Mineros gains on Povernir build permit in Nicaragua

The forestry permit covers mining activities only. Mineros needs several more permits before starting ore processing, such as an environmental permit an occupational health and safety licence, and water development and wastewater discharge permits.

Mineros (TSX: MSA) has received the permit it needs to start building its underground mine at the Porvenir project in northeast Nicaragua. Shares gained 7%.

Its subsidiary Hemco Mineros Nicaragua announced on Wednesday it received the forest harvesting permit required to kick off the $166 million (C$229 million) project. Mineros expects production at Porvenir to start in 2027. The project lies 10.5 km southwest of Mineros’ existing Hemco facilities near Bonanza in Nicaragua’s so-called ‘Golden Triangle.’

“Receiving the permit for construction of the Porvenir underground mine is a major step forward,” president and CEO David Londoño said in a release.

Toronto-listed shares in the company gained 14¢ on Wednesday to $2.11 by midday, giving it a market cap of $629.4 million. Shares have ranged between $95¢ and $2.62 over the past 12 months.

Porvenir is in Nicaragua’s top mining area, which has over 30 mines and sits on the Central American gold belt. The region has helped Nicaragua become a key draw for mining investment in recent years. Peer companies active in Nicaragua include Calibre Mining (TSX: CXB), which operates the La Libertad mine and mill; as well as OceanaGold (TSX: OGC), Mako Mining (TSXV: MKO) and Sailfish Royalty (TSXV: FISH).

The forestry permit covers mining activities only. Mineros needs several more permits before starting ore processing, such as an environmental permit an occupational health and safety licence, and water development and wastewater discharge permits.

9-year-life

Porvenir could produce about 56,700 oz. gold, 112,300 oz. silver and 38.5 million pounds zinc over a nine-year mine life, according to a 2023 pre-feasibility study (PFS).  It has a base-case after-tax net present value (at 10% discount) of $42 million, an internal rate of return of 16% and a payback period of four years. Initial capital costs are estimated at $166 million.

Porvenir’s life-of-mine all-in sustaining cost is projected at $929 per oz. gold-equivalent sold.

Sizeable deposit

Porvenir hosts proven and probable reserves of 5.8 million tonnes grading 3.07 grams gold per tonne, 10 grams silver and 3% zinc for 572,000 oz. of contained gold, 1.92 million oz. silver and 379 million lb. zinc, according to the PFS. The combined measured and indicated resources stand at 1 million tonnes grading 2.4 grams gold, 8 grams silver and 3% zinc for 78,000 oz. gold 270,000 oz. silver and 58 million lb. zinc.

It also holds 1.7 million tonnes at 2.4 grams gold, 12 grams silver and 3.6% zinc for 132,000 oz. gold, 656,000 oz. silver and 136 million lb. zinc.

An updated pre-feasibility study is expected by year-end.

Mineros calls Porvenir a volcanic gold, zinc and silver deposit. It features intermediate-sulphidation epithermal quartz veins. In last year’s fourth quarter, the company improved Porvenir’s geometallurgical model and geomechanical assumptions. That helped boost recoveries to 63.4% for gold, 52.6% for silver, and 84% for zinc. These numbers back the planned cut-and-fill and sublevel stoping methods.