Pure Gold’s Madsen PEA estimates NPV of $365M
Pure Gold Mining Inc.’s Madsen PEA estimates the project has a pretax net present value of $365-million. The project will also have an internal rate of return of 54 per cent and preproduction capital expenditures of $51-million.
PURE GOLD Mining Inc. has released results of a new preliminary economic assessment (PEA) on its 100-per-ce nt-owned Madsen gold project in the Red Lake mining district of Ontario, Canada. The PEA, based on an updated resource estimate , shows a robust 14-year underground mining operation with highly attractive economics at base-case metal prices.
PEA highlights: Base-case parameters assume a gold price of $1,275 (U.S.) per ounce and an exchange rate (Canadian dollars to U.S. dollars) of 0.80.
• Pretax NPV5 (net present value at a 5-per-cent discount) and IRR (internal rate of return) of $365-million and 54 per cent, respectively, with a 2.7-year payback of initial capital;
• Aftertax NPV5 and IRR of $258-million and 47 per cent, respectively, with a 2.8-year payback of initial capital;
• Mine life is of 14 years with a 12-month preproduction period; • Life-of-mine (LOM) diluted head grade of 10.3 g/t gold;
• Average annual gold produc tion i n years three through nine of approximately 75,500 ounces, with peak annual production of approximately 85,000 ounces;
• LOM direct operating cash cost is estimated at $595 (U.S.) per ounce of gold recovered;
• LOM operating cash cost plus sustaining cost is estimated at $714 (U.S.) per ounce of gold recovered;
• Preproduction capital cost estimated at $50.9-million which includes a 15-per-cent contingency;
• LOM sustaining capital costs estimated at $134.7-million which includes a 5-per-cent contingency.
(See PGM Table 1 on page 23)
Over the coming months, the company will be focused on:
• Completing a detailed project development schedule which will provide a critical path to a production decision;
• Resource definition drilling from the Madsen ramp;
• Exploration drilling from surface;
• Resource modelling of satellite deposits with a goal of releasing an updated mineral resource estimate for Madsen in the fourth quarter of 2017;
• Continuing environmental baseline work.
“With a significantly expanded resource, access to infrastructure and exceptional growth potential, Madsen is one of the outstanding gold deposits in Canada,” stated Darin Labrenz, president and chief executive officer of Pure Gold. “The completed study provides a measure of these attributes, outlining a long-life high-margin mine, with low initial capital require ments an d a fast timeline to production. In addition, we have identified specific exploration targets and potential optimization opportunities that could further enhance the economics of the project. We look forward to rapidly advancing the Madsen gold project to become Ontario’s next gold mine.”
We seek Safe Harbor.
Erika Flores condensed this news release (email@example.com).
Lenard F Boggio, Dougald Graeme Currie, Troy John Fierro, Darin Mark Labrenz, Mark Gerard O’Dea, Robert Bruce Pease
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