Meridian Mining’s Cabaçal DFS Delivers 108% IRR on $322M Build

Meridian Mining has released a definitive feasibility study for its Cabaçal gold-copper project in Brazil that puts a 108% after-tax internal rate of return on a mine that can be built for $322 million.

In a development pipeline where DFS-stage projects routinely report IRRs in the 20-30% range, that figure demands scrutiny from anyone weighing exposure to Brazilian gold-copper.

The study, effective 15 September 2026 and completed by Ausenco, follows several years of equity-funded development and a pre-feasibility study that was already considered unusually strong. Its release lands at a pivotal moment.

Meridian is now engaging up to 30 potential lending groups while an Installation Licence application sits under review with Mato Grosso’s environmental regulator, placing Cabaçal at the crossing point between study stage and construction decision.

This article gives you what you need to judge whether the headline economics are as durable as they look. That means the capital structure behind the numbers, the price assumptions driving them, the permitting runway still ahead, and how Cabaçal actually stacks up against its peer field.

What the DFS numbers actually say about Cabaçal’s economics

The base case delivers an after-tax NPV5 of $2.092 billion and an IRR of 107.6%, built on a price deck of gold at $3,570/oz, copper at $5.03/lb, and silver at $50.17/oz. Those prices matter, because they are what the headline return is priced against.

The capital efficiency is where the study separates itself. Initial pre-production capex sits at $322 million net of tax credits, with $56 million in expansion capex and $74 million in sustaining capex across the mine life.

That produces an NPV/capex multiple of 6.5 times at base case, the single clearest expression of how much value the study attaches to each dollar of build cost.

The production profile supports the picture. The first five years average 183,526 gold-equivalent ounces per year at an all-in sustaining cost of $715/oz, feeding a life of mine of roughly 14 years and total after-tax free cash flow of $2.9 billion.

The copper blister quality achieved at Cabaçal, grading at 98.9%, adds a product premium dimension to the revenue model that the headline NPV figures do not fully surface on their own.

Then there is the payback: 0.9 years, or about ten months from first production. This is the number CEO Gilbert Clark has anchored his financiability argument on, and it is the one that matters most for lending conversations.

A sub-one-year payback tells prospective lenders that, at DFS prices, their capital is theoretically returned before the mine reaches its second anniversary of production. For a project in this asset class, that is a structurally unusual position to be in.

The spot-price sensitivity case pushes the economics further, using gold at $4,394/oz, copper at $6.53/lb, and silver at $64.14/oz.

The full capital and production detail lets you calculate your own entry-price sensitivity rather than leaning on the IRR headline alone.

Gilbert Clark, CEO, Meridian Mining Clark has characterised Cabaçal as a potentially near-term VMS gold and copper mine on a global scale, positioning it as a conservatively engineered design built to be financed and constructed.

How Cabaçal’s IRR holds up against the peer field

Set Cabaçal beside comparable gold-copper development projects and the gap is immediate. Euro Sun Mining’s Rovina Valley reports an IRR of roughly 24.1% on an NPV of about $667 million. Celsius Resources’ MCB project in the Philippines carries an IRR of 24.1% and an NPV of $771 million. Copper Flat sits lower again at 21.1% and $240 million.

Against a peer field clustered in the 20-30% IRR band with NPV/capex ratios around 2-3 times, Cabaçal is a statistical outlier. Even its own predecessor PFS was strong, reporting an NPV5 of $984 million, an IRR of 61.2%, and a 17-month payback on $248 million of capex.

The price-deck gap and what it means for sensitivity analysis

Part of that gap is a price story, and it is worth being precise about where.

The DFS cash-flow model runs on gold at $3,570/oz. Yet the mineral resource classification inside the same study package uses the CIBC analyst consensus deck from November 2025: gold $3,103/oz, copper $4.39/lb, silver $35.34/oz.

So the returns are calculated on a more bullish set of prices than the consensus figures used to classify the ore that generates them. Reversion toward that consensus deck would pull both the headline IRR and the NPV/capex multiple down from DFS levels, though no revised figure is published.

The structural advantages are genuine and survive a price adjustment: the VMS deposit type, the sub-one-year payback, and low initial capex relative to NPV. The read you should take is to stress-test the economics against the more conservative CIBC prices before forming a position. Notably, no VMS development project with an IRR above 80% and NPV/capex above 5 times has yet reached production and reported realised outcomes in the available data, so there is no completed precedent to benchmark against.

Where permitting and financing stand ahead of a construction decision

Brazil’s environmental licensing runs through three sequential gates, and Cabaçal has cleared the first but not the others.

1. Preliminary Licence (LP): Approved. Mato Grosso’s CONSEMA council voted unanimously on 29 October 2025, formalised on 3 November 2025.
2. Installation Licence (LI): Submitted. Full documentation went to the state environmental secretariat SEMA on 19 May 2026 and remains under review as of the DFS release.
3. Operation Licence (LO): Not yet relevant. It applies only once construction is complete.

An Installation Licence for the Cabaçal power line has already been granted, showing movement on infrastructure permitting. Meridian’s July 2026 investor presentation targets the main LI grant for Q1 2027.

