TMAC Resources Inc. (TSX: TMR) (“TMAC” or the
“Company”) provides its fourth quarter operations
update and production results. In the fourth quarter 2017 TMAC sold
17,350 ounces of gold, realizing $28.1 million (US$22.1 million) at
an average realized gold price of US$1,275 per ounce.
Terry MacGibbon, Executive Chairman of TMAC, stated, “TMAC
continues to systematically work through the Doris plant to improve
plant operations towards design throughput and recovery levels. All
of the hard work and dedication over the past many months, by all
the plant workers, has resulted in significant improvements, with
the recovery for November and December at an average of 76% and
throughput in December averaging 84% of design. Two of the three
key improvement areas identified during last summer’s plant work
shop, a dewatering cone to reduce excess water in the concentrate
treatment plant and new resin beads in the resin columns, were
addressed during the fourth quarter. The third key
improvement area, a new cyclone distributor head, has been
fabricated and will be installed shortly.”
Mr. MacGibbon added, “At the Doris mine, underground development
continues with the ramp to Doris Connector, our next mining area,
well underway, and with the ramp continuing to the Doris BTD zone
for future stope access and diamond drill platforms. Ore grade,
dilution and mining conditions continued to be as expected with
production mining being regulated to coincide with plant throughput
capacity.”
He added, “The Hope Bay property continues to be permitted in a
timely and efficient manner. Permits are in hand to conduct mining
at Doris and surface exploration over the entire 80 km by 20 km
Hope Bay property. Both the Madrid and Boston deposits have
advanced exploration permits which allow underground exploration
and bulk sampling. The final environmental impact studies for
production at Madrid and Boston were submitted in late 2017 and we
are awaiting the results of the conformity review by the Nunavut
Impact Review Board and the Nunavut Water Board. The above
advancements position TMAC to ramp up to full mine and plant
production and continue exploration efforts.”
2017 AND FOURTH QUARTER PRODUCTION HIGHLIGHTS
- Mined 53,500 tonnes of ore at a grade
of 9.4 grams per tonne (“g/t”), containing 16,200 ounces of
gold in the fourth quarter of 2017, resulting in a total of 150,700
tonnes of ore mined at a grade of 11.5 g/t, containing 55,700
ounces of gold for the year.
- Processed 69,600 tonnes of ore at a
grade of 13.7 g/t, containing 30,700 ounces of gold in the fourth
quarter of 2017, with 22,220 ounces of gold being produced at an
average recovery of 72%. After the installation of the dewatering
cone in early November 2017, the recovery for November and December
improved to an average of 76%, while the average for the year was
67%.
- Produced 56,630 ounces of gold in 2017,
of which approximately 7,600 ounces remain as gold in circuit at
December 31, 2017.
- The processing plant (the
“Plant”) achieved 84% of design throughput in December.
- Sold 17,350 ounces of gold in the
fourth quarter of 2017 generating $28.1 million (US$22.1 million)
of revenue.
- Poured 49,040 ounces of gold, of which
46,990 ounces were sold generating $76.8 million (US$59.7 million)
of revenue for the year (including sales of gold pre-commercial
production) and 2,050 ounces were doré or refined.
- Realized an average price of US$1,275
per ounce of gold in the fourth quarter of 2017 ($1,622 per ounce
at an exchange rate of 1.27) and US$1,270 per ounce for the year
($1,635 per ounce at an exchange rate of 1.30).
- Ore stockpiles at December 31, 2017
were estimated to contain 66,600 tonnes of ore at an average grade
of 13.8 g/t, or 29,400 ounces of contained gold.
- Cash balances at December 31, 2017 were
$42 million of unrestricted cash, including the $10 million minimum
cash balance required under the terms of TMAC’s Debt Facility, and
$44 million of restricted cash.
