Canadian junior Newcore Gold has announced a preliminary economic assessment (PEA) for its Enchi gold project, in Ghana, outlining plans for an openpit and heap leach operation processing 6.6-million tonnes a year with strong economics and low capital intensity.

Initial capital costs are estimated at $97-million with a payback of about two years after first gold pour.

The PEA calculated an aftertax net present value, at a 5% discount, of $212-million and an internal rate of return of 42% at a gold price of $1 650/oz.

The PEA also reflects an updated, pit constrained, inferred mineral resource of 70.4-million tonnes grading 0.62 g/t containing 1.4-million ounces gold.

"We believe that the project and economics have a tremendous amount of upside from resource expansion both from shallow, near-surface oxide mineralisation, but also from the higher-grade structures that we are starting to define at depth.

"This PEA only includes 20 195 m of drilling from our ongoing 66 000 m drill programme, and only incorporates the shallow, openpit oxide material defined to date, with the first deeper drilling on the project under way to define the potential for resource growth at depth.

"We are excited to continue to define the district-scale, multimillion-ounce potential at Enchi and build off the underpinning of value that the updated PEA highlights", said president and CEO Luke Alexander.

The Enchi mine would produce 104 171 oz/y of gold in years two to five and 983 296 oz/y recovered over the 11-year mine life.