Why Newcore Gold Stock Jumped 35%

Newcore Gold Ltd., headquartered in Vancouver, Canada, specializes in the exploration and development of precious metal properties. Established in 2010 and initially known as Pinecrest Resources Ltd., the firm adopted its current name in August 2020. The Enchi Gold Project, located in southwest Ghana, covers 216 square kilometres within the Bibiani Shear Zone, an area rich with gold deposits such as the Chirano mine to the north. Newcore Gold fully owns and actively develops this site, which includes an indicated mineral resource of 743,500 ounces of gold at 0.55 grams per tonne and an inferred resource of 972,000 ounces at 0.65 grams per tonne.

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The significant rise in Newcore Gold Ltd.'s stock price, which pumped over 35% in the past two trading sessions, ties directly to the exciting outcomes of the updated Preliminary Economic Assessment (PEA) for their Enchi Gold Project. Announced on April 25, 2024, this assessment revealed strong financial and operational projections that quickly caught the eye of investors and boosted the company's stock.

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Insights from the Preliminary Economic Assessment

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According to the Preliminary Economic Assessment (PEA) conducted by Lycopodium Minerals Canada Limited, the Enchi Gold Project is set to be developed as a low-capital intensity, open-pit heap leach operation. This strategic choice enables the processing of 8.1 million tonnes of material per annum, leveraging contract mining to optimize costs and efficiency.

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Financial Highlights:

The PEA projects a pre-tax net present value (NPV) of $586 million and a pre-tax internal rate of return (IRR) of 77% at a gold price of $1,850/oz. After-tax figures are equally robust, with an NPV of $371 million and an IRR of 58%.

Initial capital investments are estimated at $106 million, including contingencies, with a notably swift after-tax payback period of just 1.6 years.

Operational Efficiency:

The assessment forecasts an average annual gold production of approximately 121,839 ounces, with a peak output of 155,188 ounces in the sixth year.

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The project benefits from a favourable life of mine (LOM) strip ratio of 2.67 to 1, with an average mined grade of 0.60 g/t Au and an efficient gold recovery rate of 81.8%.

Cost Efficiency:

Life of mine operating costs are calculated to be $801 per ounce of gold while all-in-sustaining costs (AISC) are expected to stand at $1,018 per ounce.

Exploration and Growth Potential:

The Enchi property spans 248 km² along Ghana’s Bibiani Shear Zone. With less than 10% of the area explored to date, the site holds substantial potential for further exploration and resource expansion.

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In conclusion, the details provided in the PEA clarify the economic strength and operational efficiency of the Enchi Gold Project, significantly reducing investors' risk perceptions. This newfound clarity and the potential for substantial future growth have directly influenced the sharp increase in Newcore Gold's stock price, reflecting the market's strong response to the positive assessment results.

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