Highlights
- PEA assumes 5,000 tonnes per day (“tpd”) run-of-mine heap leach operation
- Average annual payable gold production of 31,000 oz
- 50% Pre-Tax Internal Rate of Return (“IRR”), 35% After-Tax IRR
- US$50 Million Pre-Tax Net Present Value (“NPV”), US$34 Million After-Tax NPV
- After-Tax Payback Period 1.8 years from start of production
- Average annual after-tax free cash flow of US$23 Million
- Initial capital expenditure (“Capex”) of US$36 Million (includes US$5 Million for EPCM and indirect costs in addition to US$5 Million as contingency)
- AISC of US$744/oz Au
- Average gold recovery of 75%; total cash operating cost of US$13/tonne
- Creation of approximately 100 direct jobs and 50 indirect jobs during operation
-
Direct taxes payable to Government of $24 million over life of mine
TORONTO, April 26, 2021 (GLOBE NEWSWIRE) -- Unigold Inc. (“Unigold” or the “Company”) (TSX-V:UGD; OTCQX: UGDIF; FSE:UGB1) is pleased to provide the results from the independent Preliminary Economic Assessment (“PEA”) prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") on its 100% owned Candelones Oxide Project in the Dominican Republic.
Joseph Hamilton, Chairman and CEO of Unigold notes: “ The Candelones Oxide project has been designed as a small footprint, environmentally friendly operation that will establish the Company in the local area of the Dominican Republic. The economics are compelling enough that this is being considered as a stand-alone operation providing near term cash flow as the Company continues to expand and evaluate the larger sulphide resource which the Company believes offers a longer-term development opportunity. The Company will move to rapidly develop both projects over the next few years as it concurrently moves the oxide project through required community consultation, environmental studies, detailed engineering and permitting while completing metallurgy, preliminary design and market studies for the sulphide project. Recent exploration drilling at the Candelones Extension identified additional potential for oxide resource expansion to the east of the known deposit while continuing to expand the available sulphide resource.
The resource mined in this PEA includes inferred mineral resources which contribute approximately 27% to the life of mine production schedule. The Company intends to complete the additional drilling recommended by our lead consultant, Micon, to rapidly upgrade this inferred resource to measured and indicated status, allowing it to be included in the planned Feasibility Study. The Company intends to transition directly into a Feasibility Study on the oxide project as soon as possible. Additional oxide material has been collected and is being shipped to Canada for large diameter, run of mine column tests to confirm the recovery assumptions used in the PEA. We are targeting the end of 2021 to have all materials and studies assembled to allow the Government to proceed with permitting of this project.”
This independent study was prepared by Micon International Limited under the supervision of Mr. Richard Gowans, B.Sc. P.Eng., President and Principal Metallurgist, Micon International Limited (“Micon”) and included contributions from the geological and engineering teams at Micon and Halyard Inc. (Toronto). These firms provided the mineral resource estimates, design parameters and operating and capital cost estimates for mine operations, process facilities, major equipment selection, infrastructure, and project economic analysis. A full technical report will be filed on www.sedar.com , and will be available on the Company’s website, within 45 days.
The pertinent input parameters and results of the Candelones Oxide PEA Study (Base Case) are presented in Table 1 to Table 4. Table 5 presents the NPV and IRR sensitivity to variability in gold price, capital cost, and operating cost. Mineral resources for the Candelones project are shown in Table 6.
Resource Estimate
The PEA is based on the measured, indicated and inferred oxide mineral resource estimated by Mr. W. Lewis, P.Geo. and Mr. A. San Martin, MAusIMM (CP) of Micon International Limited with an effective date of August 17, 2020 and is included with a NI43-101F1 Technical Report titled “UPDATED MINERAL RESOURCE ESTIMATE FOR THE CANDELONES PROJECT NEITA CONCESSION DOMINICAN REPUBLIC” which is available at www.sedar.com and on the Company’s website. Micon is independent of Unigold and Messrs. Lewis and San Martin meet the requirements of a “Qualified Person” as established by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards for Mineral Resources and Mineral Reserves (May, 2014).
Cautionary Statement: The reader is advised that the PEA summarized in this news release is intended to provide only an initial, high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of inferred mineral resources. Inferred mineral resources are considered to be too speculative to be used in an economic analysis except as allowed for by NI 43-101 in PEA studies. There is no guarantee that inferred mineral resources can be converted to indicated or measured mineral resources, and as such, there is no guarantee the project economics described herein will be achieved.
