Canada NewsWire
VANCOUVER, BC , Feb. 14, 2022 /CNW/ - Montage Gold Corp. ("Montage" or the "Company") (TSXV: MAU) (OTCPK: MAUTF) is pleased to announce the results of the Definitive Feasibility Study (the "DFS" or the "Study") for the Koné Gold Project ("Koné Gold Project", "Project", or "KGP") in Côte d'Ivoire. The DFS was prepared by Lycopodium Minerals Pty Ltd. in accordance with Canadian Securities Administrators' National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). Please note that all financial figures in this press release are in United States dollars, unless otherwise noted.
HIGHLIGHTS
- Significant Gold Reserves and Production – A Strategic Asset in Côte d'Ivoire
- 3.42Moz of Probable Mineral Reserves
- 3.06Moz of gold produced over a 14.8-year Life-of-Mine ("LOM")
- Average annual gold production of 257koz in first 9 years; 207koz/year LOM
-
Peak production 320koz in year 2
- Strong Financial Metrics with Improved Capital Efficiency
- $746M after-tax NPV 5% and 35% IRR at base case $1,600 gold price
- $1,043M after-tax NPV 5% and 47% IRR at $1,800 gold price
- LOM AISC 1 of $933 /payable oz
- All production from open pits with LOM strip ratio of 0.90:1
-
Pre-production capital requirement of
$544M
- Optimizations Improve Economics and Streamline Operations
- $153M reduction in sustaining capital vs. PEA
- 40% reduction in TSF surface area
-
No road diversion
- Moving Forward to Unlock Value
- Permitting process well underway; all requisite approvals expected in Q3 2022
- Project financing process to commence soon
- Aggressive satellite pit exploration ongoing
- Well-funded with ~C$10M for permitting and exploration
Hugh Stuart , Montage CEO commented ,
"The completion of the DFS for the Koné Gold Project is a tremendous milestone for Montage and is demonstrative of the hard work, dedication and expertise of our team. In the 15 months since our IPO, we have transformed Montage from an exploration company with a 1.5Moz Inferred Mineral Resource, into a development company with Probable Reserves of over 3.4Moz with anticipated average gold production of 257koz/year in the first 9 years, peaking at 320koz.
"We are clearly extremely pleased at how well the DFS compares to the May 2021 Preliminary Economic Assessment ("PEA"), with nearly all metrics improving, under the same base case gold price of $1,600 /oz. Critical to these improvements are the numerous optimizations that were undertaken as part of the feasibility process, the most significant of which is the change in tailings management which has reduced our sustaining capital requirements by $146 million . We have also optimized the front-end of the mill through the use of High-Pressure Grinding Rolls instead of a SAG Mill, driving a 19% reduction in unit power requirements, a direct benefit to the operating cost profile. In addition, we have revised the mine plan to avoid diverting the newly asphalted road without any material impact to the production profile of the project.
"We will continue to move forward advancing the KGP to add value. We plan to engage project finance advisors in the near-term to solicit the market for capital for construction finance. Discussions thus far show strong support for the project from numerous potential funding partners, and we are excited to start that process. Permitting efforts continue and we are on pace to submit the ESIA at the end of this month to begin the government review process. Our balance sheet remains strong, with available liquidity of approximately C$10 million , which will provide us ample budget for regional exploration and the permitting process."
Summary operating and financial metrics from the DFS are presented in Table 1 below along with a comparison to the PEA. A summary model with annual projections over the project life has been included as Appendix 1 to this release.
Table 1 – DFS Summary Metrics
|
Metrics |
Units |
DFS |
PEA |
|
Pit Optimization Gold Price Assumption |
$/oz |
$1,250 |
$1,250 |
|
Financial Model Base Case Gold Price |
$/oz |
$1,600 |
$1,600 |
|
Life of Mine |
years |
14.8 |
14.7 |
|
Total Mineralized Material Mined |
Mt |
161.1 |
161.1 |
|
Contained Gold |
Moz |
3.42 |
3.37 |
|
Strip Ratio |
w:o |
0.90:1 |
0.93:1 |
|
Annual Mining Rate |
Mtpa |
35.0 |
35.0 |
|
Annual Milling Rate (Mill Throughput) |
Mtpa |
11.0 |
11.0 |
|
Average Head Grade, first 3 years |
Au g/t |
0.93 |
0.94 |
|
Average Head Grade, first 9 Years |
Au g/t |
0.82 |
0.79 |
|
Average Head Grade, LOM |
Au g/t |
0.66 |
0.65 |
|
Processing Recovery, first 3 Years |
% |
91.1% |
91.2% |
|
Processing Recovery, first 9 Years |
% |
90.2% |
90.2% |
|
Processing Recovery, LOM |
% |
89.3% |
89.4% |
|
Total Gold Production, LOM |
Moz |
3.06 |
3.01 |
|
Average Gold Production, first 3 years |
koz/yr |
285 |
294 |
|
Average Gold Production, first 9 years |
koz/yr |
257 |
249 |
|
Average Gold Production, LOM |
koz/yr |
207 |
205 |
|
Mining Cost Per Tonne Mined, LOM |
$/t, mined |
$2.73 |
$2.90 |
|
Processing Cost, LOM (including rehandle) |
$/t, processed |
$8.04 |
$7.20 |
|
G&A, LOM |
$/t, processed |
$0.93 |
$0.86 |
|
Royalties, LOM |
$/t, processed |
$1.97 |
$1.93 |
|
Total Cash Costs 1 , LOM |
$/t, processed |
$15.89 |
$15.39 |
|
Average AISC 1 , LOM |
$/payable oz |
$933 |
$975 |
|
Initial Capital Expenditure (including contingency) |
$M |
$543.9 |
$489.9 |
|
Sustaining Capital (incl. Closure) |
$M |
$291.7 |
$444.9 |
|
NPV 5% , pre-tax (100%) |
$M |
$991.7 |
$928.7 |
|
Pre-tax IRR |
% |
39.6% |
45.1% |
|
NPV 5% , after-tax (100%) |
$M |
$746.2 |
$652.2 |
|
After-tax IRR |
% |
34.8% |
30.9% |
|
Payback Period |
years |
2.7 |
2.8 |
DETAILS
Koné Gold Project Overview
The Koné Gold Project is located approximately 590km north-west of Abidjan (Figure 1), the commercial capital of Côte d'Ivoire. The Project comprises two exploration permits (PR262 and PR748) covering 662km 2 , a third exploration permit pending documentation (382km 2 ), and two applications covering a further 398km 2 all within trucking distance of Koné (Figure 1).
