VANCOUVER, British Columbia, Feb. 24, 2022 (GLOBE NEWSWIRE) --
Eldorado Gold Corporation
(“Eldorado”, the “Company” or “We”)
(TSX: ELD) (NYSE: EGO)
is pleased to announce the results of a new Technical Study (the “Study”) on its wholly-owned Lamaque Project, located in Val d’Or, Quebec. The Lamaque Project is comprised of three separate but contiguous properties: Lamaque South (containing the Upper Triangle zones, Lower Triangle zones, and the deposits of Parallel and Ormaque), Sigma-Lamaque and Aumaque (see Figures 1 and 2). The Upper Triangle zones within Lamaque South are currently being mined with access by surface ramp. The Study includes an update to the current operation, updated economics on the Upper Triangle zones (zones C1 through C5), as well as preliminary economic assessments on the inferred resources in the Lower Triangle zones (zones C6 through C10) and the Ormaque deposit.
Key Highlights
-
Base case economics using a gold price assumption of $1,500 per ounce:
- Upper Triangle Reserves NPV 5% 1 of $459 million
- Lower Triangle Inferred Resource NPV 5% of $162 million and IRR 2 ,3 of 33%
- Ormaque Inferred Resources NPV 5% of $197 million and IRR 39% 2,4
-
Upside economics using spot gold price assumption of $1,900 per ounce:
- Upper Triangle Reserves NPV 5% of $673 million
- Lower Triangle Inferred Resource NPV 5% of $295 million and IRR of 48%
- Ormaque Inferred Resources NPV 5 % of $285 million and IRR 45%
- Key growth opportunities: High-grade inferred resources (Lower Triangle zones and Ormaque deposit) provide potential for significant production increases and opportunities for resource expansion. Based on successful conversion of inferred resources at Lower Triangle and Ormaque, mining would commence in these areas in 2026. With multiple concurrent centers of production, this represents a de-risked approach to extending the production profile at Lamaque.
- Increased gold production to over 190,000 ounces per year based on the Upper Triangle reserves; and sustaining over 180,000 ounces per year with production from Lower Triangle Inferred and Ormaque inferred resources.
- Extended mine life with ~5.5 years of production from Upper Triangle reserves, and potential for an additional ~8.5 years of mine life from Lower Triangle and Ormaque inferred resources.
- Well-positioned in the prolific Abitibi Greenstone Belt: In 2021, Eldorado expanded its land position by over 500% with the acquisition of QMX Gold (referred to as the Bourlamaque property), which is in close proximity to the Lamaque Project.
- Readily equipped : Robust surface infrastructure is already in place at the Triangle mine. To support current operations and continue mining the Upper Triangle Reserves, additional infrastructure is required on the Sigma tailings, and the mine dewatering systems.
- Permitting advancing and in compliance : The Lamaque Project is fully permitted under Federal and Provincial regulations. The project is in compliance regarding environmental quality and is regularly assessed by Provincial authorities in accordance with the Environmental Quality Act (“EQA”) of Quebec. Discussions with Provincial Ministries about making changes to the existing permits have commenced with Provincial Ministries and are expected to be a normal course.
-
Strong collaboration
and support from the Val-d’Or communities and a transparent and predictable regulatory environment makes Quebec a world-class mining jurisdiction.
1 After-tax net present value at a discount rate of 5%. 2 After-tax internal rate of return. 3 NPV and IRR for Lower Triangle is calculated on the differential after-tax cash flow between the Lower Triangle + Upper Triangle (B) and the standalone Upper Triangle case (A). 4 NPV and IRR for Ormaque is calculated on the differential after-tax cash flow between the Ormaque + Lower Triangle + Upper Triangle (C) and (B).
“The Lamaque Project has been an outstanding acquisition for Eldorado Gold,” said George Burns, Eldorado’s President and CEO. “We acquired the asset for approximately $360 million in 2017, published a PFS in 2018, and reached commercial production 12-months later. Since then, we have demonstrated a track record of success by replacing reserves year-over-year and exceeding peak production levels beyond the 2018 Pre-Feasibility Study. Additionally, we have more than doubled the inferred resource base since the acquisition. The results of the Technical Study showcase the growing value of Lamaque and the significant upside potential from the Lower Triangle zones and Ormaque deposit.”
“With the Triangle-Sigma decline project now complete, we are focused on an exploration drift and resource conversion at Ormaque,” adds Burns. “Our 2022 exploration strategy is also focused on resource expansion at Ormaque and in the Upper and Lower Triangle zones and testing new targets within our expanded license area to support continued growth at Lamaque. Furthermore, our strategic positioning in the Abitibi region gives us additional exposure to the potential upside in the resource-rich area. We have a safe, successful track record of project execution and project delivery, which is a testament to our team. We are fortunate to have a dedicated and experienced workforce whose commitment to project delivery has been unwavering. Our strategic position in the region and our strong, collaborative local relationships will allow us to continue to drive sustainable, long-term benefits for the community in Val-d’Or, and continue to deliver value for our shareholders.”
