New Preliminary Economic Assessment Sleeper Gold Project

 

WINNEMUCCA, NV - Paramount Gold Nevada Corp. reported that a new Preliminary Economic Assessment (PEA) on its 100% owned Sleeper Gold Project has been completed by Metal Mining Consultants (MMC) of Denver, Colorado. The report confirms that the Sleeper Gold Project has the potential to be an attractive economic opportunity at current metal prices.

The report incorporates a global mineralized material estimate completed by SRK Consulting earlier this year, the results of new metallurgical tests completed over the last two years, and updated gold ($1250) and silver ($16) pricing that reflects current pricing and SEC standards.

In their analysis, MMC evaluated several mining rate and processing alternatives for the large mineralized material inventory consisting of oxide, mixed and sulphide ore. Detailed work was then completed on two distinct development scenarios: MMC concluded that the open pit/heap leach only scenario is the more attractive in the current economic environment and made this development option the Base Case.

The highlights of the Base Case scenario are as follows: The alternative to the Base Case, a combined heap leach and bio-oxidation scenario, was also evaluated to test its economic viability and to guide future metallurgical testing and trade-off analysis during pre-feasibility. This opportunity would result in a 14 year operation incorporating a much larger pit supplying 50,000 tonnes per day to a standard heap leach processing operation for 11 years. A 10,000 tonnes per day bio-oxidation plant would commence operation in year 9 followed by standard heap leaching of this mineralized material. Total LOM production would be 1.7 million ounces of gold and 3.2 million ounces of silver. Total capital and sustaining costs over the LOM would increase to $373 million with a cash operating cost of $758 per gold equivalent ounce. At a 5% discount rate, this scenario would result in a pre-tax NPV of $309 million and an IRR of 25.5%.

Commenting on the results of the PEA, Paramount President and CEO Glen Van Treek said that "We are very pleased with the depth of the analysis conducted by MMC. the base case scenario achieves the three main economic drivers required of new mines in the current environment -- low initial capital costs, low cash operating costs and rapid payback of capital. This scenario makes use of standard, proven technologies with very low technical risk. The positive economic analysis for the alternative larger pit scenario provides us with a very attractive potential expansion opportunity and sets out for us the further testing required to reduce the risks of heap bio-oxidation and possibly further evaluate within prefeasibility."