Preliminary Economic Assessment of CUMO Project

 

VANCOUVER, BC - Mosquito Consolidated Gold Mines Limited reported that it has received an extremely positive NI 43-101 compliant Preliminary Economic Assessment ("PEA") of its Idaho-based CUMO molybdenum-copper-silver project. The PEA was managed by Ausenco Minerals Canada Inc. Based on a pre-tax financial model (earnings before interest, tax, depreciation and amortization) and using a long-term, base-metal price scenario, Ausenco's study showed the CUMO project having a Net Present Value (NPV) of US$16 Billion for a 150,000 short tons per day ore production rate and US$10 Billion for a 100,000 short tons per day ore production rate. Corresponding Internal Rates of Return (IRR) were 36% and 29% respectively - significantly above the minimum 12.5% to 15% IRR typically required for United States-based projects to be considered for production - and straight-line payback periods for startup capital costs were 2.3 and 3.0 years respectively. These very substantial figures indicate that Mosquito should be developing CUMO toward an initial ore production rate of between 100,000 and 150,000 short tons per day.

Ausenco's PEA of CUMO outlined several options for the further development of the project under four different production rates: Ore production rates of 50,000, 100,000, 150,000 and 200,000 short tons per day were considered for the data analysis. All associated costs were also tabulated corresponding to these production rates, including: preliminary pit designs, scoping-level tailings, storage facilities and waste rock sites, power and water requirements, mine scheduling, mine plant, capital and operating costs.

"Ausenco's assessment of CUMO provides independent confirmation of the staggering economic potential of this project," said Mosquito President Brian McClay. "Our well-researched belief is that CUMO can be designed in an environmentally-friendly manner while providing thousands of high paying jobs and taxes to one of the poorest counties in Idaho. Based on this report, we will continue to significantly further develop the project.