The communities of Fadiadougou and Batogo lie 5km east and west respectively of the resource area with the nearest major centre at Séguéla, 80km to the south. The Project area is accessible year-round with an asphalt highway within 500m of the proposed plant location.
The Project area is largely devoid of habitation with subsistence farming and cashew plantations the dominant land use.
Figure 1: Location of Koné Gold Project
http://www.montagegoldcorp.com/_resources/news/2022/~Images/2022-02-14/Figure1.png
Mineral Resources and Reserves Estimates
Mineral Resources were estimated for the Koné deposit by Multiple Indicator Kriging ("MIK") by MPR Geological Consultants Pty Ltd. Based on 102,249m drilling completed up to July 31, 2021 . Table 2 shows the Indicated and Inferred Mineral Resource estimates at a range of cut-off grades reported within an optimal pit shell generated at a gold price of $1,500 /oz.
Table 2 – Mineral Resource Estimate
|
Cut-off Grade |
Indicated |
Inferred |
||||
|
Au g/t |
Mt |
Au g/t |
Au Moz |
Mt |
Au g/t |
Au Moz |
|
0.1 |
278 |
0.51 |
4.56 |
32 |
0.35 |
0.36 |
|
0.2 |
225 |
0.59 |
4.27 |
22 |
0.45 |
0.32 |
|
0.3 |
168 |
0.70 |
3.78 |
14 |
0.56 |
0.25 |
|
0.4 |
128 |
0.82 |
3.37 |
9.0 |
0.69 |
0.20 |
|
0.5 |
99.1 |
0.92 |
2.93 |
5.9 |
0.81 |
0.16 |
|
0.6 |
76.9 |
1.03 |
2.55 |
3.9 |
0.95 |
0.12 |
|
0.7 |
59.9 |
1.14 |
2.20 |
3.2 |
1.1 |
0.10 |
|
0.8 |
46.8 |
1.25 |
1.88 |
1.9 |
1.2 |
0.07 |
|
Notes |
|
|
|
|
|
1. |
Indicated Mineral Resources and Inferred Mineral Resources are reported in accordance with NI 43-101 with an effective date of August 12, 2021, for the Koné deposit within the KGP. |
|
2. |
The updated mineral resource estimate is reported on a 100% basis and is constrained within an optimal pit shell generated at a gold price of US$1,500/ounce. |
|
3. |
The identified Mineral Resources are classified according to the "CIM" definitions of Indicated Mineral Resources and Inferred Mineral Resources. |
|
4. |
The updated mineral resource estimate was prepared by Mr. Jonathon Abbott of MPR Geological Consultants of Perth, Australia who is a Qualified Person as defined by NI 43-101. |
|
5. |
The estimates at 0.2g/t cut-off grade represent the base case or preferred scenario. |
|
6. |
Mineral Resources are reported inclusive of Mineral Reserves. |
|
7. |
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. |
|
8. |
The estimates may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. Please see "Forward Looking Statements" below and the technical report for the Koné Gold Project that will be prepared in accordance with National Instrument 43-101 and filed on SEDAR. |
The maiden Mineral Reserve estimate was prepared by Carci Mining Consultants Ltd., dated as of February 14, 2022 , and is presented below in Table 3. Only Probable Reserves have been incorporated into the mine plan and economic analysis.
Table 3 – Open Pit Mineral Reserve Estimate
|
|
|
Oxide |
Transition |
Fresh |
Total |
||||||||
|
|
Classification |
Mt |
Au g/t |
Au Moz |
Mt |
Au g/t |
Au Moz |
Mt |
Au g/t |
Au Moz |
Mt |
Au g/t |
Au Moz |
|
South
|
Probable |
9.8 |
0.57 |
0.18 |
7.9 |
0.56 |
0.14 |
141.4 |
0.67 |
3.05 |
159.1 |
0.66 |
3.39 |
|
North
|
Probable |
0.9 |
0.47 |
0.01 |
0.4 |
0.46 |
0.01 |
0.6 |
0.57 |
0.01 |
1.9 |
0.50 |
0.03 |
|
Total |
Probable |
10.7 |
0.56 |
0.19 |
8.3 |
0.56 |
0.15 |
142.1 |
0.67 |
3.06 |
161.1
×
| ||