Premier Gold Mines Ltd. [PG-TSX] released the updated results of its preliminary economic assessment (PEA) on the Cove project at its 100%-owned McCoy-Cove property located near Battle Mountain, Nevada. All figures in U.S. dollars.
Highlights of the updated PEA results and life-of-mine plan (LOM) include:
After-tax NPV5 (net present value at a 5% discount) is $178.0-million, and an after-tax internal rate of return (IRR) of 36% based on a gold price of $1,400/ounce – increasing to NPV5 of $306-million and IRR of 53% at a gold price of $1,680/oz. Average operating costs are $215/ton, cash cost of $859/oz gold and all-in sustaining cost (AISC) of $948/oz gold.
Indicated mineral resources stand at 1.11 million tons at 0.316 oz/ton gold and 0.850 oz/ton silver for 351,000 oz of gold and 943,000 oz of silver (1,007,000 tonnes at 10.8 g/t gold and 29.1 g/t silver);
Inferred mineral resources of 4,262,000 tons are 0.317 oz/ton gold and 0.602 oz/ton silver for 1,353 koz of gold and 2,565 koz of silver (3,866,000 tonnes at 10.9 g/t gold and 20.6 g/t silver);
Metallurgical recoveries are 82.5% for gold and 67.1% for silver. Gold production would be 743,000 ounces during eight-year life-of-mine (LOM). Average annual full-year gold production is 102,000 ounces. LOM capital cost is $107.2 million after predevelopment costs of $23.9-million. Mine construction capital would be $81.9-million with an after-tax payback period of 4.5 years.
“The PEA underscores the importance of McCoy-Cove as one of the cornerstone assets in our soon-to-be spunout i-80 Gold Corp, whose focus will remain the exploration and development of quality gold projects in Nevada, USA,” stated Ewan Downie, President and CEO of Premier Gold Mines. “Our go-forward plans for the project include an exploration ramp to allow an aggressive underground drill program to upgrade and expand mineral resources in advance of a future feasibility study and also provide a platform to increase recoverable gold resources and delineate the deposit still open down plunge.”
The focus for 2021 and 2022 includes laboratory and economic evaluations of alternative processing methods, optimizing the mine plan with the hydrological model, completion of baseline studies needed to kick off an EIS, and beginning development of an exploration decline to support underground diamond drilling to upgrade and increase mineral resources. Completion of these activities and a feasibility study will occur in 2023/2024.