t Ag. Metallurgical recovery averages 85.3%.
Resources and ownership. The company holds a 100% interest in the project. Royalties and streams: 1.5% NSR royalty to Gold Fields S.A.; Mining Tax Royalty LOM average rate 4.2%; Special Mining Tax (IEM) LOM average rate 2.6%.
These figures are extracted from Compania de Minas Buenaventura S.A.A.'s technical disclosures and reflect the most recent Feasibility Study 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 |
|---|---|---|---|
| Proven | 3,166 (000 t) | 4.14 g/t Au, 3.78 g/t Ag | 422 (000 oz Au), 385 (000 oz Ag) |
| Probable | 12,139 (000 t) | 3.60 g/t Au, 6.98 g/t Ag | 1,405 (000 oz Au), 2,722 (000 oz Ag) |
| Total Proven + Probable | 15,305 (000 t) | 3.71 g/t Au, 6.32 g/t Ag | 1,827 (000 oz Au), 3,107 (000 oz Ag) |
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Measured | 661 kt | 2.26 g/t Au, 4.21 g/t Ag | 48 koz Au, 89 koz Ag |
| Indicated | 7,102 kt | 2.37 g/t Au, 7.96 g/t Ag | 540 koz Au, 1,817 koz Ag |
| Measured + Indicated | 7,763 kt | 2.36 g/t Au, 7.64 g/t Ag | 588 koz Au, 1,907 koz Ag |
| Inferred | 7,049 kt | 3.23 g/t Au, 7.34 g/t Ag | 733 koz Au, 1,664 koz Ag |
Our Analysis
- IRR after-tax
- 21.8%
higher than 9% of 98 projects we track
- NPV after-tax
- $191M
higher than 26% of 124 projects we track
- Initial capex
- $177M
93% of NPV
costlier than 53% of 121 projects we track
- Payback
- 5.3yrs
slower than 99% of 75 projects we track
- Mine life
- 14.2yrs
- Discount rate
- 8.3%
- Study price assumption
- LOM long term metal prices of US$2,172.00/oz Au and US$29.00/oz Ag (base case). Reserve prices used: Au US$1,900.00/oz and Ag US$24.00/oz.
- Spot gold today
- $4,139.10/oz
The project sits in the bottom quartile of the 98 gold projects we track on IRR, at 21.8% after-tax, and its 5.3-year payback is among the longest we follow, ranking lower than 1% of 75 comparable projects. That pairing is the defining feature: the capital comes back slowly relative to peers, and the return profile does not stand out against the ~15% after-tax hurdle developers typically need for project finance. The 8.3% discount rate is conservative, but it is a reporting convention, not an investment signal, and it does not rescue the rank.
The constraint that matters most is funding, not geology. Initial capex of $177M is 93% of the after-tax NPV of $191M, a moderately capital-intensive build that ranks lower than 47% of the 121 gold projects we track. This is not a single-asset junior straining to finance itself: the company holds 16 projects in our tracked portfolio, which broadens its access to capital. Still, a feasibility-level study with a plus or minus 15% band gives these numbers real weight, and the under-construction status means the market is already pricing execution risk, not just study risk.
The two-sided read on valuation is straightforward. The NPV-to-capex gap is thin, so there is little margin for error, but the study's base case uses US$2,172.00/oz gold against a live spot of $4,139.10/oz, a wide cushion that the reserve price of US$1,900.00/oz does not capture. Southern Peru is a mining-friendly jurisdiction, and the 14.2-year mine life supports a steady, if unspectacular, cash flow. The single question that decides whether this works: can the company fund the build without diluting away the modest NPV, and does the payback period leave enough room for the gold price to stay above the study's assumption?
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.