Turner Pope Investments13 Feb 2026 14:14
TPI has updated its prudent conceptual economic model for
the deposit. Orosur, of course, has multiple options in terms of its future mine scheduling and production. In order
to illustrate one possible scenario, however, TPI has envisaged Pepas’s evolution into an exceptionally low-cost,
high recovery open pit mine, requiring only simple on-site crushing (i.e., comminution to break down larger
fragments and liberate gold from the surrounding rock), before being transported to a third-party toll processor.
Note that a number of mills located less than 200km from Pepas and available to take additional high-grade feed
have already been identified, suggesting Orosur will be well positioned to negotiate a competitive rate (perhaps
giving <0.3g/t or less) for grinding, concentration and smelting/refining, possibly with a view to forming Doré bars
as an intermediate product. Another alternative could be to produce a gold/sulphide concentrate (such as is already
being done at the nearby Zancudo mine) which can then be sold direct to metal traders, such as Trafigura; this
would reduce truck movements and potentially open the option of using pre-payment to support construction.
TPI’s updated model for Pepas assumes extraction, loading and crushing plant will be delivered/commissioned in
Years 1 and 2, for a total initial capex of US$16m, following which the annual spend is expected to fall sharply to a
low rate of c.US$1m. Given the near surface/low strip resource, TPI estimates a low peak cash costs of just
US$810/oz Au and a revised average all-in-sustaining cost (‘AISC’) of US$1,281/oz (up slightly from US$1,228/oz
suggested previously). Additional projected costs have been added to this, including expenditure required to sustain
the facility, Colombian State royalty (4%), Newmont/Agnico’s 1.5% NSR fee plus its US$75/oz fixed royalty on the
first 200k oz Au produced at the Project. Within this, it should be noted that Orosur exercised a buyback option to
acquire these royalties on 10 September 2024, entitling it to alternatively pay US$5m for each 0.25% NSR interest,
ultimately reducing Newmont and Agnico to just 0.25% NSR apiece in the event they wish to sell their respective
NSR royalties to a third party.
The model below, which is now based on a spot gold price of US$4,400/oz throughout (compared with US$3,300
previously), assumes a high c.88% of the total Au estimated resource is economically mined over a 12-year LOM.
Colombia’s 35% Au-production mining corporate tax rate has also been applied. This suggests Pepas is capable of
delivering very positive project metrics, including an NPV10% of US$189.15m and an exceptional IRR of 162% with a
Payback Period of just 2.29 years.
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