Increases P+P reserves 27%, M+I resources 148%
and Inferred resources 917%
ALL AMOUNTS DISCUSSED ARE DENOMINATED IN
U.S. DOLLARS
THUNDER BAY, ON, Jan. 19, 2021 /CNW/ - Premier Gold Mines
Limited ("Premier", the "Company") (TSX: PG) (OTCPK:
PIRGF) is pleased to announce the results of a
Preliminary Feasibility Study ("PFS" "Report"), with an effective
date of December 1, 2020, for the South Arturo Project (the
"Project") located in the heart of the Carlin Trend in
Nevada. South Arturo is operated
by the Company's joint venture partner Nevada Gold Mines (40% PG/60% NGM), which is
itself a partnership between Barrick
Gold and Newmont Mining.
The PFS was prepared by Practical Mining LLC and based on the
current mineral reserves, utilizing drilling to November 2019 with a life of mine ("LOM") plan
that includes the underground El Niño Mine and the proposed Phase 1
Open Pit. Mineral Reserves are reported only for material amenable
to roasting from the Phase 1 pit and El Niño underground.
All PFS highlights below reflect only Premier's 40% ownership,
unless otherwise stated.
PFS Highlights of the Report include:
- $78.1 Million After-tax NPV5%
based on a US$1,400/oz gold price
based solely on the El Niño Mine and the Phase 1 Pit
- Phase 1 Pit only - 50% After-tax Internal Rate of return
("IRR")
- Combined All-in Sustaining Costs (AISC) of $851 per oz
- An increase in Proven and Probable mineral reserves of +27%,
Measured and Indicated mineral resources of +148% and Inferred
mineral resources of +917% versus December
31, 2018
- Proven and Probable mineral reserves of 350.5koz gold
averaging 2.87 g/t Au1
- The PFS does not include the potential of the Phase 3 open
pit, heap leach opportunity nor additional underground mining
scenarios
- Also does not include the results from the 2020 drill
program, targeting expansion of the El Niño
underground mine and the potential upgrading of the near-surface
mineralization
Premier anticipates that a new mineral resource estimate will be
completed in 2021 following receipt of all 2020 drilling results.
Following the mineral resource estimate, the Company believes an
updated PFS would be justified and should include a trade-off study
to determine the merits of developing the Phase 3 pit by
underground and/or open–pit mining methods and further refinement
of the heap leach opportunities at South Arturo.
______________________
|
1 Based upon variable cut-off grades
that are dependent on recovery and processing methods.
|
Economic Analysis
The life-of-mine (LOM) after-tax cash flow attributable to
Premier is estimated to be $463.4
Million, providing an after–tax NPV5 of $78.1 Million and an after-tax IRR of 50% for the
Phase 1 Pit. Highlight financial statistics for the PFS can be
found in Table 1.
Table 1: PFS Financial Statistics
(*Attributable to Premier)
Parameter
|
El Niño
UG
|
Phase 1
Pit
|
Combined
|
Gold price - base
case (US$/oz)
|
$1,400
|
$1,400
|
$1,400
|
Silver price - base
case (US$/oz)
|
$15
|
$15
|
$15
|
Mine life
(years)
|
2.0
|
18
|
18
|
Mining Rate
(tons/day)
|
600
|
135,000
|
NA
|
Strip Ratio (tons
waste:ton ore)
|
NA
|
6.9
|
NA
|
Processed tons
(ktons)
|
347
|
9,574
|
9,921
|
Average grade (oz/t
Au)
|
0.180
|
0.081
|
0.084
|
Average gold
recovery (roaster %)
|
88.5%
|
80.8%
|
81.4%
|
Average annual gold
production (koz)*
|
12
|
15
|
16
|
Total recovered
gold (koz)*
|
23.5
|
265.6
|
289.1
|
Capital
(M$)*
|
$ -
|
$29.7
|
$29.7
|
Cash cost
(US$/oz)1
|
$1,028
|
$616
|
$650
|
Processing Costs
($/ton)
|
19.66
|
20.22
|
20.20
|
All-in sustaining
cost (US$/oz)1
|
$1,066
|
$832
|
$851
|
Project after-tax
NPV5% (M$)*
|
$7.2
|
$70.8
|
$78.1
|
Project after-tax
IRR
|
NA
|
50%
|
NA
|
Payback
Period
|
NA
|
7.2
|
6.1
|
1. Net of
by-product sales
|
"While the Pre-feasibility Study currently contemplates mining
only a small portion of the overall resources contained on the
property, it highlights the robust economics of the project",
stated Ewan Downie, President and
CEO of Premier Gold Mines. "Substantial increases in mineral
reserves and resources support my belief that South Arturo has the
potential to grow for years to come. There continues to be
significant potential to increase the mine life by conversion of
resources to reserves from the 2020 drilling for both El Niño and
Phase 1, and continuing exploration as the deposits remain open for
further expansion. Overall, the project economics reflect well on
Nevada Gold Mines' discipline in
developing and operating their projects".
