Preliminary Economic Assessment (PEA)

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The Full Technical Report for the Preliminary Economic Assessment on the North Bullfrog project is expected to be filed and available on SEDAR and this website by November 20, 2020.

Highlights of the PEA:

Preliminary Economic Assessment - North Bullfrog Project @ USD $1,500/oz Gold Price

Parameter Summary Data
Pre-Tax Cash Flow; IRR USD $763 M; 55%
Post-Tax NPV5%; IRR USD $452 M; 47%
Overall Strip Ratio 0.91 to 1 (overburden – process tonne)
Cash Cost Years 1-7 (USD per Au ounce) $589
AISC Years 1-7 (USD/produced Au oz) $727
Year 1-7 Average Annual Gold Production 147,000 ounces
Mine Life 14 years
Total Gold Production 1,466,550 ounces
Initial Capital Cost (USD) $167M
Sustaining Capital Cost (USD) $132M
Average Mill Recovery1 (%) Au 85%
Ag 63%
Average Heap Leach Recovery (%) Au 72%
Ag 13%
Average Total Mining Rate2 (t/day) 84,800
Average Mineralization Mining Rate* (t/day) 43,300

1-mill recovery -gravity concentrate plus heap leach of gravity tail
2-14-year rate including capitalized mining in year -1

Figure 1

North Bullfrog Project location map and conceptual infrastructure layout for area

Select Estimates for first 7 years of PEA production Plan for North Bullfrog Project

First 7 Years of Production (Mill & Heap Leach)
  Heap Leach1 Mill2 Total
Total Estimated Ozs of Mineralized Material Processed Au 826,170 551,770 1,377,940
Ag 2,489,380 4,029,980 6,519,360
Recovery (%) Au 72% 85% 77%
Ag 13% 63% 44%
Total Estimated Ozs from Mineralized Material Recoverable Au 598,030 466,900 1,064,930
Ag 316,790 2,537,800 2,854,590
Estimate Avg. Annual Gold Ozs Production3 for the first 7 years 80,2903 66,7103 147,0003

1-Heap leach recoverable gold excludes mill recovery of YellowJacket gravity tail
2-Mill recoverable gold includes heap leach recovery from YellowJacket gravity tail
3-Includes adjustments for pad inventory build-up in early years

Sensitivity Analysis for Preliminary Economic Assessment, North Bullfrog Project (USD)   

Gold Price ($/Oz) Pre-Tax Free Cash Flow  ($M) Pre-Tax IRR Post-Tax NPV @ 5% ($M) Post Tax IRR Payback (Yrs)
$1,200 $313 32% $172 27% 2.8
$1,400 $613 48% $360 41% 2.3
$1,500 (base case) $763 55% $452 47% 2.1
$1,600 $913 62% $544 53% 2.0
$1,800 $1,213 74% $725 64% 1.8
$1,900 $1,363 80% $815 70% 1.7
$2,000 $1,513 86% $905 75% 1.7

     

Resource Assumptions1 for North Bullfrog Project PEA

Parameter Unit Mayflower Jolly Jane Sierra Blanca YellowJacket
Mining Cost USD/total tonne 1.64 1.70 1.70 2.23
Au Cut-Off g/tonne 0.08 0.06 0.06 0.35
Processing Cost USD/process tonne 1.72 1.72 1.72 4.21
Au Recovery % 72 62 73 85
Ag Recovery % 13 6 13 65
Administrative Cost USD/process tonne 0.50 0.50 0.50 0.50
Refining & Sales USD/Au oz 5.00 5.00 5.00 5.00
Au Selling Price USD/oz 1,500 1,500 1,500 1,500
Slope Angle Degrees 50 50 50 50

1-Cost and recovery assumptions used in Whittle Pit Evaluations

Figure 2

North Bullfrog Project location map and conceptual infrastructure layout for area zoomed

North Bullfrog Project PEA Mineral Resource Summary (effective Sept. 4, 2020)
(pit constrained at $1,500/oz gold price)

  Mill Resource Run of Mine Heap Leach
  (0.20-0.40 g/t Au cut-off grade) (0.06-0.10 g/t Au cut-off grade)
Mineral Resource Category Tonnes (M) Gold   (g/t) Gold (kozs) Tonnes (M) Gold   (g/t) Gold (kozs)
Measured 9.54 1.46 447 27.60 0.25 222
Indicated 15.13 1.21 590 139.87 0.19 848
Total M & I 24.67 1.31 1,037 167.47 0.20 1,070
Inferred 0.42 0.97 13 67.25 0.19 401
 
