Amarillo Gold has completed a pre-feasibility study (PFS) on its Posse gold deposit in the Mara Rosa gold project in Goias, Brazil.
According to the PFS completed by Coffey Mining International, the deposit has total proven and probable reserves of 17 million tons at 1.72g/t and 945,200 ounces of contained gold.
The Posse deposit will have an initial mine life of seven years, with production output of 2.5 million tons a year and average gold production of 124,000 ounces a year.
The total cash operating cost will be $524/ounce, with total gross revenue estimated at $1bn assuming a gold price of $1200/ounce.
Estimated start-up capital of the project is $184m, which will include working capital of $5.4m.
Amarillo Gold will now proceed with the feasibility study on the deposit, which is expected to be completed during 2012.