Meridian’s Cabaçal value doubles on higher prices

Meridian Mining (TSX, LSE: MNO; US-OTC: MRRDF) has more than doubled the estimated value of its Cabaçal gold-copper project in Brazil in a new feasibility study, although the gain rests heavily on higher metal-price assumptions. The stock jumped.

The study puts Cabaçal’s after-tax net present value (NPV) at $2.09 billion (C$2.93 billion), its internal rate of return at 108% and payback at about 11 months. The estimates use $3,570 per oz. gold, $5.03 per lb. copper and $50.17 per oz. silver.

Initial capital is pegged at $322 million, up from $248 million in the March 2025 prefeasibility study, which used $2,119 per oz. gold, $4.16 per lb. copper and $26.89 per oz. silver and returned a $984-million NPV.

“Overall we view the feasibility study update as positive for Meridian shares: the new study outlines a robust project with manageable capex,” Scotiabank mining analyst Eric Winmill said in a note Tuesday. “We look forward to further updates on next steps and financing in advance of construction startup.”

Shares in Meridian Mining gained 18% to an all-time high of $2.21 apiece on Tuesday morning in Toronto, valuing the company at $1.07 billion.

Staged open pit

Cabaçal is a past-producing volcanogenic massive sulphide deposit in Mato Grosso state. Meridian proposes a staged open-pit operation that mines for about 10 years and processes stockpiles for a total 13.9-year life. A final investment decision depends on construction financing, the project’s installation licence and land-access agreements.

The plan is based on 56.04 million proven and probable tonnes grading 0.61 gram gold per tonne, 0.35% copper and 1.33 grams silver for 1.11 million oz. contained gold, 430 million lb. copper and 2.39 million oz. silver. Reserve tonnage is 34% higher than the 41.7 million tonnes used in last year’s study.

Meridian expects to recover 983,500 oz. gold, 180,600 tonnes copper and 1.78 million oz. silver over the mine life. On a combined basis, the operation is forecast to produce an average 183,500 gold-equivalent oz. annually during its first five years at all-in sustaining costs of $715 per ounce. Life-of-mine output averages 112,900 gold-equivalent oz. at $1,056 per ounce.

Higher-grade feed

The early economics benefit from front-loaded higher-grade feed. Plant material in the first year is expected to average 2.8 grams gold, 0.71% copper and 2.69 grams silver, compared with reserve grades of 0.61 gram gold, 0.35% copper and 1.33 grams silver. Average annual after-tax free cash flow is forecast at $414 million during the first five years and $2.87 billion over the mine life.

The plant would process 1.93 million tonnes in its first year, rise to 2.5 million tonnes in years two and three and expand to 4.5 million tonnes annually from year four. The expansion is expected to cost another $56 million, while sustaining capital is estimated at $74 million and closure at $59 million before a $23-million salvage credit.

The initial estimate includes a 10% contingency and deducts $21 million in Brazilian tax credits. Meridian attributed the increase from the prefeasibility study to inflation, the stronger Brazilian real, more detailed engineering and revisions to grinding, filtration and off-site infrastructure. Operating costs also rose because of higher power and reagent prices, reaching $22.41 per tonne milled after tax credits.

An illustrative spot-price case raises the after-tax NPV to $2.9 billion and the IRR to 135%, but it assumes $4,394 per oz. gold, $6.53 per lb. copper and $64.14 per oz. silver. Scotiabank estimates that Meridian trades at 0.33 times its spot-price net asset value, compared with 0.42 times for gold-development peers. Winmill maintained a sector outperform rating and C$3 target.

Financing, permits

Meridian received Cabaçal’s preliminary licence in October 2025 and submitted its installation licence application in May. The application remains under review by Mato Grosso’s environmental regulator, while the company has received a separate installation licence for a planned 24-km, 138-kilovolt transmission line.

The mine plan remains within the footprint approved under the preliminary licence even though the underlying resource has grown. A larger pit or materially higher mined volumes would require an amendment that could extend the development schedule, Scotiabank said.

Meridian has committed $15.9 million to pre-construction work and opened a data room for as many as 30 potential lenders. It has started ordering long-lead equipment, including the SAG and regrind mills, and is reviewing proposals for the engineering, procurement and construction management contract. The full technical report is due within 45 days, after which lenders can complete detailed due diligence.

The company raised £25 million ($34 million) with its London market debut in May, following a C$57.5-million financing in February to fund early works and exploration. They’ve traded between C$1.01 and C$2.16 over the past year.

“Installation licence permitting has been lodged, and financing activities to construct Cabaçal are progressing,” CEO Gilbert Clark said in a release. “Importantly, the study is based on a conservatively engineered mine design, that can be financed and built.”