Tonopah Gold Project PEA: $112M NPV, 17.6% IRR
Viva Gold Corp.'s Tonopah Gold Project in Nevada, USA has a Preliminary Economic Assessment (PEA) outlining an after-tax NPV of $112M, an after-tax IRR of 17.6%, and initial capital of $220M. The mine plan runs 7 years at about 75000 oz Au (years 1-2); 50,000 oz Au (years 3-7) per year.
Viva Gold Corp.'s Tonopah Gold Project has reported Preliminary Economic Assessment (PEA) results for the gold project in Nevada, USA. The study headlines an after-tax net present value of $112M at a 5% discount rate. It reflects Viva Gold Corp.'s (VAU.V) latest disclosed economics for the asset.
Economics. The after-tax NPV is $112M using a 5% discount rate. After-tax IRR is 17.6%. Initial capital expenditure is estimated at $220M, with life-of-mine sustaining capital of $70M. The study models a payback period of 3.6 years. All-in sustaining costs are pegged at 1269 USD/oz. Economics are based on Base case US$2,400/oz gold (PEA); resource cut-off assumes US$2,200/oz gold with revenue factor of 1.2 (US$2,640/oz).
Production and mine plan. The project envisions an open-pit operation. Life of mine is 7 years. Average annual production is approximately 75000 oz Au (years 1-2); 50,000 oz Au (years 3-7). Average head grade is 1.75 g/t Au (mill feed); 0.37 g/t Au (heap leach feed). Metallurgical recovery averages 93%. The open-pit strip ratio is 3.9 : 1.
Resources and ownership. The company holds a 100% interest in the project. Royalties and streams: 2% NSR on 184 of 546 claims; 1% buy-down for US$1.0M.
These figures are extracted from Viva 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 | 1,690 (000s tonnes) | 1.41 g/t Au, 3.11 g/t Ag | 77,000 oz gold; 169,000 oz silver |
| Indicated | 25,000 (000s tonnes) | 0.53 g/t Au, 1.98 g/t Ag | 427,000 oz gold; 1,593,000 oz silver |
| Measured & Indicated | 26,690 (000s tonnes) | 0.59 g/t Au, 2.05 g/t Ag | 504,000 oz gold; 1,762,000 oz silver |
| Inferred | 6,905 (000s tonnes) | 0.37 g/t Au, 1.81 g/t Ag | 83,000 oz gold; 402,000 oz silver |
Our Analysis
- IRR after-tax
- 17.6%
higher than 3% of 105 projects we track
- NPV after-tax
- $112M
higher than 16% of 141 projects we track
- Initial capex
- $220M
197% of NPV
costlier than 59% of 139 projects we track
- Payback
- 3.6yrs
slower than 89% of 85 projects we track
- Mine life
- 7yrs
- Discount rate
- 5%
- Study price assumption
- Base case US$2,400/oz gold (PEA); resource cut-off assumes US$2,200/oz gold with revenue factor of 1.2 (US$2,640/oz)
- Spot gold today
- $4,658.20/oz
The build cost is the story. At roughly 8x the company’s US$28M market cap, the US$220M initial capex cannot be quietly financed. Even with an NPV about 4x market cap, the gap between the balance sheet and the cheque is so wide that dilution is not a risk, it is a certainty. The realistic question is not whether existing holders get diluted, but how much and at what price. A project-finance lender would demand a substantial equity contribution from a nano-cap with no other assets, and the only source of that equity is the current shareholder base. This is a financing plan that works only if the market re-rates the asset before the build decision, which brings us to the returns.
The 17.6% after-tax IRR sits in the bottom quartile of the 105 gold projects we track, and it is below the 20% hurdle a higher-risk junior with a single asset typically needs to secure project finance. The NPV of US$112M is also modest, ranking above just 16% of peers, and the 3.6-year payback is unremarkable. The study’s 5% discount rate flatters the headline NPV, but that is a reporting convention, not an investment signal. The economics are workable, not compelling, and they depend on a US$2,400/oz gold price that sits far below today’s US$4,658.20/oz spot. If spot holds anywhere near current levels, the project could generate far better returns than the PEA suggests; if gold reverts toward the study’s assumption, the margin for error narrows sharply.
The PEA is scoping-level, with capital estimates carrying a typical plus or minus 50% band, and Nevada is a mining-friendly jurisdiction, which removes a layer of political risk. But the stage of study matters less than the funding gap. A 7-year mine life and a single project mean this is a binary bet on execution and on the market’s willingness to fund a build worth 8x the company’s value. The deciding question is simple: who writes the equity cheque, and what does that imply for the current holders who are, in effect, the only source of it?
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.