Update On Status Of Montagne d'Or Gold Project

VANCOUVER - Orea Mining Corp. reported on the status of its Montagne d'Or gold mine development project, located in French Guiana, France. Highlights: The Montagne d'Or joint venture aims to complete final studies and mining and environmental permit applications before the end of the year; A government decision on the mining concessions renewal applications is pending as well as a decision in the Administrative Court. In the meantime, the Montagne d'Or joint venture continues to benefit from the right to operate the project; and Current political and socio-economic situation.

In 2017, the Montagne d'Or joint-venture (Orea and Nord Gold SE (Nordgold) approved proceeding with construction of the Montagne d'Or gold mine, subject to the satisfaction of a number of regulatory requirements, including completion of a public consultation process and obtaining all the necessary permits and authorizations from the French authorities. The public consultation process was organized by the French National Commission of Public Debate and included 13 meetings held in various locations around French Guiana. It was concluded in July, 2018, and the JV committed to a number of project modifications in order to move forward with the development of the Montagne d'Or gold mine. In 2018, the JV and Orea also became signatories to the International Cyanide Management Code, a voluntary industry program.

Additional engineering and environmental studies launched in early 2019 principally addressed mine design, access road layout, hybrid on-site power generation and quarry development for construction material. They also include additional fauna and flora inventories, geotechnical drilling, ground geophysical surveys, geochemical analysis and laboratory test work. These studies involved a number of international and French (including local) consulting firms. The principal components of the studies include: Tailings storage facility redesign, lowering the height of retainment dams and dam break study; On-site hybrid solar power generation, eliminating the environmental impacts of connecting the mine to the local power grid, which involved the construction of a 106-km aerial power line, reducing the overall carbon emissions of the project by 80%; Waste management plan and waste rock storage redesign to avoid acid drainage; Hydrogeological modeling, detailed water management, water balance and contact water pond design; Quarry development for construction material and multi-criterion comparative analysis of the studied quarry site alternatives; Detailed redesign of the 125 km access road from Saint-Laurent du Maroni, stormwater and safety devices, bridges, watercourse crossings, retaining walls and rehabilitation of abandoned sections; Hazardous material transport study and supply, transport and storage of explosives; Overall project mass balance and site closure plan; and Natural Compensation Site development.

The remaining studies are aimed to be completed by the end of October. Certain studies have been delayed due to the Covid-19 pandemic.

The JV's title to the Montagne d'Or gold project was initially held in eight mining concessions plus two exclusive exploration permits covering a total area of 190 km2. Historically, the Concessions were granted to the original applicant and all subsequent title holders in perpetuity, in accordance with a French Imperial Law of the year 1810. As such, when the Concessions were first granted, they had the benefit of never expiring.

In 1994, the French Mining Code was amended to provide that all mining concessions granted under the Imperial Law of 1810 would expire on December 31, 2018, including the JV's Concessions, but can be subject to successive extensions not exceeding 25 years. In accordance therewith, and after extensive exploration work, the JV submitted renewal applications for a 25-year period for the core project Concessions (two of the eight Concessions), two years prior to the expiration date. Exploration results did not justify renewal applications for the other six Concessions. The exclusive exploration permits, covering the east and west extensions of the Montagne d'Or gold deposit, were granted in July 2016 for an initial 5-year period and all conditions have been satisfied to submit renewal applications for an additional 5-year period.

Renewal of the two JV Concessions involved a national public enquiry, which was carried out in November and December 2018. The Commission of Mines in French Guiana was expected to provide a non-binding opinion to the French Minister of Economy in charge of mines, which makes a renewal decision. The renewal of the Concessions was on the agenda of the Commission of Mines on October 16, 2019, but was removed from the agenda prior to the Commission's meeting and the Prefect of French Guiana indicated that it would be considered at a future meeting following some complementary legal analysis.

The Mining Code provides that there is an implicit (deemed) refusal of the renewal applications if no response is received by the Minister in charge of mines within two years of the date the applications were submitted. On December 21, 2018, the Minister informed the JV, and all other holders of former historical concessions in French Guiana, that the assessment of their application might not be finalized upon the deadline and notified each applicant that exceeding this deadline will not preclude an explicit (formal) decision at a later date. The letter stated further that the French Supreme Administrative Court (Conseil d'État) had provided that the operator "may continue its works until an explicit (formal) decision of its request for renewal." Conditions for renewal include the requirement that the concessions be exploited on December 31, 2018, and the examination by the administrative authority of the technical and financial capacities of the title holder as well as the foreseeable duration of the exploitation of the deposit.

In French Guiana, there are currently 16 expired historical mining concessions held by four separate mining companies up for renewal, including the JV's Concessions. At the date of this news release, to the knowledge of management, no decision has been rendered by the Minister in charge of mines on any of them.

In order to protect its rights to the Montagne d'Or Concessions, in February and March 2019, the JV filed proceedings in the Administrative Court of Cayenne in French Guiana to invalidate any implicit (deemed) refusal as a result of the French government having failed to respond within the prescribed deadline, and to expedite a clear and definitive formal written decision from the Minister in charge of mines. The Administrative Court declared in January 2020, that it had received sufficient submissions from all the parties (the JV, the Minister of Economy and an NGO) and the decision of the Administrative Court is pending.