Canada NewsWire
Reaffirms Project's Excellent Leverage To Rising Gold Prices
Increased 13.6 Million Ounce Resource Solidifies Standing As Largest
Independent Gold-Only Resource in
North America
Annual Average Production of 306,200 Ounces per Year Over 21 Year Mine Life
Significantly De-Risks Project and Forms Solid Foundation To Advance Project Forward
VANCOUVER, BC , Nov. 4, 2021 /CNW/ - International Tower Hill Mines Ltd. ("ITH" or the "Company") (TSX: ITH) (NYSE-MKT: THM) today announced the results of the Pre-Feasibility Study (the "PFS") for its Livengood Gold Project (the "Project") located near Fairbanks, Alaska . The PFS details a project that would process 65,000 tons per day and produce 6.4 million ounces of gold over 21 years from a gold resource estimated at 13.6 million ounces at 0.60 g/tonne. The PFS utilized a third-party review by Whittle Consulting and BBA Inc. to integrate new interpretations based on an expanded geological database, improved geological modelling, new resource estimation methodology, an optimized mine plan and production schedule, additional detailed metallurgical work at various gold grades and grind sizes, changes in the target grind for the mill, new engineering estimates, and updated cost inputs, all of which significantly de-risk the Project. The PFS has estimated the capital costs of the Project ("CAPEX") at US$1.93 billion , the total cost per ton milled ("OPEX") at US$13.12 , the all-in sustaining costs ("AISC") at US$1,171 per ounce, and an after-tax NPV(5%) of US$400 million at $1,800 /oz, US$975 million at US$2,000 /oz, and US$2.3 billion at $US2,500 /oz.
"This PFS confirms that the Livengood Gold Project is the one of the largest, highly leveraged gold projects in North America . This study is the culmination of years of work and greatly enhances our understanding of the deposit. We have now thoroughly evaluated, optimized, and de-risked all major elements of the Project and have an excellent foundation on which to build shareholder value. International Tower Hill's estimated 13.6 million ounces, together with our favorable jurisdiction and proximity to infrastructure, offers our investors great leverage to the gold price," said Karl Hanneman , CEO.
The Company invites you to attend a conference call and webcast hosted by CEO Karl Hanneman to discuss the Company and this news release.
Conference Call & Webcast Details:
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Date: |
November 5, 2021 at 12:00 pm ET |
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Webcast: |
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North American callers: |
1-877-270-2148 |
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International callers: |
1-412-902-6510 |
Pre-Feasibility Study Overview
The Project configuration evaluated in the PFS is a conventional, owner-operated surface mine that will utilize large-scale mining equipment in a blast/load/haul operation. Mill feed would be processed in a 65,000 tons per day comminution circuit consisting of primary and secondary crushing, wet grinding in a single semi-autogenous (SAG) mill and single ball mill followed by a gravity gold circuit and a conventional carbon in leach (CIL) circuit.
Whittle Enterprise Optimization
Prior to beginning the PFS, the Company retained Whittle Engineering and BBA Engineering to collaborate on an enterprise optimization study (the "Whittle and BBA Study") to review various technologies and project configurations and to recommend the optimum configuration for the PFS. The Whittle and BBA Study reviewed secondary crushing with SAG and ball mill, tertiary crushing with ball mill, gravity/CIL at P 80 of 90 micron to 250 micron, stand-alone and auxiliary heap leach configurations, gravity only gold recovery, gravity/flotation with pressure oxidation and CIL of flotation concentrate. These configurations were evaluated at various combinations of project ramp up strategy, annual throughput, primary, secondary, and tertiary grind size, as well as mining fleet size and stockpile management strategies. Tailings technologies reviewed included conventional tailings and pressure filtered tailings.
The Whittle and BBA Study determined that the gravity/CIL plant at P 80 250 micron with conventional tailings provided the highest NPV, which is the configuration detailed in the PFS.