Sensitivity Analysis
The South Arturo project is a producing mine with low capital
requirements, operating costs and robust economics that include a
breakeven gold price (at a 5% discount rate) of $811/oz. The project remains economic with up to
40% increases in capital or operating costs and is most sensitive
to gold prices (see Table 2), operating and capital costs.
Table 2: Project Sensitivity Analysis
Gold Price ($/oz
Au)
% change for
sensitivity
|
$1,120
-20%
|
$1,400
0
|
$1,680
20%
|
$1,960
40%
|
NPV5
(millions)
|
$40.0
|
$78.1
|
$115.4
|
$152.4
|
Mineral Resources & Reserves
Mineral Reserves are reported only for material amenable to
roasting from the Phase 1 pit and El Niño underground and
summarized in Table 3.
Mineral Resources (exclusive of Mineral Reserves) as of
December 1, 2020 are presented in
Table 4 and include open–pit and stockpile mineralization, oxide
mineralization amenable to CIL milling or heap leach processing,
and refractory roaster material. Underground Mineral Resources are
entirely refractory and require roasting. The underground mineral
reserves and resources include all drill results up to November 20, 2019 and until September 12, 2019 for the open pit. Additional
drilling was completed in 2020 focusing on expansion of the El Niño
deposit at depth and proximal to the Phase 1 and Phase 3 deposits
to better define near-surface mineralization, the results of which
are not considered in this update.
Table 3: South Arturo Property Mineral
Reserves (40% basis) as of December 1,
2020
Process
|
Tons
(000's)
|
Tonnes
(000's)
|
Au
(opt)
|
Au
(g/t)
|
Ag
(opt)
|
Ag
(g/t)
|
Au
ozs
(000's)
|
Ag
ozs
(000's)
|
|
|
Proven
|
Open
Pit
|
2,617
|
2,374
|
0.089
|
3.05
|
0.500
|
17.15
|
233
|
1,309
|
Stockpile
|
220
|
200
|
0.074
|
2.54
|
0.129
|
4.44
|
16
|
29
|
Underground
|
66
|
60
|
0.186
|
6.38
|
0.135
|
4.62
|
12
|
9
|
Total
|
2,904
|
2,634
|
0.090
|
3.09
|
0.464
|
15.90
|
262
|
1,347
|
|
|
Probable
|
Open
Pit
|
1,212
|
1,100
|
0.063
|
2.16
|
0.419
|
14.37
|
76.4
|
508
|
Stockpile
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Underground
|
72
|
66
|
0.175
|
6.00
|
0.131
|
4.50
|
12.7
|
10
|
Total
|
1,285
|
1,166
|
0.069
|
2.38
|
0.403
|
13.81
|
89.1
|
518
|
|
|
Proven and
Probable
|
Open
Pit
|
3,829
|
3,474
|
0.081
|
2.77
|
0.475
|
16.27
|
309.1
|
1,817
|
Stockpile
|
220
|
200
|
0.074
|
2.54
|
0.129
|
4.44
|
16.4
|
29
|
Underground
|
139
|
126
|
0.180
|
6.18
|
0.133
|
4.56
|
25.0
|
18
|
Total
|
4,189
|
3,800
|
0.084
|
2.87
|
0.445
|
15.23
|
350.5
|
1,864
|
Mineral Reserve
Estimate Notes:
- Mineral Reserves
are stated as of December 1, 2020;
- Mineral Reserves
are estimated using variable cut-off grades that are dependent upon
recovery and processing method;
- Mineral Reserves
have been estimated at a gold price of $1,200 per troy ounce and a
silver price of $15 per ounce;
- The base case
economic analysis is presented at a gold price of $1,400 per ounce
and a silver price of $15 per ounce;
- Underground Mineral
Reserves include modifying mill to model reconciliation factors of
1.14 and – 0.96 applied to tons and contained metal respectively;
and,
- Modifying factors
for tons and contained metal have not been applied to open pit
Mineral Reserves.
