Updated PEA For The McCoy-Cove Property
THUNDER BAY, ON - Premier Gold Mines Limited reported the updated results of its Preliminary Economic Assessment (PEA) on the Cove Project at its 100%-owned McCoy-Cove Property located near Battle Mountain, Nevada. Highlights of the updated PEA results and life-of-mine plan ("LOM") include: After-tax NPV5 of $178.0 million, and an after-tax internal rate of return (IRR) of 36% based on a gold price of US$1,400/oz – increasing to NPV5 of $306 million and IRR of 53% at a gold price of US$1,680/oz; Average operating costs of $215/ton, cash cost of $859/oz Au and all-in sustaining cost (AISC) of $948/oz Au; Indicated mineral resources of 1,110 ktons at 0.316 oz/t Au and 0.850 oz/t Ag for 351,000 ozs of gold and 943,000 ozs of silver (1,007 ktonnes at 10.8 g/t Au, 29.1 g/t Ag); Inferred mineral resources of 4,262 ktons at 0.317 oz/t Au and 0.602 oz/t Ag for 1,353 koz of gold and 2,565 koz of silver (3,866 ktonnes at 10.9 g/t Au, 20.6 g/t Ag); Metallurgical recoveries of 82.5% for gold and 67.1% for silver; Gold production of 743,000 ounces during 8-year life of mine (LOM); Average annual full year gold production of 102,000 ounces; LOM capital cost of $107.2 million after pre-development costs of $23.9 million; Mine construction capital of $81.9 million; and After-tax payback period of 4.5 years.
"The PEA underscores the importance of McCoy-Cove as one of the cornerstone assets in our soon-to-be spun-out i–80 Gold Corp, whose focus will remain the exploration and development of quality gold projects in Nevada", said, Ewan Downie, President and CEO. "Our go-forward plans for the project includes an exploration ramp to allow an aggressive underground drill program to upgrade and expand mineral resources in advance of a future Feasibility Study and also provide a platform to increase recoverable gold resources and delineate the deposit still open down-plunge".
The Project will process 2.97 million tons at an average grade of 0.303 oz/t Au producing 743,000 ounces of gold over an 8-year period. The cost profile includes an average cash cost (net of by-product credits) of $859 per ounce of gold sold and an AISC of $948 (net of by-product credits) per ounce of gold sold. Annual full year gold production will average 102,000 ounces per year over the 8-year mine life. The PEA assumes mining of mineral resources in the Helen and Gap deposits only. Potential exists to increase mineral resources as the deposits remain open for expansion. New mineral resources may also be found along the Cove South Deep and 2201 zones and this potential will be reviewed following underground exploration and delineation drilling. Project after-tax NPV5 is estimated to be $178.0 million at a gold price of US$1,400/oz with a 4.5-year payback from a positive construction decision and an after-tax IRR of 36%.
Total undiscounted after-tax cash flow over the life of the Project is estimated to be $230 million. Some $23.9 million in pre-development costs have been excluded from NPV and IRR calculations within the PEA. These pre-development costs relate to advanced exploration, resource conversion, baseline studies and permitting activities to be completed prior to the commencement of mine construction and are considered sunk costs.
The PEA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the results of the PEA will be realized.