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Solitario (SLR.T) and  joint venture partner Ely Gold (ELY.V) have released an NI 43-101 Feasibility Study on the Mt. Hamilton project in Nevada. The project is on track to become one of Nevada's newest gold producers and shows positive economics. The next major step will be to close project financing.

The Feasibility Study is an update from a 2012 Feasibility Study and incorporates additional drilling, engineering, and detailed mine planning. The Mt. Hamilton project is 80% owned by Solitario and 20% by Ely Gold. All required permits are expected before the end of 2014 and if everything goes according to plan management hopes to begin construction in the spring of 2015.

Feasibility Study highlights:

  • Initial Capital Cost: $91.7 M (includes $9.0 M contingency)
  • Sustaining Capital: $29.8 M (includes $2.4 M contingency and $10.1 M end-of-mine closure costs)
  • Cash Costs per Gold-Equivalent (“AuEq”) Ounce* Recovered: $558
  • Avg. Annual AuEq Production: 73,000 oz (during 6.1 year active mining period)
  • 26% IRR (after tax) and 2.9 year payback period on initial capex

* FS uses $1300 gold and $20 silver

Chris Herald, President and CEO of Solitario stated, "We are very pleased with the outcome of the 2014 FS. Cash flow in the initial years is substantially increased, resulting in enhanced project economics. Mt. Hamilton represents one of the highest grade, lowest cost, open pit heap leach gold projects in Nevada. The results of the updated 2014 FS put the project in a stronger position to complete project financing. We have been very encouraged with our discussions to date with various financial institutions, and we are taking a measured approach to assure the best possible outcome."

Solitario stock is a very thin trader with only 39.25 million shares outstanding. The stock appears to be flying under the radar of investors which should change when project financing is complete.  Of note is that Sandstorm owns a 2.4% NSR purchased for $10 million upfront back in June 2012.

Solitario stock chart

Symbol: SLR.T

Share price: $1.10

Shares outstanding: 39.25 M

Market cap: $43.2 M

Cash + Investments: ~$5 million (September)

Read: Solitario Announces Updated Mt. Hamilton Feasibility Study; Significantly Higher Production, Grade and Increased Resources

I have no position in any of the stocks mentioned. This is not investment advice. As always please do your own due diligence.