Brio Gold Adds Over 500,000 Low Cost Ounces To Expected Production

 

TORONTO, ON - Brio Gold has completed a preliminary economic assessment on the C1 Underground Mineral Resource at the Santa Luz Project in Brazil. Brio Gold completed a Feasibility Study on its open pit deposit (Open Pit FS) earlier this year. Based on the results of the C1 Underground PEA, the Company plans on converting the C1 Underground Mineral Resources into Mineral Reserves by way of a Pre-Feasibility Study (PFS). The Company is also studying a combined underground and open pit mine plan for the PFS at the existing throughput rate that should improve the stripping profile and overall cashflow profile of the Santa Luz Project. The Company will also evaluate a potential mill expansion case. Work on the PFS has commenced, and the Company expects to complete the study in the first half of 2018. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. All dollar figures are in U.S. dollars, unless otherwise indicated.

"The PEA demonstrates the significant positive impact that adding higher grade mill feed from the underground could have on the open pit plan," commented Gil Clausen, Brio Gold's President and CEO. "The C1 Underground is expected to add significant value to the Santa Luz Project, making our flagship asset both bigger and better. Underground development investment is planned to start after the establishment of steady gold production from the open pit, which means we should be able to self- fund its development. In fact, it can be started at any time as underground development is not expected to interfere with the open pit operations at all. Santa Luz will provide significant growth to Brio Gold's production profile, and will undoubtedly be our flagship mine."

The C1 Underground operation is expected to add approximately 511,000 ounces of recovered gold to the total life of mine production and extend the mine life by three years. This represents 50% more production compared to the open pit only mine plan, which is based on Mineral Reserves. Start up of underground stoping production is proposed for 2021, with pre-operational development planned to be funded from operating cashflow.

The Underground PEA envisions a mechanized long-hole stoping mining operation, using cemented paste backfill at an average mining rate of 2,500 tonnes per day (tpd). Start-up of production for the underground is planned for 2021. Plant capacity remains unchanged from the Open Pit FS at 2.7 million tonnes per annum or approximately 7,500 tpd. It is anticipated that when the underground operation commences production, nominal tonnage will be 5,000 tpd from the open pit and 2,500 tpd from the underground. The C1 Underground mineralization is the down dip extension of the open pit deposit, therefore the processing flowsheet and recoveries are expected to be the same as the Open Pit FS. Average overall gold recoveries for both the open pit and underground are expected to be 84%. The Company will conduct further metallurgical test work to confirm the assumption on C1 Underground gold recoveries, and the results will be included in the upcoming C1 Underground PFS.