The FS confirms robust economics for a conventional open pit mining and milling operation at Valentine, with low initial capital cost and high rate of return. The FS presents a mine plan based on the same two-pit and centralized mill strategy first presented in the April 2020 Pre-Feasibility Study, with updated Mineral Resource and Mineral Reserve estimates, refined mine and mill designs supported by additional geotechnical and metallurgical data, and updated capital and operating cost estimates. Mineral Resources, Mineral Reserves, and the Project’s financial analysis have been completed at base case assumptions of US$1,500/troy oz gold and a C$:US$ exchange of $0.75.
Highlights of the FS are as follows (all figures are in Canadian dollars and troy ounces unless otherwise noted)
After-tax Internal Rate of Return (IRR) is 31.5% and Net Present Value at a 5% discount rate is $600M (US$450M) at US$1,500/oz gold, increasing to 42.2% and $868M (US$651M) at US$1,750/oz gold.
Initial Capex is $305M (US$229M) yielding a favourable after-tax NPV5%/Capex ratio of 2.0. Total life-of-mine (LOM) capital is $662M (US$496M). After-tax payback would be 1.9 years.
Mine life is 13 years with 22 months construction and commissioning assuming construction start in January 2022. First gold pour would be October 2023.
Average gold production is 173,000 oz/year and $119M of annual average free cash flow (FCF) between 2024 and 2033 from the processing of high-grade mill feed, and 56,000 oz/year and $31M FCF/year between 2034 and 2036 from the processing of low-grade stockpile.
LOM Total Cash Costs are US$704/oz and All-In Sustaining Costs (AISC) of US$833/oz.
Mill capacity is 6,800 tpd (2.5 Mtpa) based on gravity-leaching, expanding to 11,000 tpd (4.0 Mtpa) in Year 4 based on gravity-flotation-leaching. LOM average gold recovery of 94.2% for total LOM recovered gold production of 1.93 Moz.
Proven and Probable Mineral Reserves are 2.05 Moz (47.06 Mt at 1.36 g/t gold), an increase of 0.18Moz, or 10%, compared to the previous estimate in April 202.
Measured & Indicated Resources are 3.14 Moz (56.66 Mt at 1.72 g/t gold), an increase of 0.05 Moz, or 1%, compared to the previous estimate from January 2020. Mineral Resources are inclusive of the Mineral Reserves.
Inferred Resources are 1.00 Moz (18.25 Mt at 1.70 g/t Au), an increase of 0.04 Moz, or 4%, compared to the previous estimate.