Meridian Mining estimates US$322M cost to build Cabaçal mine

Meridian Mining plc (TSE: MNO) (OTCMKTS: MRRDF) (LON: MNO) reported on Tuesday that its Cabaçal gold-copper-silver project in Brazil has an estimated after-tax net present value of US$2.09 billion. The definitive feasibility study estimates US$322 million in initial construction costs, while financing and the mine installation licence remain pending.

Shares rose 10.3 per cent to 108.50 pence by 9:58 a.m. in London on Tuesday. Before the announcement, the stock closed at C$1.87 in Toronto at 4 p.m. on Monday, up 3.3 per cent.

The Sept. 22 study assumes gold at US$3,570 an ounce and copper at US$5.03 a pound, alongside silver at US$50.17 an ounce. It projects a 108 per cent internal rate of return and a 0.9-year payback, using a five per cent discount rate for net present value.

Meridian said on Tuesday it had committed US$15.9 million to preconstruction contracts and started offsite civil works at the Mato Grosso project. A power-line installation licence has been granted, while the mine's application has been lodged. Management will discuss the study at a webcast on Tuesday afternoon.

"Installation licence permitting has been lodged, and financing activities to construct Cabaçal are progressing," chief executive Gilbert Clark said in the release.

The Sept. 22 initial capital estimate includes a 10 per cent contingency and is net of US$21 million in tax credits. A further US$56 million is allocated to expansion. Processing capacity would increase to 4.5 million tonnes annually from the fourth year.

Over a 13.9-year mine life, the operation would produce an average of 112,900 gold-equivalent ounces annually. The Sept. 22 study forecasts higher production in the first five years, averaging 183,526 gold-equivalent ounces a year at all-in sustaining costs of US$715 an ounce.

The March 2025 preliminary study estimated initial capital at US$248 million and after-tax net present value at US$984 million. It used gold at US$2,119 an ounce and copper at US$4.16 a pound, so the valuation increase also reflects higher assumed metal prices.

Meridian's Sept. 22 sensitivity case values Cabaçal at US$2.90 billion using Sept. 10 prices. That calculation uses historical prices, including gold at US$4,394 an ounce, rather than Tuesday's market.

The unchanged resource estimate is effective Dec. 31, 2025. It contains 64.69 million measured tonnes and 5.41 million indicated tonnes, with no inferred material classified inside the pit constraints. Together, those categories average 0.56 grams per tonne gold and 0.33 per cent copper. The resource cut-off is 0.117 grams per tonne gold equivalent.

Meridian's next scheduled event is its study webcast at 3 p.m. UK time on Sept. 22, with a management presentation followed by questions.