PEA Contemplates Simple Open Pit Mine In Ghana
Newcore Gold Ltd (TSXV: NCAU, OTCQX: NCAUF) has unveiled positive results of an updated independent Preliminary Economic Assessment (PEA) completed for the company’s 100%-owned Enchi Gold Project in Ghana.
The PEA contemplates a technically simple, open pit mine and heap leach operation processing 6.6 million tonnes per annum (mtpa) utilising contract mining.
The PEA also reflects an updated, pit constrained, Inferred Mineral Resource of 70.4 million tonnes (Mt) grading 0.62 grams per tonne gold (g/t Au) containing 1.4 million ounces gold. Only 20,195m of drilling from the ongoing 66,000m drill programme was included in the updated Mineral Resource Estimate.
PEA Highlights
- Strong Project Economics with Low Capital Intensity
- At a gold price of US$1,650/oz: $333 million pre-tax net present value discounted at 5% (NPV5%) and a 54% pre-tax internal rate of return (IRR), US$212 million after-tax NPV5%, and a 42% after-tax IRR.
- At a gold price of US$1,850/oz: $471 million pre-tax NPV5% and a 69% pre-tax IRR, US$302 million after-tax NPV5%, and a 54% after-tax IRR.
- Initial capital costs estimated at US$97 million, with a short after-tax payback of 2.3 years.
- Establishing the Potential for a Robust Project with Significant Growth Potential
- Average annual gold production in years two through five of 104,171 ounces gold; 983,296 ounces gold recovered over an 11-year life of mine (LOM).
- LOM strip ratio of 2.1 to 1, mined grade of 0.57 g/t gold and recovery of 79%.
- LOM operating costs estimated at US$923/oz of gold, cash costsestimated at $1,043/oz of gold, LOM all-in sustaining costs (AISC) estimated at US$1,066/oz of gold.
- Updated Mineral Resource Estimate, Including an Initial Resource at Kwakyekrom
- The PEA includes an updated Inferred Mineral Resource Estimate of 70.4 Mt grading 0.62 g/t Au containing 1.4 million ounces gold.
- Incorporates 20,195m of drilling completed at Enchi in 2020 and early 2021.
- Additional Exploration upside from ongoing 66,000m Drill Programme at Enchi
- 46,000m of additional drilling was not included in the Mineral Resource Estimate.
- Exploration and drilling activities continue on the Enchi Gold Project, with drilling testing a series of highly prospective targets directed at extending the existing Mineral Resources along strike and down dip, further drilling of advanced gold targets across the 216 sq. km property, and first pass testing of multi-kilometre scale gold anomalies.
- Recent drilling results not included in the PEA Mineral Resource Estimate have intersected wide zones of oxide gold mineralization as well as high-grade core structures including 5.40 g/t Au over 9.0 m, 5.78 g/t Au over 7.0 m, 6.25 g/t Au over 6.0 m, 3.31 g/t Au over 9.0 m, and 2.95 g/t Au over 9.0 m and remain open along strike and to depth.
“The updated PEA is a notable milestone for Newcore as we look to highlight the value of not only the exploration upside across the district scale property but also the economic value of the current resources that we have defined on the Project,” President and CEO, Luke Alexander, said.
“The PEA results indicate that Enchi is an economically robust, low capital intensity, heap leach project with an after-tax NPV5% of $212 million and after-tax IRR of 42% at a gold price of $1,650 per ounce. Importantly, the economics also highlight the quick payback of capital, approximately two years after first gold pour. “We believe that the Project and economics have a tremendous amount of upside from resource expansion both from shallow, near surface oxide mineralisation, but also from the higher-grade structures that we are starting to define at depth.
“This PEA only includes 20,195 metres of drilling from our ongoing 66,000m drill programm, and only incorporates the shallow, open pit oxide material defined to date, with the first deeper drilling on the project underway to define the potential for resource growth at depth.
“We are excited to continue to define the district-scale, multi-million-ounce potential at Enchi and build off the underpinning of value that the updated PEA highlights.”
Greg Smith, Vice President of Exploration of Newcore said the PEA includes an updated Mineral Resource Estimate which has increased the pit constrained Inferred Mineral Resource to 70.4 Mt grading 0.62 g/t Au and containing 1.4 million ounces gold.
“The expansion was accomplished by extending the existing resources along strike and down dip, along with the inclusion of an initial resource estimate at Kwakyekrom which is interpreted to be an extension of the same structure hosting the Nyam Gold Deposit three kilometres to the north.
“All mineral resources remain open along strike and in all cases are defined by kilometre-scale gold-in-soil anomalies on surface and geophysical anomalies which characterize the structural trends. The inclusion of a shallow oxide resource at Kwakyekrom highlights the potential to discover additional deposits across the Project.
“We will continue to work towards defining the district scale potential of the Enchi Gold Project through our ongoing 66,000 metre drill programme.”
