LGD: CA |
LGDTF: US |
contactBanner

A PEA at Goldstrike was published on July 10, 2018 providing a strong, base-case economic scenario upon which to expand the scope and scale of the project with ongoing drilling.  The PEA confirms the potential for a modest capital intensity, low operating cost, open-pit, run-of-mine, heap-leach operation, with a 7.5-year mine life and highly attractive economics.

The PEA is preliminary in nature and includes inferred mineral resources that are too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that PEA results will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Important project metrics are presented in the following tables:

Assumptions  
Gold Price $1,300/oz
Production Profile  
Total Tonnes of Mineralized Material Mined and Processed 59.3 million tonnes
Total Tonnes Waste Mined 70.6 million tonnes
Head Grade 0.48 grams per tonne (“g/t”)
Mine Life 7.5 years
Tonnes per Day Mineralized Material Mined 22,500 tonnes per day
Strip Ratio (Waste: Mineralized Material) 1.2:1
Average Gold Recovery 78%
Total Gold Ounces Mined 915,516 troy ounces (“oz”)
Total Gold Ounces Recovered 713,000 oz
Average Annual Gold Production 95,000 oz
Peak Annual Gold Production 117,855 oz
Unit Operating Costs  
Life of Mine (“LOM”) Average Cash Cost1 $642/oz
LOM Average Adjusted Cash Cost2 $675/oz
LOM Cash Cost plus All-in Sustaining Cost (“AISC”)3 $793/oz
Project Economics  
Royalties (estimate; royalties differ slightly by location and gold price) 2.50%
Pre-tax NPV5% / After-Tax NPV5% $176.2 million/$129.5 million
Pre-tax IRR/ After-Tax IRR 34.8%/29.4%
Undiscounted Operating Pre-Tax Cash Flow/After-Tax Cash Flow $259.3 million/$195.5 million
After-Tax Payback Period 2.3 years

1Includes mining cost, mine-level G&A, leaching and refining cost; 2Includes the above plus royalties; 3Includes the above plus sustaining and closure costs.

Capital Requirements Initial LOM
Mining Capital $23.50 million $61.30 million
Total Infrastructure Capital $31.40 million $35.10 million
Total Processing Capital $48.30 million $68.40 million
Closure Costs - $20.00 million
Owners Costs $10.00 million $10.00 million
Total Capital Costs $113.20 million $194.80 million

The PEA Study utilizes open pit mining with mine planning based on economic pit shells generated by mine planning software.  Mine production is planned at 22,500 tonnes per day or 8.2 million tonnes per year of leach feed (mineralized) material.  With an average waste to leach feed material strip ratio of 1.2 to 1, the average mining rate is approximately 50,000 tonnes per day of leach feed and waste material.  The open pit mining at Goldstrike was designed utilizing an owner-operated, conventional mine fleet of front-end loaders and trucks.

The PEA examines the effect on NPV5% of up to a 40% increase or decrease in capital and operating expenditures. NPV5% is strongly influenced by the price of gold.  The following tables show the effect of gold price on the IRR and NPV. The base case is shaded grey.

Post-tax IRR in % Gold Price/oz
 $900  $1,100  $1,300  $1,500  $1,700
Operating Cost -40.0% 19.5% 32.9% 44.5% 55.2% 64.9%
-20.0% 9.2% 24.6% 37.3% 48.5% 58.9%
0.0% -3.7% 15.2% 29.4% 41.5% 52.4%
20.0% N/A 3.8% 20.7% 34.0% 45.6%
40.0% N/A -13.3% 10.5% 25.8% 38.3%

 

Base Case NPV5% of $129.5M Gold Price/oz
 $900  $1,100  $1,300  $1,500  $1,700
Capital Costs -40.0% $21.4 $102.6 $183.7 $264.7 $344.8
-20.0% ($6.5) $75.5 $156.6 $237.7 $318.7
0.0% ($35.2) $48.1 $129.5 $210.6 $291.7
20.0% ($67.7) $20.4 $102.3 $183.5 $264.6
40.0% ($101.4) ($7.8) $74.8 $156.4 $237.5