Pre-Feasibility Study Summary
The PFS was prepared by independent third-party consultants and provides information on the optimized Project with higher throughput, an updated resource estimate, and capital and operating cost estimates as compared to the project evaluated in the National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") April 2017 Technical Report (the "2017 Report"). The final version of the NI 43-101 technical report containing the PFS will be filed on SEDAR within 45 days. As a result of the changes to the Project as evaluated in the PFS, including differences in the mineral resource estimation methodology and changes to the economic parameters applied to the geologic block model (gold price, recovery, CAPEX, and OPEX), all of which resulted in a change in the mineral resources, the Project as evaluated in the 2017 Report is no longer considered current and the 2017 Report should therefore not be relied upon by investors.
The Company cautions that the PFS is preliminary in nature, and is based on technical and economic assumptions which would be further refined and evaluated in a full feasibility study. The PFS is based on an updated Project mineral resource estimate effective as of August 20, 2021 using a different mineral resource model than what was used in the 2017 Report.
The following is a summary of the material aspects and assumptions of the PFS. Investors are urged to review the complete NI 43-101 report following its filing on SEDAR for complete details of the PFS.
The engineering design to estimate capital costs used in the PFS are within a -20%/+25% accuracy.
Project Location
The Project is connected by an existing paved highway to the city of Fairbanks , 70 miles to the southwest in central Alaska . The Project is located in an active mining district that has been mined for gold since 1914. The State of Alaska land use plan designates mining as the primary surface land use for the area in which the Project is located. Employees would be bussed daily to the site from Fairbanks .
Infrastructure
The Project would include a lined tailings management facility, an administration office/shop/warehouse complex, and would also include construction of a 50-mile 230kV electrical transmission line to the mine site from the existing grid power near Fairbanks, Alaska .
Environmental and Community Relations
Twelve continuous years of baseline environmental work continues to indicate that all aspects of the Project can be successfully and safely managed. The design of the tailings facility incorporates best practices including a lined rock fill structure with a lined tailings basin. The Project development team has considerable experience working with Alaska's large mine permitting process and has a proven and respected track record of developing mining projects safely and in an environmentally sound manner. The Project has already and will continue to provide local economic opportunities with local access to a highly skilled and available work force. The Company is also working to seek early input on the Project and to explore ways to maximize economic benefits to the local communities.
Summary of Results of the 65,000 Tons Per Day PFS
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OPERATING METRICS |
2021 PFS |
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Mill Throughput |
65,000 |
tons/day |
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Head Grade – Year 1-5 (1) |
0.79 |
g/tonne |
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Head Grade – LOM (1) |
0.65 |
g/tonne |
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Gold Recovery – LOM |
71.4 |
% |
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Mine Life |
21 |
years |
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Total Ounces Produced |
6,430,178 |
Troy ounces |
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Average Annual Production – Year 1-5 |
388,600 |
Troy ounces |
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Average Annual Production – LOM |
306,200 |
Troy ounces |
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Total Ore Processed |
474 |
Million tons |
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Total Waste (2) |
547 |
Million tons |
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Annual Mining Rate |
52 |
Million tons |
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Waste Rock to Mill Ore (ton) Ratio – LOM during production |
0.98:1 |
Waste to Ore |
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Waste Rock to Mill Ore (ton) Ratio – LOM |
1.15:1 |
Waste to Ore |
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Low Grade Stockpile – Total Placed/Maximum Size |
105/88 |
Million tons |
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(1) Diluted grade |
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(2) Includes 84 million tons pre-production
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FINANCIAL METRICS |
2021 PFS |
US$ |
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CAPEX – Initial |
1.93 |
$Billion |
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CAPEX – Sustaining |
658 |
$Million |
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Reclamation & Closure |
322 |
$Million |
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OPEX – Mining |
2.05 |
$/ton mined |
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OPEX – Processing |
7.72 |
$/ton ore |
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OPEX – General &Administrative (G&A) |
1.35 |
$/ton ore |
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OPEX - Operating Cost – Year 1-5 |
887 |
$/Ounce |
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OPEX - Operating Cost – LOM |
1,068 |
$/Ounce |
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All-In Sustaining Cost of Production – Year 1-5 |
1,038 |
$/Ounce |
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All-In Sustaining Cost of Production – LOM |
1,171 |
$/Ounce |
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Gold Price Sensitivity Analysis
The following table shows the average annual free cash flow and EBIDTA generated by the Project at various gold prices.
