Revival Gold Delivers Solid Phase One Preliminary Economic Assessment




  • In Business
  • 2020-11-17 12:30:00Z
  • By GlobeNewswire
Revival Gold Delivers Solid Phase One Preliminary Economic Assessment
Revival Gold Delivers Solid Phase One Preliminary Economic Assessment  

72,000 ounces gold per year at $1,057 per ounce AISC with a 25% after-tax IRR

Figure 1:


PEA Sensitivity

TORONTO, Nov. 17, 2020 (GLOBE NEWSWIRE) -- Revival Gold Inc. (TSXV: RVG, OTCQB: RVLGF) ("Revival Gold" or the "Company"), a growth‐focused gold exploration and development company, is pleased to announce positive results from a Preliminary Economic Assessment ("PEA") on the Company's Beartrack-Arnett ("Beartrack-Arnett") phase one heap leach gold project located in Idaho, USA.

Beartrack-Arnett Phase One Heap Leach Gold Project - PEA Highlights*

  • Production of 72,000 ounces of gold per year for a total of 506,000 ounces of gold over an initial seven-year mine life;

  • Pre-production capital of $100 million and life-of-mine ("LOM") sustaining capital of $61 million;

  • Total cash cost of $809 per ounce and all in sustaining cost of $1,057 per ounce of gold;

  • After-tax NPV at a 5% discount rate ("NPV5%") of $88 million and after-tax IRR of 25% at $1,550 per ounce gold increasing to a $211 million NPV5% and 49% IRR at $1,950 per ounce gold;

  • After-tax payback period of 3.0 years;

  • Lower technical and execution risk of a brownfields project with existing infrastructure and recent history as the largest past-producing gold mine in Idaho; and,

  • Excellent additional exploration potential as demonstrated by this season's drill results and with over 10km of favorable geological structure to explore.

* All amounts shown are in United States dollars and metric units of measurement unless otherwise stated.

This PEA is preliminary in nature; it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

For the purposes of this phase one PEA, only oxide and partially oxidized mineralization amenable to gold recovery using standard cyanide heap leach processing was evaluated representing less than a third of available mineralized material. Beartrack-Arnett also hosts a significant sulfide resource, much of which was not included in this PEA.

"This PEA supports Revival Gold's plans to resume meaningful heap leach gold production from Beartrack-Arnett with low re-start capital and robust economics," commented Hugh Agro, President and CEO. "Beartrack-Arnett ranks as one of the largest independently-owned undeveloped gold deposits in the United States. As a brownfield site, Beartrack-Arnett offers significant existing baseline environmental data, infrastructure, and operating history for Revival Gold to utilize. This should translate into shorter permitting timelines and lower technical and execution risk. Over the course of the next two years Revival Gold will continue with its exploration strategy to expand the resource base at Beartrack-Arnett while progressing the first phase heap leach project towards a production decision. We also intend to evaluate the potential for a second phase sulfide milling project so that we might fully realize the inherent value of all the gold resources identified at Beartrack-Arnett to-date."

The PEA was prepared in accordance with National Instrument 43-101 ("NI 43-101") by Wood plc ("Wood") of Oakville, Canada and Boise, Idaho with an effective date of November 17th, 2020. The Company will file a technical report summarizing the PEA on www.revival-gold.com and on SEDAR at www.sedar.com in accordance with NI 43-101 within 45 days.

Conference Call

Management will host a conference call later today to discuss the results of the PEA. Call-in information below:

Scheduled Start:

November 17th, 2020, 10:00 am EST

Call-In Number:

416-764-8658

Toll Free in North America:

888-886-7786

A replay of the conference call will be available for one week at 416-764-8691 or toll free in North America at 877-674-6060. Playback passcode 347502#.

Further Details

Table 1 below summarizes the key PEA technical and financial inputs and results.

