Canarc Resource Corp. [CCM-TSX; CRCUF-OTC-QB; CAN-FSE] announces that an update of the gold price and exchange rate within the range of sensitivities in the 2019 preliminary economic assessment (PEA) of the high-grade New Polaris gold mine project in northwestern British Columbia significantly improves the anticipated economics of the project.
The 2019 PEA used a base case gold price of US$1,300/oz and a CDN$:US$ exchange rate of 0.77 to generate an after-tax Net Present Value (NPV) of US$216 million and an after-tax Internal Rate of Return (IRR) of 38%. At a US$1,500/oz gold price and a 0.71CAD$:US$ exchange rate, the forecasted economics significantly improve to a US$333 million after-tax NPV and a 56% after-tax IRR.
Other benefits of the lower exchange rate include reductions of the cash operating cost from US$433/oz gold to US$400/oz gold, and of the payback period from 2.7 years to 1.9 years. All parameters and conditions of the NI 43-101 PEA by Moose Mountain Technical Services dated February 28, 2019 PEA remain unchanged.
Scott Eldridge, Canarc’s CEO, stated: “These updated economic assumptions clearly demonstrate the potential for our New Polaris gold mine project to become a high-margin, low-cost gold mine. The 2019 PEA incorporated flotation, bio-oxidation and CIL plant circuits to produce doré gold bars, a game-changer that offers substantial operational and financial advantages over prior plans to ship flotation concentrates by barge and truck to offshore facilities for final processing.”
• Post-tax project payback improves to 1.9 years from 2.7 years.
• The PEA is based on mine production of 2.3 million tonnes grading 10.3 g/t gold over an 8.7-year mine life.
• Mill throughput of 750 tonnes per day with a process recovery of 90.5% to produce a total of 693,000 oz. gold.
• Average annual life-of-mine production: 80,000 oz. gold.
Canarc is evaluating the potential to build and operate a 750 tonne-per-day gold mine at New Polaris using flotation to produce a high-grade gold sulfide concentrate, bio-oxidation to oxidize the concentrates, and leaching of the oxidized concentrates to produce 80,000 ounces of gold per year in doré bars onsite.
On a pre-tax basis, the undiscounted life-of-mine cash flow totals CAD$847 million with a 68% IRR and a 1.7 year pay-back period; compared to a undiscounted cash flow total of CAD$554 million, a 47% IRR and a 2.3 pay-back period in the PEA.
Indicatd resources are 1,686,000 tonnes grading 10.8 g/t gold. Inferred resources are 1,483,000 tonnes of 10.2 g/t gold.
The 100%-owned New Polaris gold mine project is located about 100 km south of Atlin, BC and 60 km northeast of Juneau, Alaska. There is no road access at present to the property, but year-round access is available via light aircraft from either Juneau or Atlin to a 400-metre airstrip on the property, and summer access is possible via shallow draft barge from Juneau.