The recent surge in gold and copper prices has had a profound impact on the valuation of Lumina Gold's Cangrejos project in Ecuador, as detailed by CEO Marshall Koval. The project's net present value (NPV) has seen an 85% increase, jumping from $2.2 billion to approximately $4.2 billion, with the internal rate of return (IRR) climbing from 17.2% to 27%. This dramatic rise is attributed to the current gold prices of $2,350 per ounce and copper at $425 per pound, up from $1,650 and $375 respectively during the pre-feasibility study in early 2023.
Despite these favorable market conditions, Koval pointed out a disconnect between the market valuation of gold equities and the physical prices of gold. Lumina Gold's share price has not reflected the significant increase in gold prices or the 400% growth in project reserves since 2017. This gap suggests a potential for substantial value appreciation in the company's stock, offering an attractive prospect for investors.
Looking ahead, Lumina Gold is making steady progress on its feasibility study, set to be completed by May 2025. The company has already completed major fieldwork and is conducting metallurgical testing to further ensure the project's viability. Financial stability is secured through funding from the Wheaton stream, and environmental assessments are expected to begin shortly. With these developments, Lumina Gold is well-positioned to leverage the increasing demand for gold and copper, promising a bright future for its projects.