The financing side is further advanced. In February 2026 the company closed a CAD 57.5 million bought-deal financing alongside a GBP 25 million London Main Market placement.

The LSE listing and PFS context for Cabaçal established the equity base and institutional investor profile that Meridian drew on when structuring the February 2026 bought-deal and London placement, making it a useful reference point for understanding how the capital raises preceding the DFS were positioned.

Gilbert Clark, CEO, Meridian Mining Clark stated in February 2026 that the company is “financed beyond Cabaçal’s final investment decision into early construction works,” targeting a restart of production by end-2028 subject to licence approvals.

Meridian also reports $15.9 million in committed capital contracts already executed for long-lead procurement, a company disclosure not independently verified by third-party sources. A data room is now open to up to 30 lending groups.

The Installation Licence is the rate-limiting variable on the whole timeline. Until SEMA grants it, no mining concession can be issued and no construction can begin, which makes the Q1 2027 target the single date to track above all others.

Brazilian permitting is where that risk concentrates. Combined timelines typically run 36-84 months, against 12-18 months in Chile and 18-24 months in Australia. Cabaçal has cleared the LP and is funded past its investment decision point, but the LI and third-party project finance remain the two live unknowns that will decide whether the end-2028 production target holds.

Brazil’s investment environment for gold-copper projects: what the framework adds and what it costs

Brazil offers real structural advantages for a project like Cabaçal. The federal government has actively promoted foreign investment in critical minerals, formalised in its 2026 guide for foreign investors, and the VMS belts of Mato Grosso come with grid access, road access, and established regional operating knowledge.

The fiscal burden is moderate by global standards, but it stacks. The federal mining royalty (CFEM) runs at roughly 1.5% of gross revenues for gold and 2-3.5% for copper.

Brazil’s CFEM mining royalty framework sets gold royalties at approximately 1.5% of gross revenues and copper royalties in the 2-3.5% range, with the ANM administering collection and distribution across federal, state, and municipal recipients.

On top of that sit several distinct obligations:

• CFEM: the federal mining royalty, gold ~1.5%, copper 2-3.5% of gross revenues
• Landowner royalties: equal to 50% of the CFEM paid to government
• TFRM: sector-specific state taxes
• TAH: annual per-hectare fees on the concession area
• Withholding tax: profit repatriation permitted, subject to withholding in the 15-25% range, structurable via tax treaties

That combination is competitive against many jurisdictions. The cost shows up not in tax rates but in time.

Regulatory tracks and the permitting bottleneck

Two agencies run on parallel, unsynchronised tracks. The ANM governs mineral rights, while SEMA-MT handles state environmental licensing, and the two do not move in step.

Brazil’s fast-track mining reforms introduced in 2026 were designed to compress ANM processing timelines for critical minerals projects, though their practical effect on state-level SEMA environmental licensing, the gate that controls Cabaçal’s timeline, remains limited.

The consequence is direct: the ANM will not grant a mining concession until the Installation Licence is in place. A delay in a single environmental licence can therefore block the concession entirely, which is why Brazil’s 36-84 month permitting range is the structural risk that matters more than any royalty line.

There is a reputational dimension too. Investigative reporting on irregular licensing and illegal gold across Brazil’s broader sector can shape regulator posture and timelines, even for a formally structured project like Cabaçal.

For an international investor, the Brazil premium in DFS economics has to be weighed against the Brazil discount in permitting predictability. The same jurisdiction offering low royalties and grid-connected infrastructure also carries schedules that can run well past the timelines a DFS model assumes.

What Cabaçal’s DFS means for investors weighing entry now

Three things are resolved, and three remain open. Holding both sets in view is the whole task here.

Resolved:

• DFS economics that remain statistical outliers even after adjusting for the price deck
• A sub-one-year payback that materially strengthens the financing case
• Equity funding that carries the company past its final investment decision point

Open variables:

• The SEMA Installation Licence decision, targeted for Q1 2027
• Third-party project finance from the 30-group data room process
• Commodity prices holding near DFS assumptions through construction

Entering now effectively means taking a position on three concurrent outcomes: that SEMA grants the LI on or near target, that project finance closes on terms consistent with the DFS capital structure, and that prices hold close enough to preserve the headline economics through to first production.

Innovative mining financing structures that blend bought-deal equity, streaming agreements, and milestone-based debt tranches have become more common as project developers attempt to reduce lender risk perception by demonstrating accelerated payback profiles before the data room opens.

The company has $15.9 million in pre-construction capital under contract (its own disclosure) and a stated end-2028 production target, all subject to outcomes it does not control.

The catalyst to watch The Q1 2027 Installation Licence target is the nearest-term binary event for Cabaçal. No LI means no mining concession and no construction, regardless of how strong the economics look on paper.

The headline sensitivity to carry into any analysis is the gap between the DFS base case and the CIBC consensus deck. Track each variable as it resolves, and the DFS becomes a framework you can update rather than a number you take on faith.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.

Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors. Forward-looking statements regarding permitting, financing, and production timelines are speculative and subject to change based on regulatory decisions, market developments, and company performance.