  Mill Resource Run of Mine Heap Leach
  (0.20-0.40 g/t  Au cut-off grade) (0.06-0.10 g/t Au cut-off grade)
Mineral Resource Category Tonnes (M) Silver   (g/t) Silver (kozs) Tonnes (M) Silver   (g/t) Silver (kozs)
Measured 9.54 10.18 3,121 27.60 0.78 695
Indicated 15.13 7.61 3,702 139.87 0.62 2,788
Total M & I 24.67 8.60 6,823 167.47 0.65 3,483
Inferred 0.42 7.96 107 67.25 0.55 1,185
 

Total Project Measured & Indicated ounces: 2.1Mozs Gold; 10.3 Mozs Silver

Total Project Inferred ounces: 0.41Mozs Gold; 1.29 Mozs Silver

  • See Cautionary Note to US Investors below*
  • The Mineral Resources above are effective as of September 4, 2020
  • Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
  • There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources
  • Assumes heap leach processing of disseminated oxidized mineralization
  • Assumes gravity mill processing of NBP YellowJacket oxide mineralization with heap leach processing of the gravity tail
  • Au Cut-Off - break-even grade derived from Whittle input parameters at USD $1,500 per ounce gold price

The North Bullfrog PEA is preliminary in nature, and 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 PEA will be realized.  Mineral resources that are not mineral reserves do not have demonstrated economic viability

The National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) technical report for the North Bullfrog PEA and updates of the North Bullfrog mineral resource estimate is expected to be filed on the Company’s SEDAR profile by the end of the business day on November 20, 2020.  For readers to fully understand the information in this news release, they should read the technical report in its entirety, including all qualifications, assumptions and exclusions that relate to the PEA. The technical report is intended to be read as a whole, and sections should not be read or relied upon out of context.

Cash Costs per Ounce of Gold – The Company calculates cash costs per ounce by dividing operating expenses per the consolidated statement of operations, net of silver sales by-product revenue, by the gold ounces sold during the applicable period. Operating expenses include mine site operating costs such as mining, processing and administration as well as royalties, however excludes depletion and depreciation and rehabilitation costs.

Sustaining Costs or AISC – The Company defines sustaining costs as the sum of operating cash costs (per above), sustaining capital (capital required to maintain current operations at existing levels), corporate administration costs, sustaining exploration, and rehabilitation accretion and amortization related to current operations. Sustaining costs excludes capital expenditures for significant improvements at existing operations deemed to be expansionary in nature, exploration and evaluation related to growth projects, financing costs, debt repayments, and taxes. 

Cautionary Note to US Investors

NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.  Unless otherwise indicated, all resource estimates contained in or incorporated by reference in this press release have been prepared in accordance with NI 43-101 and the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resource and Mineral Reserves, adopted by the CIM Council on November 14, 2004 (the “CIM Standards”) as they may be amended from time to time by the CIM.

United States investors are cautioned that the requirements and terminology of NI 43-101 and the CIM Standards differ significantly from the requirements and terminology of the SEC set forth in the SEC’s Industry Guide 7 (“SEC Industry Guide 7”).  Accordingly, the Company’s disclosures regarding mineralization may not be comparable to similar information disclosed by companies subject to SEC Industry Guide 7.  Without limiting the foregoing, while the terms “mineral resources”, “inferred mineral resources”, “indicated mineral resources” and “measured mineral resources” are recognized and required by NI 43-101 and the CIM Standards, they are not recognized by the SEC and are not permitted to be used in documents filed with the SEC by companies subject to SEC Industry Guide 7.  Mineral resources which are not mineral reserves do not have demonstrated economic viability, and US investors are cautioned not to assume that all or any part of a mineral resource will ever be converted into reserves.  Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically.  It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher resource category.  Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility study, except in rare cases.  The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant “reserves” as in-place tonnage and grade without reference to unit amounts.  The term “contained ounces” is not permitted under the rules of SEC Industry Guide 7.  In addition, the NI 43-101 and CIM Standards definition of a “reserve” differs from the definition in SEC Industry Guide 7.  In SEC Industry Guide 7, a mineral reserve is defined as a part of a mineral deposit which could be economically and legally extracted or produced at the time the mineral reserve determination is made, and a “final” or “bankable” feasibility study is required to report reserves, the three-year historical price is used in any reserve or cash flow analysis of designated reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. The mine economics presented herein and derived from the PEA are preliminary in nature and may not be realized. The PEA is not a feasibility study. U.S. investors are urged to consider closely the disclosure in our latest reports and registration statements filed with the SEC. You can review and obtain copies of these filings at http://www.sec.gov/edgar.shtml. U.S. Investors are cautioned not to assume that any defined resource will
ever be converted into SEC Industry Guide 7 compliant reserves
.