|
|
|
|
|
|
|
|
|
|
|
|
Table 4: South Arturo Mineral Resources
Estimate (40% basis, exclusive of Mineral Reserves) as of
December 1, 2020
Process
|
Tons
(000's)
|
Tonnes(000's)
|
Au(opt)
|
Au(g/t)
|
Ag(opt)
|
Ag(g/t)
|
Au
ozs(000's)
|
Ag
ozs(000's)
|
|
|
Measured
|
Open
Pit
|
5,117
|
4,642
|
0.035
|
1.21
|
0.220
|
7.56
|
180.6
|
1,128
|
Stockpile
|
783
|
710
|
0.016
|
0.55
|
0.013
|
0.44
|
12.4
|
10
|
Underground
|
18
|
16
|
0.518
|
17.77
|
0.400
|
13.72
|
9.1
|
7
|
Total
|
5,917
|
5,368
|
0.034
|
1.17
|
0.193
|
6.63
|
200.2
|
1,145
|
|
|
Indicated
|
Open
Pit
|
16,073
|
14,581
|
0.034
|
1.17
|
0.176
|
6.02
|
548.6
|
2,824
|
Stockpile
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Underground
|
47
|
43
|
0.374
|
12.83
|
0.168
|
5.77
|
17.5
|
8
|
Total
|
16,120
|
14,624
|
0.035
|
1.20
|
0.176
|
6.02
|
566.1
|
2,832
|
|
|
Measured and
Indicated
|
Open
Pit
|
21,190
|
19,223
|
0.034
|
1.18
|
0.186
|
6.39
|
729.2
|
3,952
|
Stockpile
|
783
|
710
|
0.016
|
0.55
|
0.013
|
0.44
|
12.4
|
10
|
Underground
|
64
|
58
|
0.414
|
14.18
|
0.232
|
7.94
|
26.7
|
15
|
Total
|
22,037
|
19,992
|
0.035
|
1.20
|
0.180
|
6.19
|
768.3
|
3,977`
|
|
|
Inferred
|
Open
Pit
|
11,092
|
10,063
|
0.028
|
0.95
|
0.160
|
5.47
|
307.5
|
1,770
|
Stockpile
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Underground
|
60
|
55
|
0.247
|
8.46
|
0.148
|
5.08
|
14.9
|
9
|
Total
|
11,153
|
10,117
|
0.029
|
0.99
|
0.159
|
5.47
|
322.4
|
1,779
|
Mineral Resource
Estimate Notes:
- Mineral Resources
are exclusive of Mineral Reserves;
- Mineral Recourses
are stated as of December 1, 2020;
- Mineral Resources
are estimated using variable cutoff grades that are dependent upon
recovery and processing method;
- Open Pit Mineral
Resources are constrained within a pit shell generated using a gold
price of $1,500 per ounce and a silver price of $15 per
ounce;
- Underground Mineral
Resources are constrained by Mine Stope Optimizer shapes generated
using a gold price of $1,500 per ounce and a silver price of $15
per ounce;
- Modifying mill to
model factors for tons and contained metal have not been applied to
the open pit Mineral Resources;
- Underground Mineral
Resources include modifying mill to model reconciliation factors of
1.025 and – 0.901 applied to tons and contained metal,
respectively;
- A Mineral Resource
is a concentration or occurrence of solid material of economic
interest in or on the Earth's crust in such form, grade or quality
and quantity that there are reasonable prospects for eventual
economic extraction. The location, quantity, grade or quality,
continuity and other geological characteristics of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling;
and,
- An Inferred Mineral
Resource is that part of a Mineral Resource for which quantity and
grade or quality are estimated on the basis of limited geological
evidence and sampling. Geological evidence is sufficient to imply
but not verify geological and grade or quality continuity. An
Inferred Mineral Resource has a lower level of confidence than that
applying to an Indicated Mineral Resource and must not be converted
to a Mineral Reserve. It is reasonably expected that the majority
of Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration.
|
|
|
|
|
|
|
|
|
|
|
|
Qualified Person
Practical Mining LLC, under the supervision of Dagny Odell,
P.E., Laura Symmes, SME, and
Robert Raponi, P. Eng., each being
Qualified Persons within the meaning National Instrument (NI)
43-101, was the lead consultant for the Project PFS. A
technical report detailing the Project PFS will be filed within
45-days.
