Omai Gold Mines assigns $4 billion value to Guyana project in new study
A new preliminary economic assessment values Omai Gold Mines’ Guyana redevelopment at $4 billion, positioning the past-producing asset as a potential acquisition target for major miners despite a modest initial market reaction.
Omai Gold Mines has assigned a $4 billion net present value to its namesake redevelopment project in Guyana, according to a newly released preliminary economic assessment. The study outlines an 18-year mine life capable of producing 6.3 million ounces of gold, assuming a $3,600 per ounce metal price and a 5% discount rate.
Initial capital costs for the massive undertaking are estimated at $1.42 billion, yielding a 24% internal rate of return and a 4.1-year payback period. Despite these robust project economics, shares in the Toronto-listed explorer fell 1% to C$2.96 on Wednesday, leaving the company with a market capitalization of C$2 billion.
National Bank of Canada analyst Rabi Nizami noted that the study validates a globally relevant scale and long-life production profile. He highlighted that the project offers better throughput and strip ratios than previously expected, though these benefits are offset by the substantial upfront capital requirements. Nizami expects sustained investor interest, suggesting the asset is emerging as a clear merger and acquisition target for global intermediate and large-cap producers.
Chief Executive Elaine Ellingham emphasized the distinct advantages of redeveloping a past-producer, which originally yielded over 3.7 million ounces between 1993 and 2005. She pointed to existing infrastructure, including highway access, a cleared site, an on-site airstrip, and a tailings facility. These historical elements, combined with known metallurgy, provide a significant leg up for the redevelopment effort in a country that has become a stable mining jurisdiction.
The updated assessment covers both the open-pit Wenot and underground Gilt deposits, vastly expanding the scope of an April 2024 study that valued the project at $556 million. While the expanded project produces 1.9 million more ounces over a longer lifespan than G Mining Ventures’ nearby Oko West, the competing project boasts a higher internal rate of return and significantly lower initial capital requirements.
Omai currently reports 2.5 million indicated ounces grading 2.04 grams per tonne, alongside 5.5 million inferred ounces across the site. Drilling remains active at the Wenot deposit with five rigs currently turning. Ellingham indicated this ongoing exploration could unlock further resource growth at the site, which sits 165 kilometers south of the capital, Georgetown.