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(US$M) |
FREE CASH FLOW |
EBIDTA |
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Gold Price
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Average Annual
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Average Annual
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Average Annual
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Average Annual
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$1,500 |
$159 |
$108 |
$229 |
$142 |
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$1,680 PFS
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$225 |
$154 |
$296 |
$197 |
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$1,800 |
$269 |
$184 |
$342 |
$234 |
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$2,000 |
$332 |
$232 |
$417 |
$295 |
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$2,500 |
$482 |
$349 |
$605 |
$449 |
The following table shows the after-tax economics at various gold prices.
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Gold Price ($/Oz) |
AFTER TAX
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AFTER TAX
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IRR (%) |
Payback (Years) |
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$1,500 |
$202 |
($512) |
1.00% |
16.2 |
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$1,680 (PFS Base
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$1,137 |
$45 |
5.30% |
10.4 |
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$1,800 |
$1,741 |
$400 |
7.70% |
8.2 |
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$2,000 |
$2,729 |
$975 |
11.20% |
6.3 |
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$2,500 |
$5,102 |
$2,351 |
18.50% |
3.9 |
Capital Costs
Key capital expenditures for initial and sustaining capital requirements are identified in the following table.
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|
US$ Million |
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Description |
Initial |
Sustaining |
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Process Facilities |
$433 |
|
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Infrastructure Facilities |
459 |
$514 |
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Power Supply |
87 |
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Mine Equipment |
200 |
139 |
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Mine Development |
230 |
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Owners Costs |
296 |
5 |
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Contingency |
220 |
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Total |
$1,925 |
$658 |
Rounding of some figures may lead to minor discrepancies in totals.
All-in Sustaining Costs
The table below highlights the all-in sustaining costs and the all-in cost over the life of the Project:
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Year 1-5 |
LOM |
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|
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US$/Ounce |
US$ Million |
US$/Ounce |
US$ Million |
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|
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Operating Costs |
$887 |
$1,724 |
$1,068 |
$6,870 |
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Sustaining Capital Expenditures |
151 |
292 |
102 |
658 |
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All-In Sustaining Costs (1) |
$1,038 |
$2,016 |
$1,171 |
$7,529 |
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Capital Expenditures (2) (3) |
0 |
0 |
299 |
1,925 |
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Funding of Reclamation Trust Fund (4) |
30 |
58 |
42 |
268 |
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|
All-In Costs (1) |
$1,068 |
$2,075 |
$1,512 |
$9,722 |
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Rounding of some figures may lead to minor discrepancies in totals. |
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(1)
All-In Sustaining Costs and All-In-Costs are non-IFRS
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(3)
Excludes US$40 million of recoverable initial stores
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(2) Includes initial capital expenditures only. |
( 4) Total US$322 million estimated costs. |
Annual Gold Production
The chart below highlights the anticipated production schedule. Total life-of-mine production is anticipated to be 6,430,178 ounces. Mill feed will consist of reclaimed ore from the low-grade stockpile during Years 18 through 21.
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Year |
Mill Feed Grade (g/tonne) |
Ounces Produced (000) |
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1 |
0.76 |
321 |
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2 |
0.69 |
388 |
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3 |
0.93 |
482 |
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4 |
0.93 |
437 |
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5 |
0.61 |
314 |
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6 |
0.61 |
328 |
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7 |
0.64 |
340 |
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8 |
0.64 |
329 |
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9 |
0.69 |
357 |
|
10 |
0.58 |
306 |
|
11 |
0.61 |
296 |
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12 |
0.72 |
336 |
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