All abbreviations used in this press release are available by
following this link (click
here).
Non-IFRS Measures
The Company has included certain terms and performance measures
commonly used in the mining industry that are not defined under
International Financial Reporting Standards ("IFRS") within this
document. These Non-IFRS measures include cash cost per ounce sold,
all in sustaining cost ("AISC") per ounce sold. Non-IFRS measures
do not have any standardized meaning prescribed under IFRS, and
therefore, they may not be comparable to similar measures employed
by other companies. The data presented is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures prepared in accordance with IFRS.
Readers should refer to the Company's Management Discussion and
Analysis under the heading "Non-IFRS Measures" for a more detailed
discussion of how such measures are calculated.
Certain statements in this release constitute "forward-looking
statements" or "forward-looking information" within the meaning of
applicable securities laws. Such statements and information involve
known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the
company, its projects, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements or
information. Such statements can be identified by the use of words
such as "may", "would", "could", "will", "intend", "expect",
"believe", "plan", "anticipate", "estimate", "scheduled",
"forecast", "predict" and other similar terminology, or state that
certain actions, events or results "may", "could", "would", "might"
or "will" be taken, occur or be achieved. These statements reflect
the Company's current expectations regarding future events,
performance and results and speak only as of the date of this
release.
Such forward-looking statements include but are not limited to
the updated results of the Pre-Feasibility Study on the Project,
such as future estimates of internal rates of return, net present
value, future production, estimates of cash cost, proposed mining
plans and methods, mine life estimates, cash flow forecasts, metal
recoveries, estimates of capital and operating costs and the size
and timing of phased development of the Project. Furthermore, with
respect to this specific forward-looking information concerning the
development of the Project, the company has based its assumptions
and analysis on certain factors that are inherently uncertain.
Uncertainties include: (i) the adequacy of infrastructure; (ii)
geological characteristics; (iii) metallurgical characteristics of
the mineralization; (iv) the ability to develop adequate processing
capacity; (v) the price of gold; (vi) the availability of equipment
and facilities necessary to complete development; (vii) the cost of
consumables and mining and processing equipment; (viii) unforeseen
technological and engineering problems; (ix) accidents; * currency
fluctuations; (xi) changes in regulations; (xii) the compliance by
joint venture partners with terms of agreements; (xiii) the
availability and productivity of skilled labour; (xiv) the
regulation of the mining industry by various governmental agencies;
(xv) the ability to raise sufficient capital to develop such
projects; (xiv) changes in project scope or design; and (xv)
political factors.
Forward-looking statements and information involve significant
risks and uncertainties, should not be read as guarantees of future
performance or results and will not necessarily be accurate
indicators of whether or not such results will be achieved. A
number of factors could cause actual results to differ materially
from the results discussed in the forward-looking statements or
information, including, but not limited to, the factors discussed
below and elsewhere in this release, as well as unexpected changes
in laws, rules or regulations, or their enforcement by applicable
authorities; the failure of parties to contracts with the company
to perform as agreed; social or labour unrest; changes in commodity
prices; and the failure of exploration programs or studies to
deliver anticipated results or results that would justify and
support continued exploration, studies, development or
operations.
Although the forward-looking statements contained in this
release are based upon what management of the company believes are
reasonable assumptions, the company cannot assure investors that
actual results will be consistent with these forward-looking
statements. These forward-looking statements are made as of the
date of this release and are expressly qualified in their entirety
by this cautionary statement. Subject to applicable securities
laws, the company does not assume any obligation to update or
revise the forward-looking statements contained herein to reflect
events or circumstances occurring after the date of this
release.
The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of the
factors described herein and set out in the "Risks and Risk
Management" section in the company's Q3 2020 MD&A and under the
heading "Risk Factors" in its current annual information form.
SOURCE Premier Gold Mines Limited