Desert Gold delivers positive PEA for SMSZ Project for Barani and Gourbassi Deposits, Mali

Desert Gold Ventures Inc. [TSXV: DAU; FSE: QXR2; OTCQB: DAUGF] reported results of its maiden Preliminary Economic Assessment (PEA) for the Barani and Gourbassi deposits, located on its 100%-owned SMSZ Gold Project in western Mali, West Africa.

The PEA outlines a low-capex, open-pit oxide mining operation, with projected production of approximately 18,300 tonnes per month (or 220,000 tonnes per annum at steady state) over a mine life exceeding 17 years. The study was completed by Minxcon, with technical work and cost estimation exceeding the minimum standards typically required for a PEA and completed to a confidence level of ┬▒25% accuracy.

The PEA mine plan includes a total of 113,500 ounces of gold contained, with an estimated 97,600 ounces expected to be recovered through a simple, gravity and CIL processing flowsheet, based on an average metallurgical recovery of 86%. At a spot gold price of USD $2,500/oz, the project generates an after-tax Net Present Value (NPV) at a 10% discount rate of US$24 million, an Internal Rate of Return (IRR) of 34%, and a projected payback period of 3.25 years.

At the current spot gold price of US$3,366/oz, the project generates an after-tax Net Present Value (NPV) at a 10% discount rate of USD $54 million, an Internal Rate of Return (IRR) of 64%, and a projected payback period of 2.5 years.

The mining plan is designed to be broken out into two phases, starting with open-pit operations at Barani East before transitioning to the Gourbassi deposits. A modular gravity and CIL processing plant will be commissioned at Barani for the first phase of production and later moved to Gourbassi as operations shift. This staged approach helps keep initial capital costs low, avoids duplicating infrastructure, and allows the Company to unlock value from multiple oxide gold zones across the SMSZ Project in a flexible and cost-effective manner.

PEA Highlights: After-tax NPV_10% of $24 million and after-tax IRR of 34% based on $2,500/oz gold; funding requirement of $16 million with initial capital cost of $15 million and sustaining capital of $9 million over life of mine; current mine life of over 17 years; all-in sustaining cost per oz (AISC) of US$1,352; projected average RoM production of 18.3 kt per month or 220 kt per year; projected average gold production of 460 oz per month or 5.5 koz per year; after-tax buyback of 3.25 years at base case of $2,500/oz gold; cumulative cash-flow of $71 million after-tax over 17 years on base case assumptions; total payable gold production of 97,600 ounces and average strip ratio for the combined operations is estimated at 2.47:1.

Jared Scharf, CEO, commented: “We are delighted to deliver such a strong mine plan. With less that 10% of the SMSZ Project’s gold resources incorporated into this study, there is tremendous opportunity to improve project economics and materially grow this operation over time. We have intentionally designed a mining solution that is both modular and flexible from a processing perspective giving us maximum operational optionality as we move forward. Significant emphasis will continue to be placed on exploration at the SMSZ project especially for gold zones and prospects proximal to the initial mine sites of Barani and Gourbassi. Furthermore, the Barani East Small Mine permit allows for up to 36 kilotons per month of ore processing. This means we have the ability to double production from the current PEA plan of 18 kilotons per month with. Given the numerous brownfield exploration targets within close proximity to the Barani starter pit, management believes there is a high likelihood of growing this operation materially over time.”

The SMSZ Project is expected to generate a total after-tax free cash flow of $71 million, averaging about $4.1 million per year over the 17.4-year mine life. Cash flow is generally steady across the life of the project, with a slight dip expected during the transition between mining at Barani and Gourbassi. This reflects the planned relocation and commissioning of the modular processing plant and is already accounted for in the overall schedule and financials.

The SMSZ Project demonstrates strong leverage to gold price. At the base case scenario of US$2,500/oz, the Project yields an after-tax NPV (10%) of US$24 million and an after-tax IRR of 34%. At a higher gold price of US$3,000/oz, the after-tax NPV increases to US$41 million with an IRR of 51%.

Average annual gold production over the life-of-mine is estimated at 5,500 ounces (or ~458 oz/month), with total payable gold production projected at approximately 97,600 ounces across both the Barani and Gourbassi deposits.

The initial capital cost is estimated at approximately $15 million, with sustaining capital over the life of mine projected at $9 million. Contingencies of 20% have been applied to the direct capital costs. These estimates are grounded in current pricing data, including vendor quotes from regional suppliers, and benchmarked against cost structures from comparable West African gold operations.

Initial capital is largely directed toward developing the Barani East deposit, including installation of the modular processing plant. Sustaining capital is allocated primarily to the relocation of that plant to the Gourbassi site during the second phase of mining. By utilizing a modular plant that can be redeployed rather than duplicated, Desert Gold has significantly reduced upfront capital costs. This staged approach helps control early expenditures and avoids unnecessary infrastructure overlap.

Total cash costs for the SMSZ Project are estimated at $34.80/tonne processed, or $1,324/oz of payable gold. The all-in sustaining cost (AISC) is estimated at $1,352/oz. These operating costs reflect the use of modular infrastructure, low strip ratios at Gourbassi, and owner-operated mining, which collectively contribute to lower per-tonne costs compared to regional peers.

Cost estimates were derived from vendor quotations, current fuel and labor assumptions in Mali, and benchmarking against similar oxide gold operations across West Africa.

The current Preliminary Economic Assessment (PEA) for Desert Gold’s SMSZ Project focuses exclusively on oxide and transitional mineralization within optimized open pits at the Barani East, Barani Gap, Gourbassi West, and Gourbassi West North deposits. These four zones collectively contribute approximately 113,500 ounces of gold to the mine plan (after mining modifying factors), with an average recovered grade of 0.95 g/t Au and a projected gold recovery of 86% via conventional CIL processing, equating to roughly 97,600 ounces of recoverable gold.

