TSX-V-listed Fredonia Mining finds in a preliminary economic assessment (PEA) and updated mineral resource estimate (MRE) on the El Dorado Monserrat gold and silver project, in Argentina, the viability to produce 146 000 gold-equivalent ounces every year over a 17-year mine life.

The PEA determines a net present value (NPV) of $1.5-billion (after tax) for El Dorado Monserrat and a 65% internal rate of return (IRR) for what can be a cost-competitive bulk mining operation.

The project's surface mineralisation allows for conventional openpit truck-and-shovel mining at a low overall waste ratio, with processing assumed by heap leaching. The PEA states a life-of-mine cash cost of about $1 630/oz.

The PEA estimates life-of-mine payable production to be 2.47-million gold-equivalent ounces.

El Dorado Monserrat also has a capital-efficient development pathway, needing initial capital of about $346-million, comprising $143-million for the mine fleet, $91-million for the process plant and site infrastructure, and about $112-million for pre-production items and initial working capital.

The PEA outlines a separate scenario applying a 25% income tax rate and accelerated depreciation under Argentina's Regimen de Incentivo para Grandes Inversiones (RIGI), which results in an NPV of $1.8-billion (after tax) and an IRR of 82%.

The RIGI benefits are not included in the PEA base case and remain subject to project qualification and validation by an Argentine tax specialist.

Meanwhile, the updated MRE reflects consolidated block models for the La Herradura, Main Veins and Monserrat West deposits. The overall project now has 126-million measured and indicated resources at grades of 0.68 g/t gold-equivalent - or 0.47 g/t gold and 12.6 g/t silver - for 2.7-million gold-equivalent ounces contained.

The project also hosts inferred mineral resources grading 0.46 g/t gold equivalent - or 0.31 g/t gold and 8.89 g/t silver - for 1.09-million gold-equivalent ounces contained.

"We believe El Dorado Monserrat combines scale, strong early production and capital efficiency in a way that is unusual for a project at this stage. Just as importantly, the current mine plan is based only on the Main Veins and La Herradura deposits, while Monserrat West and multiple additional mineralised veins and targets remain outside the present economic assessment.

"Our priority now is to continue increasing geological confidence, advance metallurgy and engineering, progress environmental and permitting work, and systematically evaluate the additional opportunities across the broader property," says Fredonia CEO Estanislao Auriemma.