South West Deposit PEA Highlights
- After Tax Net Present Value at a 5% discount rate (“NPV5%”) of C$236 million and after-tax Internal Rate of Return (“IRR”) of 30% at US$1,500/oz gold and exchange rate of US$0.77/C$
- C$371 million after tax cash flow over the life of mine
- 75,700 ounces annual production during full production for 719,000 ounces total gold production
- Peak gold production of 85,700 ounces per annum
- Cash cost of US$590 per ounce and all in sustaining cost of US$747 per ounce gold
- Highly leveraged to the gold price with after tax NPV5% of C$423 million and 47% IRR at US$1,900 per ounce gold
- Initial capital of C$144 million, and sustaining capital of C$136 million
- After-tax discounted pay-back of 3.4 years, with an 11 year mine life
- Attractive alternative Toll Milling development option with after-tax NPV5% of C$197 million and IRR of 44% at US$1,500 gold with initial capital costs of C$65 million
- Potential to expand production from additional deposits located on the Golden Highway Project
GOLDEN HIGHWAY RESOURCE TABLE
| Deposit Name |
Cut-off Used (Au g/t) |
Indicated | Inferred | ||||
|---|---|---|---|---|---|---|---|
| Tonnes (t) |
Grade (g/t) |
Ounces (oz) |
Tonnes (t) |
Grade (g/t) |
Ounces (oz) |
||
| South West | 2.6 | 4,530,000 | 4.07 | 592,400 | 9,607,000 | 4.01 | 1,237,900 |
| Windjammer South | 3.0 | 364,000 | 4.19 | 49,100 | 173,000 | 4.59 | 25,500 |
| 55 | 3.0 | 216,000 | 5.11 | 35,400 | 327,000 | 4.31 | 45,300 |
| West Block | 3.0 | – | – | – | 301,000 | 3.23 | 31,200 |
| Discovery | 3.0 | – | – | – | 108,000 | 4.12 | 14,300 |
| Windjammer North | 3.0 | – | – | – | 265,000 | 3.80 | 32,400 |
| Total | 5,110,000 | 4.12 | 676,900 | 10,781,000 | 4.00 | 1,386,600 | |
Notes:
- Mineral Resource Estimates are reported at a cut-off grade of 3.00 g/t Au for an underground mining scenario, except for the South West zone which used the cut-off determined in this PEA (2.6 g/t). The cut-off grade was calculated at a gold price of US$1,250 per ounce, an exchange rate of US$/C$ of 0.75 and operational assumptions outlined in Section 14 of this report. The cut-off for the South West zone was derived by calculations presented in the mining sections of this report.
- The resource estimate is supported by statistical analysis with different high-grade capping applied to each of the deposits ranging from 6.0 g/t Au to 37.0 g/t Au on 1-m composites.
- The mineral resources presented here were estimated with a block size of 10 m x 5 m x 10 m utilizing sub-blocks of variable size as required, and constrained within geological wire frames with a minimum width of 1.50 m, except for the South West update. There the mineral resources were estimated using a sub-blocked model with a parent block size of 15 m x 5 m x 15 m and child block size down to 5 m x 1 m x 5m utilizing these sub-blocks as required and constrained within geological wire frames with a minimum width of 1.50 m. The cells are estimated by Ordinary Kriging using the appropriate variogram model of each structure with individual search ellipsoids.
- The mineral resources presented here were estimated by Micon International Limited using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definitions and Standards on Mineral Resources and Reserves.
- Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, market or other relevant issues.
- The quantity and grade of reported Inferred Resources are somewhat uncertain in nature and there has not been sufficient work to define these Inferred Resources as Indicated or Measured Resources.
- There are no historical underground voids from mining including shafts, ramps drifts or stopes in any of the deposit areas.
- Tonnage estimates are based on bulk densities individually measured and calculated for each of the deposit areas, averaging 2.78 tonnes per cubic metre for the total resource. Resources are presented as undiluted and in situ.
- The mineral resource estimates for South West and West Block are dated September 09, 2020. All other zones are dated January 15, 2019. The effective date for the drill hole database used to produce this updated mineral resource estimate for South West and West Block is November 26, 2019 and November 19, 2018 for the other zones. Tonnages and ounces in the tables are rounded to the nearest thousand and hundred respectively. Numbers may not total precisely due to rounding.
- At the present time, Micon does not believe that the mineral resource estimate is materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.