Senegal Mali Shear Zone (SMSZ) Project PEA: $61M NPV, 57% IRR
Desert Gold Ventures Inc.'s Senegal Mali Shear Zone (SMSZ) Project in Mali, Western Gold Belt has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $61M, an after-tax IRR of 57%, and initial capital of $20M. The mine plan runs 10 years at about 11400 oz Au per year.
Desert Gold Ventures Inc.'s Senegal Mali Shear Zone (SMSZ) Project has reported Preliminary Economic Assessment (PEA) results for the gold project in Mali, Western Gold Belt. The study headlines an after-tax net present value of $61M at a 10% discount rate. It reflects Desert Gold Ventures Inc.'s (DAU.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $61M using a 10% discount rate. After-tax IRR is 57%. Initial capital expenditure is estimated at $20M. The study models a payback period of 2.5 years. All-in sustaining costs are pegged at 1137 USD/oz. Economics are based on Base Case US $2,850/oz; Upside US $4,070/oz.
Production and mine plan. The project envisions a heap leach oxide operation operation. Life of mine is 10 years. Average annual production is approximately 11400 oz Au. Average head grade is 0.96 g/t Au. Metallurgical recovery averages 87%.
These figures are extracted from Desert Gold Ventures Inc.'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 | 3.14 Mt | 1.05 g/t Au | 105,500 oz |
| Indicated | 7.98 Mt | 0.90 g/t Au | 231,300 oz |
| Measured & Indicated | 11.12 Mt | 0.94 g/t Au | 336,800 oz |
| Inferred | 27.16 Mt | 1.01 g/t Au | 879,900 oz |
Our Analysis
- IRR after-tax
- 57%
higher than 74% of 104 projects we track
- NPV after-tax
- $61M
higher than 9% of 140 projects we track
- Initial capex
- $20M
33% of NPV
costlier than 8% of 133 projects we track
- Payback
- 2.5yrs
slower than 63% of 81 projects we track
- Mine life
- 10yrs
- Discount rate
- 10%
- Study price assumption
- Base Case US $2,850/oz; Upside US $4,070/oz
- Spot gold today
- $4,325.80/oz
A 10-year mine life attached to a project whose NPV is roughly 2.2x the developer's entire market cap is the crux here. That gap can be read two ways: either the market has not yet assigned value to a long-duration, capital-light asset, or it is expressing doubt that a US$28M nano-cap can finance and permit a build costing about 0.7x its own equity value. Both readings are legitimate, and the truth likely sits somewhere between them.
The economics are strong enough to justify the optimism. The after-tax IRR of 57% ranks in the upper quartile of the 104 gold projects we track, and it clears the practical financing hurdle for a junior by a wide margin. Initial capex of US$20M is 33% of NPV and lower than 92% of the 133 gold projects in our database, which is the key mitigant to the funding risk: this is a small, digestible build. Payback of 2.5 years is moderate, and the after-tax NPV of US$61M, while ranking low against peers, is meaningful relative to the company's size. The study uses a 10% discount rate, a conservative reporting convention, and a base case price of US$2,850/oz, well below today's spot of $4,325.80/oz, which leaves room for upside in the economics.
The caveat is the study stage. This is a PEA, scoping-level, with a capital estimate that typically carries a plus or minus 50% band, and it may include inferred resources. Mali is a higher-risk jurisdiction, and the company is a nano-cap with one of nine projects in its portfolio, meaning management attention and capital will be spread. The single question that decides whether this works: can a US$28M company with a diversified portfolio secure the roughly US$20M needed to build this, and can it do so without diluting away the very value the NPV implies?
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.