Table 1: Summary of production
highlights
Description Units
Nine months ended
September 30, 2017(1)
Three months ended
December 31, 2017
Year endedDecember 31,
2017(1)
Mining: Ore mined tonnes 97,200 53,500
150,700 Waste mined tonnes 197,000 66,100 263,100
Total mined tonnes 294,200 119,600 413,800 Average grade g/t 12.6
9.4 11.5 Contained ounces ounces 39,500 16,200 55,700 Development
metres 4,080 984 5,064
Processing: Ore processed
tonnes 139,300 69,600 208,900 Grade g/t 12.0 13.7 12.6 Contained
gold ounces 53,960 30,700 84,660 Recovery % 64 72 67 Gold produced
ounces 34,410 22,220 56,630 Gold sold ounces 29,640 17,350 46,990
Stockpile: Ore on surface tonnes 82,700 66,600 66,600
Average grade g/t 16.6 13.8 13.8 Contained gold ounces 44,000
29,400 29,400
USD production(1) Gold sold $US
millions 37.6 22.1 59.7 Average realized sales price $US/oz 1,267
1,275 1,270 Average spot price of gold(2) $US/oz 1,268 1,275 1,266
CAD production(1) Average exchange rate
CAD/USD 1.31 1.27 1.30 Gold sold $ millions 48.7 28.1 76.8 Average
realized sales price $/oz 1,643 1,622 1,635 Average spot price of
gold(2) $/oz 1,635 1,622 1,638
(1) Includes both pre and post-commercial production(2) London
PM fix
PROCESSING PLANT UPDATE
TMAC personnel have continued to systematically troubleshoot the
issues affecting the Plant’s operational availability and recovery,
and demonstrated improvement in the fourth quarter. Throughput of
the concentrator line (“CL”) was improved by focusing on
consistent operational practices and optimization of the high
pressure jig. The team achieved a milestone of 84% throughput of
design capacity in December. A traditional “spider head” cyclone
distributor has been delivered to site and is expected to be
installed in the Plant shortly. This modification is expected to
increase gold recoveries within the first CL.
In the concentrate treatment portion of the Plant (the
“CTP”), a dewatering cone to keep excess water from the CL
side of the Plant out of the CTP was installed in early November
and significantly improved the water balance. Concentrate grinding
and leaching optimization is now the focus of the team with an
expectation of further improving gold recovery. Also in November,
new resin was delivered to the site and a second resin column was
activated for gold adsorption. With the second resin column in
operation, as well as more frequent “stripping” of the two resin
columns, gold solution recovery is performing better. The fouling
of resin continues to be an important issue that needs to be
managed through good operational practices; however, it is
currently being mitigated. Research continues on arriving at a
longer-term solution for the fouling, including warm acid washes,
as well as research and testing of other resin products with better
anti-fouling properties.
It is expected that the modifications to cyclone design, in
combination with a focus on grinding and leaching optimization,
will result in an improvement in total recoveries later in the
first quarter of 2018. Overall recoveries are the product of
recoveries from the CL and CTP sections of the Plant.
2018 OBJECTIVES
Doris operations and capital expenditure:
- Ore production will mainly come from
the fully developed Doris North zone and the developed stopes in
the Doris BTD zone. Ore production will be supplemented with ore
from sill development in the Doris Connector and other areas of the
Doris BTD zone. The mine plan is designed to provide all the ore to
be processed while maintaining the stockpile balance.
- Mine between 420,000 and 470,000 tonnes
of ore at between 11 and 14 g/t gold with total tonnes, including
waste, being between 670,000 to 740,000 tonnes
- Underground development will continue
in the BTD zone and in Doris Connector and will include a decline
towards the Doris Central zone to support 2019 and 2020 production
from Doris at an estimated total cost of $23 million for 2018.
- Continue the ramp up of the Plant to
design capacity. Install, commission and commence ramp up of the
second CL, increasing the overall throughput capacity to the design
of 2,000 tonnes per day. Improvements made to the first CL will be
incorporated into the second CL as part of the installation and
commissioning thereof.
- Unit costs of production in 2018 are
sensitive to throughput and recovery rates. Costs in the first
quarter of 2018 are expected to be in line with the costs incurred
in 2017, with unit costs reducing as throughput and recoveries are
improved. Once the commissioning of the second CL is completed, the
increased throughput is expected to decrease the unit costs by the
end of the year. Maintenance costs are expected to decrease from
the high levels experienced in 2017 as improvements in the Plant
are implemented.
- Expansion capital expenditures required
to expand the processing capacity of the Plant to 2,000 tonnes per
day are estimated to total $4 million during 2018.