Table 1 - Technical Inputs and Financial Assumptions

Economics

Units

Pre-Tax

Post-Tax

Net present value (NPV5%)

US$ M

$103

$88

Internal rate of return (IRR)

%

28%

25%

Payback Period (undiscounted)

years

2.9

3.0

LOM avg. annual cash flow

US$ M

$22

$19

LOM cumulative cash flow (undiscounted)

US$ M

$153

$134

LOM Average cash costs

US$ per ounce

$809

LOM Average AISC - All in Sustaining Costs

US$ per ounce

$1,057

LOM Average AIC - All in Costs

US$ per ounce

$1,254

Pre-Production Capital Costs

US$ M

$100

Sustaining Capital Costs (LOM)

US$ M

$62

Peak Investment

US$ M

$112

Gold price assumption

US$ per ounce

$1,550

Royalty

per ounce

$19

Mine life

years

7

Head Grade (diluted)

g/t Au

0.87

Average Recovery

% (FA)

60%

Average annual mining rate

tonnes/day

12,000

Average annual gold production

ounces/year

72,288

Total LOM recovered gold

ounces

506,016

Mineral Resource Estimate

The mineral resource estimate has been reported in accordance with NI 43-101 and was prepared by RPA Inc. ("RPA"), a subsidiary of SLR Consulting Limited. ("SLR"), with an effective date of December 10th, 2019 (see Revival Gold press release dated February 3rd, 2020 and the Technical Report on the Beartrack-Arnett Gold Project, Lemhi County, Idaho, USA dated February 21st, 2020).

Following the February 21st, 2020 Technical Report, a follow-up review of the Arnett resources and a sensitivity analysis conducted by RPA resulted in a fine tuning and reclassification of 3,000 ounces from the Inferred to the Indicated category. For this PEA, the resource estimate at Arnett has been restated to reflect this change and is not considered material to the economics of the property as the total Indicated plus Inferred remains unchanged. Results from Revival Gold's 2020 exploration drilling program are not included in this estimate.

Table 2: Mineral Resource Estimate

Resource Category

Tonnes
('000 t)

Gold Grade
(g/t Au)

Contained Gold
(000 oz)

Indicated Leach

Beartrack - Open Pit

11,900

0.56

215

Arnett - Open Pit

2,500

0.65

52

Indicated Mill

Beartrack - Open Pit

22,216

1.52

1,089

Beartrack - Underground

NA

NA

NA

Total Indicated

36,616

1.15

1,356

Inferred Leach

Beartrack - Open Pit

9,961

0.53

169

Arnett - Open Pit

8,200

0.55

144

Inferred Mill

Beartrack - Open Pit

22,228

1.19

850

Beartrack - Underground

6,700

2.19

471

Total Inferred

47,089

1.08

1,638


  1. Effective date of December 10, 2019. CIM (2014) definitions were used for Mineral Resource classification.

  2. Qualified Persons:
    Mark B. Mathisen, C.P.G, Ryan Rodney, C.P.G., Kathleen A. Altman, Ph.D., P.E.
    Mineral Resources were tabulated for model blocks with positive net value located within an optimized conceptual pit.

  3. The price, recovery, and cost data translate to a breakeven gold cut-off grade of approximately 0.52 g/t Au for mineral resources amenable to the mill option and open pit mining; and 0.17 g/t Au for the mineral resources amenable to the leach option and open pit mining at Beartrack; a breakeven gold cut-off grade of approximately 1.26 g/t Au for the incremental underground mill option at Beartrack, and approximately 0.19 g/t Au for the leach option and open pit mining at Arnett. The cut-off grades include considerations of metal price, process plant recovery, mining, processing, and general and administrative costs. A gold price US$1,400 per ounce was used in the estimation. Additional details below.

  4. Tonnes are based on bulk density of each lithologic unit ranging at Beartrack from 2.0 t/m3 to 2.75 t/m3. An average bulk density of 2.35 t/m3 was used at Arnett.

  5. Leachability is yet to be determined and further metallurgical studies are required to fully understand the behaviour of transitional and sulfide ores when mixed with readily leachable oxide materials. Leach material defined by cyanide soluble grade leach characteristics.

  6. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

  7. Rounding may result in apparent discrepancies between tonnes, grade, and contained metal content. The geological model supporting the mineral resource model is based on interpretations based on drilling and mapping which may change with more data. The metallurgical sampling data may not be representative of the material as a whole, or may have significant variations locally in the metallurgical characteristics that could affect cost or recoveries.

