Serbian Project Has A Pre-Tax NPV8% Of US$101 Million
Medgold Resources Corp. (TSX-V: MED) has completed a positive Preliminary Economic Assessment (PEA) for the Barje gold deposit at its Tlamino Project, Serbia.
Highlights of the PEA are:
- Based on simple open-pit mining methods and the production of a flotation concentrate via conventional processing techniques, the pre-tax NPV of the Project, at a discount rate of 8%, is US$101M, its IRR 49%, and its operating margin 61%.
- The up-front capital cost of the Project is US$74M (inclusive of a 15% contingency margin and further study and engineering costs) with payback achieved in two years.
- Life of mine C1 cash costs are US$464/oz Au, and life of mine all-in sustaining costs (AISC) are US$522/ounce Au.
- A gold price of US$1500/oz and a silver price of US$16.50/oz was used in the study. At an approximate spot gold price of US$1,800/oz, the post-tax NPV of the Project, at a discount rate of 8%, is US$139M, and its IRR 69%.
President and CEO, Jeremy Crozier, said it is Medgold’s intention to pursue a programme of infill drilling at Tlamino with the objective of upgrading the current Inferred Resource to the Indicated category, and the completion of a Pre-Feasibility Study thereafter. Drilling is expected to commence upon snow melt in Q1, 2021, further details of which will be provided in due course.
“The accomplishment of this highly positive Preliminary Economic Assessment – based entirely on conventional opening pit mining and processing techniques – is a critical success for Medgold,” Mr Crozier said.
“Together with the recent Option Agreement with Fortuna Silver Mines to acquire full ownership and management control of the Project, Medgold is now placed to unlock further value in Tlamino via the completion of infill drilling and a Pre-Feasibility Study – with the goals of further demonstrating the robust self-standing economics of the Project, and ultimately the achievement of mine permitting. Addison Mining Services Ltd., Bara Consulting Ltd. and Reach Partners Limited are thanked for their diligence in the preparation of the PEA.”
Scoping-level design and preliminary economic analysis thereof was undertaken for the Barje deposit of the Tlamino Project. The Mineral Resource Estimate for Barje as announced on January 30, 2020 has been updated in accordance with the metallurgical testwork and mining parameters identified during the course of the current study. An updated Inferred Mineral Resource of approximately 7.1 Mt at 2.5 g/t Au and 38 g/t Ag, containing approximately 570,000 oz of Au and 8.8 Moz of Ag is herein stated and has been used as a basis for this PEA.
Mining via open pit methods using a conventional truck and shovel fleet is contemplated, delivering approximately 600,000 tpa of two Run of Mine (“ROM”) material types – High-Grade Breccia and Low-Grade Schist to stockpile for processing, with a life-of-mine stripping ratio of approximately 4:1.
On site mineral processing is via grinding and flotation to a bulk Au-Ag bearing sulphide concentrate for sale to potential offtake customers in Asia. Preliminary economic analysis has been performed in accordance with the preliminary mine design and schedule, metallurgical testing, and concentrate payability analysis developed in the study, and the estimates and analyses therein have been prepared to scoping level (+-30%).
Oxidised material from the Mineral Resource was not considered by the PEA, and the nearby prospects at Liska and Karamanica were similarly omitted.
Mining is expected to be completed over four pit stages with an active life of mine (LOM) of approximately eight years, followed by a further two years of production from stockpile reclamation.