Importantly, the study excludes some of the smaller pits identified during the PEA which may offer additional upside in future technical work. Furthermore, the current cutoff grade for reporting the Mineral Resource Estimate (MRE) is 0.2 g/t Au.

The total Measured and Indicated (M&I) Resources now stand at 11.12 Mt grading 0.94 g/t Au for 336,800 ounces, while Inferred Resources total 27.16 Mt grading 1.01 g/t Au for 879,900 ounces. The total ounces reflect the oxide, transition and sulfide/fresh mineralization for the SMSZ Project.

The PEA only focused on the oxide and transitional material and therefore the PEA pits were optimized on the oxide and transition material. The exclusion of the sulfides, which contribute ~45% to the MRE at Barani and Gourbassi, would also result in less oxide and transitional material being include in the PEA pits. The highlighted deposits in table 4: Gourbassi West, Gourbassi West North, Barani Gap, and Barani East, contribute ~ 470koz of oxide, transitional and fresh mineralized material to the MRE. The oxide and transitional mineralized material for these four areas is ~260,000 oz Au.

Key exploration targets such as Mogoyafara South, Linnguekoto West, and the Keniegoulou area were not included in the current PEA, though they collectively host substantial Inferred Resources and represent clear upside for future expansion. In total, over 1 million ounces of gold remain outside of the current PEA pit shells (resources which are deeper, narrower, or require higher strip ratios) and could be integrated into subsequent development scenarios pending additional drilling and studies.

The SMSZ Project is located within gently undulating terrain in southwestern Mali. The regional topography, semi-arid climate, and established infrastructure are well suited to conventional open-pit mining methods, with no underground mining planned at this stage.

The current PEA targets shallow oxide and transitional material from the Barani East, Gourbassi West, and Gourbassi West North deposits. While deeper sulfide mineralization exists beneath these pits, it has not been considered in the current mine plan but may be evaluated in future technical studies.

Mining operations will consist of three independent open pits; each developed in pushback phases. Given the dominance of oxide and transition ore, significant portions of the material (especially in the upper benches) are expected to be free-digging, requiring minimal to no blasting.

The open-pit operation is designed to deliver an average of 600 tonnes/day (tpd) of mineralized material, split evenly between Barani and Gourbassi in two staged campaigns. Peak material movement across pits is expected to reach ~2,100 tpd total when accounting for waste rock.

A total of approximately 9.18 Mt of waste rock and 3.71 Mt of ore are planned to be mined over the 17.4-year mine life, yielding a life-of-mine strip ratio of 2.47:1. The mined ore has an average grade of 0.95 g/t Au, and metallurgical testing indicates a process recovery of 86%, resulting in an estimated 97,600 oz of recovered gold.

Ore will be either fed directly to the modular CIL process plant or temporarily stockpiled for blending. Waste rock will be transported to designated waste rock dumps or used in the construction of tailings embankments and haul roads as required.

Metallurgical test work conducted to date supports a conventional, low-risk processing flowsheet for the SMSZ Project. Testing has focused on near-surface oxide and transitional material from the Barani East, Gourbassi West, and Gourbassi West North deposits all of which demonstrate free-milling gold mineralization suitable for gravity recovery followed by carbon-in-leach (CIL) processing.

Preliminary bottle roll and gravity recovery tests, combined with regional analogues, indicate an average gold recovery of 86%, with localized recoveries reaching as high as 91% in Gourbassi West oxide material. Importantly, no significant refractory or preg-robbing behavior have been identified.

The proposed modular process plant will initially operate at 18,000 tonnes per month, beginning at Barani and later relocating to Gourbassi to support a staged development plan. The circuit will include scrubbing and crushing; gravity recovery (Knelson + CVD); secondary grinding of gravity tails and CIL leaching, elution, electrowinning, and smelting.

The SMSZ Project benefits from its location in a well-established mining district in southwestern Mali, approximately 15 km from Kenieba and within trucking distance of multiple world-class gold operations. The region is serviced by a network of sealed roads and well-maintained dirt roads, enabling year-round access to site and direct logistical links to Bamako and Senegal.

The current exploration camp is fully equipped to support field operations, with core logging and storage facilities, temporary accommodations and logistical staging areas already in place. During production, key site infrastructure will include:

An 18 ktpm modular gravity + CIL processing plant (initially at Barani, then moved to Gourbassi): diesel-generated power (3.0 MVA installed capacity); water supply via pit dewatering and rainfall collection; tailings storage and waste rock facilities at both pit areas; service roads, maintenance facilities, and mobile support equipment and a staffed camp and offices for operations personnel.

The site’s gently rolling topography, soft oxide-hosted mineralization, and access to local labour pools further enhance the project’s suitability for rapid, low-cost development.

Tailings and water management for the SMSZ Project have been designed with a focus on low-impact, phased construction, and the use of conventional slurry deposition techniques. Each mining center (i.e. Barani and Gourbassi) will be supported by its own tailings storage facility (TSF), with sizing and layout tailored to the production profile and terrain of each site.

The company is in advanced discussions with potential partners to secure funding to begin construction at Barani East as soon as possible. The company is evaluating a number of funding options and hopes to provide the market with material guidance on this subject in the near future.

At the Barani Small Mine Permit and Gourbassi West/West North deposits new drill programs are being designed to test for extensions along strong strike and to depth of known gold zones with the aim of expanding exiting gold zones and incorporating new gold zones into the mine plan.

Desert Gold Ventures controls properties in both Mali and Cote d’Ivoire. This includes the 440km² SMSZ Project in Western Mali as well as the newly optioned 297 km² land package in western Cote d’Ivoire within the prolific Birimian greenstone belt.