Spanish Mountain Gold Project PEA: C$1.00B NPV, 18.2% IRR
Spanish Mountain Gold Ltd.'s Spanish Mountain Gold Project in Canada, British Columbia (Cariboo District) has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of C$1.00B and an after-tax IRR of 18.2%. The mine plan runs 24.5 years at about 203000 oz Au per year.
Spanish Mountain Gold Ltd.'s Spanish Mountain Gold Project has reported Preliminary Economic Assessment (PEA) results for the gold project in Canada, British Columbia (Cariboo District). The study headlines an after-tax net present value of C$1.00B at a 5% discount rate. It reflects Spanish Mountain Gold Ltd.'s (SPA.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is C$1.00B using a 5% discount rate. After-tax IRR is 18.2%. The study models a payback period of 3.4 years. Economics are based on US$2,450/oz Au and US$28.50/oz Ag (base case); US$3,300/oz Au and US$36/oz Ag (spot case).
Production and mine plan. The project envisions an open-pit operation. Life of mine is 24.5 years. Average annual production is approximately 203000 oz Au.
Resources and ownership. Mineral resources: M&I: 292.1 Mt @ 0.44 g/t Au for 4.16 Moz Au; Inferred: 40.3 Mt @ 0.40 g/t Au for 0.51 Moz Au. The company holds a 100% interest in the project.
These figures are extracted from Spanish Mountain Gold Ltd.'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.
Our Analysis
- IRR after-tax
- 18.2%
higher than 3% of 90 projects we track
- NPV after-tax
- C$1.00B
- Payback
- 3.4yrs
- Mine life
- 24.5yrs
- Discount rate
- 5%
- Study price assumption
- US$2,450/oz Au and US$28.50/oz Ag (base case); US$3,300/oz Au and US$36/oz Ag (spot case)
- Spot gold today
- $4,193.80/oz
The 18.2% after-tax IRR is a passable but unexciting return, landing in the bottom quartile of the 90 gold projects we track. For a single-asset junior, the practical financing hurdle is closer to 20% after-tax, meaning this project may struggle to attract project finance without a higher gold price or lower capex. The 5% discount rate used to report the C$1.00B NPV is the low end of the convention, flattering the headline figure; a more standard rate would compress that value materially.
The NPV stands at roughly 5.9x market cap, which cuts both ways—it could signal the market has not yet priced in the asset, or that investors are skeptical about financing, permitting, or jurisdiction risk. Capital intensity relative to market cap is a key funding concern for a developer. The base-case price assumption of US$2,450/oz Au sits well below today's spot of $4,193.80/oz, so returns are likely optimistic at current levels, but the spot-case scenario (US$3,300/oz) offers a more realistic upside. The single most important risk is financing: with a modest IRR and a large NPV-to-market-cap gap, dilution risk is high.
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.