  8. The cut-off grade for the open pit mill resource assumes a 20,000 tpd flotation mill with pressure oxidation of flotation concentrate followed by cyanidation of the concentrate and the flotation tailings, with gold recovery of 94%, pit slopes of 37-50%, mining costs of $2.25 per tonne, re-handle costs of $0.10 per tonne, G&A costs of $0.50-$1.00 per tonne and a mill processing cost of $18.46 per tonne.

  9. The cut-off grade for the mineral resources amenable to underground mining and mill processing assumes a 3,000 tpd, ramp-access, mechanized mine with a bulk mining method and mining cost of $35.00 per tonne.

  10. The cut-off grade for the mineral resources amenable to open pit mining and heap leach processing assumes recoveries of 85% of cyanide soluble gold at Beartrack and 75% of contained gold at Arnett. Pit slopes of 37-50%. Mining costs were assumed to be $2.25 per tonne, G&A costs of $0.50-$1.00 per tonne and heap leach processing costs of $3.25 per tonne processed.

Mine Production Schedule

Table 3: Mine Production Schedule

Item/Year

PP1

Y1

Y2

Y3

Y4

Y5

Y6

Y7

Life of
Mine

Mined Processed Material

Tonnes/Day

n. a.

12,003

12,003

12,003

12,003

12,003

12,004

10,737

11,822

Mined Processed Material

Tonnes '000

0

4,381

4,381

4,381

4,381

4,381

4,382

3,919

30,206

Mined Waste

Tonnes '000

5,573

11,953

11,953

11,953

11,953

11,953

11,952

8,290

85,579

Mined Total

Tonnes '000

5,573

16,334

16,334

16,334

16,334

16,334

16,334

12,209

115,786

Stripping Ratio

Waste to Processed Material

n. a.

2.7

2.7

2.7

2.7

2.7

2.7

2.1

2.8

Head Grade

g/t Au

0.00

1.13

0.82

0.77

1.20

0.87

0.77

0.52

0.87

Contained Gold

Ounces

0

159,475

116,084

107,786

169,045

122,459

107,922

65,234

848,005

Recovery

% (FA)

0%

47%

63%

65%

46%

60%

73%

89%

60%

Recovered Gold

Ounces

0

75,177

73,263

70,084

77,462

73,620

78,494

57,916

506,016


Infrastructure

Existing infrastructure incorporated into the PEA includes the main access road, the main powerline, the ADR plant, solution ponds, water treatment plant, the core warehouse and portions of the existing road from Beartrack to Arnett.

Capital Costs

Pre-production capital costs include a 22% contingency on direct and indirect costs. The pre-production capital costs also include owner's costs, EPCM (engineering, procurement and construction management) costs, operating inventories, insurance and indirect costs. Major mining equipment is included in the financial analysis under an operating lease arrangement.

Trade-off studies were evaluated including developing crushing and leach pad facilities at the Arnett deposit (together with a powerline from Beartrack), mobile compared to stationary crushing facilities, contractor mining compared to owner operation in the first two years, and a higher early cash flow mining plan alternative.

Table 4 below summarizes estimated capital costs. The estimating cost accuracy for the study is +/-35% (AACE Class 5). Rows and columns may not add precisely due to rounding.

Table 4: Capital Cost Summary

Item

Pre-Production
Capital
(US$ M)

Sustaining
Capital
(US$ M)

Life of Mine
Capital
(US$ M)

Open pit mine

$16

$5

$21

Heap Leach facilities

$12

$40

$52

Process Facilities

$19

$2

$21

Infrastructure

$15

$3

$18

Indirect Costs

$10

$2

$12

Owner's Costs

$8

$0

$8

Contingency

$20

$10

$30

Subtotal

$100

$62

$162

Mine Equipment Lease

$21

$8

$29

Working Capital

$7

-$7

$0

Reclamation / Closure

$4

$13

$17

Grand Total

$132

$75

$207


Operating Costs

Owner operating costs were developed from first principles and are summarized in Table 5 below.

Table 5: Operating Cost Summary

Costs

Units

US$

Mining

Per tonne

$2.05

Stripping Ratio

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