en.Wedoany.com Reported - Falco Resources (TSXV: FPC) saw its shares surge after an updated feasibility study for the Horne 5 polymetallic project in western Quebec showed the project’s value more than doubled, while the provincial environmental review nears completion.
Under a 5% discount rate, the updated Horne 5 project has an after-tax net present value (NPV) of C$3.35 billion, a 244% increase from the 2021 feasibility study. Initial capital costs rose 62% to C$1.75 billion. The project’s internal rate of return improved by nearly 10 percentage points to 28%. Glencore (LSE: GLEN) holds the development rights to the project and operates a nearby smelter. The project is located approximately 630 km northwest of Montreal.
BMO Capital Markets analyst Andrew Mikitchook said in a report on Thursday that these developments are significant de-risking milestones, welcomed by the market, and provide further basis for subsequent revaluation. The market will focus on near-term financing plans and visibility into full construction financing to drive the Horne 5 project forward.
The updated report, released on Wednesday, solidifies Horne 5’s position as one of Quebec’s largest advanced undeveloped polymetallic projects. Falco continues to seek financing and permits for the proposed underground mine near Rouyn-Noranda. In Toronto on Thursday morning, the company’s shares rose 17% to C$0.59 per share, after hitting an eight-year intraday high of C$0.65 per share the previous day. The company’s market capitalization is close to C$205 million.
Over a 15-year mine life, the mine is expected to produce 3.3 million ounces of gold, 27.2 million ounces of silver, 1.1 billion pounds of zinc, and 247.3 million pounds of copper. Falco has entered into off-take agreements with Glencore for copper and zinc concentrates produced from the Horne 5 project. While expected production is broadly in line with the 2021 study, the updated report assumes higher metal prices: gold at $3,600 per ounce, silver at $50 per ounce, copper at $4.80 per pound, and zinc at $1.35 per pound.
Falco first submitted the environmental impact assessment for the Horne 5 project in December 2017, and has since undergone provincial reviews, information requests, and public hearings. Falco said on Monday that Quebec’s Ministry of the Environment expects to complete its acceptability analysis by fall 2026. The updated report confirms proven and probable reserves of 80.9 million tonnes, grading 1.44 grams per tonne gold, 14.1 grams per tonne silver, 0.17% copper, and 0.77% zinc, equivalent to approximately 3.74 million ounces of gold, 36.7 million ounces of silver, 303 million pounds of copper, and 1.37 billion pounds of zinc.
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