Sonoro Gold Corp (TSX-V:SGO, OTCQB:SMOFF, FRA:23SP) has refreshed the investment case for its Cerro Caliche gold project in Mexico, with a new resource estimate and an updated preliminary economic assessment that values the proposed operation at an after-tax NPV(8%) of $224 million and an after-tax IRR of 50% (under a $3,500/oz gold price deck).

The study outlines a 10-year, open-pit heap-leach operation with a one-year ramp-up at 12,000 tonnes per day before rising to 16,000 tonnes per day for the remainder of the mine life.

On the company’s assumptions, the project would produce 459,000 ounces of gold equivalent over the life of mine, averaging 46,000 ounces a year, with recoveries of 72% for gold and 27% for silver.

“This updated PEA and MRE clearly illustrates a significant increase in value of the Cerro Caliche project as a result of higher gold prices and a revised mine plan with increased production rates,” said chief executive Kenneth MacLeod.

“With less than 30% of the known mineralized zones at the original Cerro Caliche concession drilled and assayed to date and the recent near-tripling of the concession size to the north and south, the potential for future expansion of the proposed mine, both in capacity and LOM, are considered to be favourable.”

Upfront capital is estimated at just $83 million, including an $11 million contingency, with sustaining capital of $26 million. Cash operating costs are forecast at $1,842 per gold-equivalent ounce and all-in sustaining costs at $1,902 per ounce, with a stated payback period of 1.7 years in the base case.

The updated resource model, prepared under NI 43-101, shows measured and indicated resources totalling 644,000 ounces of gold equivalent at 0.39 g/t, plus inferred resources of 97,000 ounces at 0.34 g/t, all within an optimized pit shell.