- Sustaining capital expenditures,
excluding underground development, to construct and acquire
additional Doris surface infrastructure, including construction of
the south dam in the tailings impoundment area and an ocean
discharge pipeline, and equipment and to continue the ramp up of
the Plant to its design capacity are estimated to total $24 million
for 2018.
Exploration:
- Conduct 22,000 metres of underground
definition diamond drilling on the BTD Extension zone and the Doris
Connector zone to support stope design and a resource update to
facilitate conversion to reserve.
- 6,500 metres of surface diamond
drilling are planned to refine the geological understanding of the
Madrid North Naartok deposit to support the advanced exploration
and bulk-sampling program.
- Regional exploration will include
diamond drilling, sonic drilling and gold in glacial till sampling.
A total of 4,000 metres of diamond drilling is planned.
Environment and permitting:
- Obtain a project certificate for Madrid
and Boston once the review of the environmental impact statement
submitted in December 2017 is complete. The Nunavut Impact Review
Board recommends project certificates for approval by the Minister
of Crown-Indigenous Relations Northern Affairs.
Madrid and Boston:
Management continues to pursue the opportunity to replace the
cash collateralized letters of credit issued for environmental
rehabilitation security with surety bonds. Surety bonds could
release approximately $25 million of cash currently deposited as
collateral for letters of credit as well as additional
environmental reclamation security that is expected to be placed
with various entities during 2018. If surety bonds are obtained,
the additional cash would allow for the initial investment in
Madrid that includes the acquisition of equipment, the initiation
of surface infrastructure and the commencement of underground
development required in 2018 to extract a bulk sample in 2019.
CONFERENCE ATTENDANCE
January 17 – 18, 2018
Terry MacGibbon, Executive Chairman, will present on Wednesday,
January 17, 2018 at 10:00 am ET at the TD Securities’ 2018 Mining
Conference to be held in Toronto, ON, Canada on January 17 - 18,
2018.
ABOUT TMAC RESOURCES
TMAC holds a 100% interest in Hope Bay located in the Kitikmeot
region of Nunavut, Canada. TMAC is an emerging gold producer with
the Doris mine pouring first gold in the first quarter of 2017 and
achieving commercial production in the second quarter of 2017. The
Madrid and Boston properties are expected to commence production in
2020 and 2022, respectively. The Company has an experienced, expert
board of directors combined with exploration, development and
operating teams with extensive track records of discovering,
developing and operating high grade, profitable underground mines.
TMAC’s shares trade on the Toronto Stock
Exchange under the trading symbol TMR.
SCIENTIFIC AND TECHNICAL INFORMATION
Scientific and technical information contained in this document
was reviewed and approved by Gil Lawson, P.Eng., Chief Operating
Officer of TMAC, a “Qualified Person” as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
FORWARD-LOOKING INFORMATION
This release contains "forward-looking information” within the
meaning of applicable securities laws that is intended to be
covered by the safe harbours created by those laws.
“Forward-looking information” includes statements that use
forward-looking terminology such as “may”, “will”, “expect”,
“anticipate”, “believe”, “continue”, “potential” or the negative
thereof or other variations thereof or comparable terminology. Such
forward-looking information includes, without limitation, bringing
the timing for bringing Madrid and Boston into production and the
rate of ramp up at Doris throughout 2018.
Forward-looking information is not a guarantee of future
performance and management bases forward-looking statements on a
number of estimates and assumptions at the date the statements are
made. Furthermore, such forward-looking information involves a
variety of known and unknown risks, uncertainties and other
factors, which may cause the actual plans, intentions, activities,
results, performance or achievements of the Company to be
materially different from any plans, intentions, activities,
results, performance or achievements expressed or implied by such
forward-looking information. See “Risk Factors” in the Company’s
Annual Information Form, dated February 23, 2017, filed on SEDAR at
www.sedar.com for a discussion of these risks.
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version on businesswire.com: http://www.businesswire.com/news/home/20180116005707/en/
TMAC Resources Inc.Terry MacGibbon, 416-628-0216Executive
ChairmanorAnn Wilkinson, 416-628-0216Vice President, Investor
Relationswww.tmacresources.comorRenmark Financial Communications
Inc.Daniel Gordon, 416-644-2020 or
514-939-3989dgordon@renmarkfinancial.comwww.renmarkfinancial.com