Table 1: PEA Summary (reported in US$)
| Total mineralized material mined (000 t) | 5,275 |
| Total waste (000 t) | 963 |
| Average grade (Au g/t) | 0.75 |
| Total gold contained (oz) | 126,995 |
| Total gold produced (oz) | 95,587 |
| Average Gold recovery (%) | 75% |
| Average annual gold produced (oz) | 31,040 |
| Total initial Capex (US$M) | $36.5 |
| Sustaining capital (US$M) | $0.4 |
| Unit Operating Cost (per tonne) | |
| Mining (US$/t) | $3.22 |
| Processing (US$/t) | $5.97 |
| General & administration (US$/t) | $1.93 |
| Refining, delivery, royalty (US$/t) | $1.64 |
| Total operating cost per tonne processed (US$/t) | $ 12.76 |
Table 2: Capital Cost Summary (US$ million)
| Capital Costs (US$M) | Pre-Production | Sustaining | Total |
| Mining | 1.84 | 0.43 | 2.27 |
| ADR Processing Plant | 11.84 | 11.84 | |
| Infrastructure | 12.86 | 12.86 | |
| EPCM, Indirects, Owners Costs | 5.18 | 5.18 | |
| Subtotal | 31.72 | 0.43 | 32.15 |
| Contingency | 4.76 | 4.76 | |
| Total Capital Costs | 36.48 | 0.43 | 36.90 |
| Closure and Rehabilitation | 3.40 |
Notes: Totals may differ due to rounding.
Table 3: Summary Economics at US$1,650 gold per oz (US$ million)
| LOM Net Smelter Return Revenue (US$M) | $150 |
| Total LOM Pre-Tax Cash Flow (US$M) | $90 |
| Average Annual Pre-Tax Cash Flow (US$M) | $29 |
| LOM Income Taxes (US$M) | $17 |
| Total LOM After-Tax Free Cash Flow after Capital Expenditures (US$M) | $34 |
| Average Annual After-Tax Free Cash Flow from Operations (US$M) | $23 |
| Discount Rate (%) | 5% |
| Pre-Tax 5% NPV (US$M) | $41 |
| Pre-Tax IRR | 50.3% |
| After-Tax 5% NPV (US$M) | $26 |
| After-Tax IRR | 34.9% |
| After-Tax Payback after start of production (Months) | 22 |
Table 4: All-In Sustaining Cost (US$million)
| Mining Cost (US$M) | $17.0 | |
| Processing Cost (US$M) | $31.5 | |
| General & Administrative (US$M) | $10.2 | |
| Refining & Smelting (US$M) | $0.8 | |
| Royalties (US$M) | $7.9 | |
| Adjusted Operating Costs | $67.3 | |
| Sustaining (US$M) | $0.4 | |
| Closure cost (US$M) | $3.4 | |
| Total (US$M) | $71.2 | |
| All-in Sustaining Cost (US$/oz) | $ 744 | |
| All-in Sustaining Costs are presented as defined by the World Gold Council less Corporate G&A | ||
Table 5: NPV & IRR Sensitivities (Base Case 1 in bold): 5% Discount Rate
| 75% | 80% | 85% | 90% | 95% | 100 % | 105% | 110% | 115% | 120% | 125% | ||||||||||||||||||||||||
|
Gold Price
|
NPV (US$M) | -$ | 0.1 | $ | 5.2 | $ | 10.5 | $ | 15.7 | $ | 21.0 | $ | 26.3 | $ | 31.6 | $ | 36.9 | $ | 42.2 | $ | 47.4 | $ | 52.7 | |||||||||||
| IRR | 4.9 | % | 11.2 | % | 17.4 | % | 23.4 | % | 29.2 | % | 34.9 | % | 40.5 | % | 46.0 | % | 51.4 | % | 56.8 | % | 62.0 | % | ||||||||||||
|
Operating Cost
|
NPV (US$M) | $ | 36.0 | $ | 34.1 | $ | 32.1 | $ | 30.2 | $ | 28.3 | $ | 26.3 | $ | 24.4 | $ | 22.4 | $ | 20.5 | $ | 18.5 | $ | 16.6 | |||||||||||
| IRR | 45.3 | % | 43.3 | % | 41.2 | % | 39.1 | % | 37.0 | % | 34.9 | % | 32.8 | % | 30.7 | % | 28.5 | % | 26.4 | % | 24.2 | % | ||||||||||||
|
Capital Cost
|
NPV (US$M) | $ | 35.5 | $ | 33.7 | $ |
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