Technical Study Highlights 1
As outlined in the table below, results from the Technical Study present the mining of three separate zones:
- Feasibility-level update to the current operation centered on the Mineral Reserves in the Upper Triangle zones and Parallel deposit;
- Preliminary economic assessment (“PEA”) of Inferred Resources from the Lower Triangle zones; and
-
PEA of Inferred Resources from the Ormaque deposit.
| 2022 Technical Study | |||
| Reserves Case | Preliminary Economic Assessments 1 | ||
| Upper Triangle | Lower Triangle Inferred Resources Case | Ormaque Inferred Resources Case | |
| Production | |||
| Life of Mine (LOM) |
~5.5 years
remaining LOM |
~4.5 years potential LOM extension |
~3.5 years
potential LOM extension |
| Average Annual Gold Production over LOM (oz) | 187,000 | 180,000 | 181,000 |
| Average Annual Mill Feed (ktpa) | 825 | 846 | 872 |
| Incremental | Incremental | ||
| Average Gold Grade (g/t) | 7.3 | 6.4 | 6.9 |
| Recovery (%) | 96.5 | 95.0 | 96.5 |
| Operating Costs 3 | Incremental | Incremental | |
| Annual Average Cost ($M) | 111.9 | 113.3 | 122.6 |
| Average cost ($/tonne ore) | 136 | 129 | 143 |
| Average cost ($/oz Au) | 597 | 656 | 670 |
| Capital Costs | Incremental | Incremental | |
| Growth Capital ($M) | 70 | 86 | 20 |
| Sustaining Capital ($M) | 230 | 239 | 88 |
| Total Capital ($M) | 300 | 325 | 108 |
| Economic Analysis | Incremental | Incremental | |
| NPV @ 5% discount rate ($M) | 459 | 162 | 197 |
| IRR (%) | n.a. 2 | 33 | 39 |
| Gold price assumption ($/oz) | 1,500 | 1,500 | 1,500 |
1
The Inferred Resources Cases are PEAs. As the PEAs supporting the Ormaque Inferred Resources and the Lower Triangle Inferred Resources consider the potential economic viability of developing the separate satellite deposit that comprises the Ormaque Inferred Resources and the separate zones that comprise the Lower Triangle Inferred Resources in conjunction with the main zones of the Upper Triangle Reserves development project, these PEAs will not impact the results of the economic/financial assessment of the Upper Triangle Reserves.
2
The project’s cashflow remains positive in each year, as such there is no calculated internal rate of return or payback period. Capital expenditures are part of ongoing operational development and are funded by ongoing gold sales and there are no external funding requirements.
3
These measures are non-IFRS measures. See the section ‘Non-IFRS Measures’ at the end of this press release and in Eldorado’s December 31, 2020 MD&A for explanations and discussion of these non-IFRS measures.
The PEAs of Inferred Resources from the Lower Triangle zones and the Ormaque deposit are distinct from and do not affect the feasibility-level update to the current operations on the Mineral Reserves in the Upper Triangle zones and Parallel deposit.
Review of Operations
Eldorado owns the Lamaque Project in Quebec, Canada through its wholly-owned subsidiary, Eldorado Gold Québec. The deposits at Lamaque are currently, and will continue to be, mined by underground methods. In 2022, over 815,000 tonnes of ore at an average gold grade of 6.75 grams per tonne are expected to be mined and processed from the Upper Triangle zones. 2022 cash operating costs per ounce 1 of $620 to $670 reflect increased mining and processing costs due to higher throughput and cost inflation.
1 Cash operating costs per ounce is a non-IFRS measure. Certain additional disclosures for non-IFRS measures have been incorporated by reference and additional detail can be found at the end of this press release and in the section ‘Non-IFRS Measures’ of Eldorado’s December 31, 2020 MD&A.
Property Description
The Lamaque Project is situated near the city of Val-d’Or in the province of Québec, Canada, approximately 550 km northwest of Montréal. Val-d’Or has been a highly active mining area for a century, with significant mineral deposits found throughout the region. Gold has been produced from the historic Sigma and Lamaque mines starting in the early 1930s. More recently, Eldorado acquired the Lamaque Project through the purchase of Integra Gold Corp in 2017. Eldorado achieved commercial production on March 31, 2019, from ore mined at the Upper Triangle zones and processed at the refurbished Sigma mill.
Since the acquisition of Integra Gold Corp. by Eldorado in 2017, significant exploration activities have been conducted at both Upper Triangle and Lower Triangle zones as well as other deposits and targets including Plug #4, Parallel, Aumaque, South Gabbro, Lamaque Deep, Vein #6, P5 Gap, Sigma East Extension and Sector Nord. In January 2020, Eldorado announced the discovery of the Ormaque deposit. Eldorado continues to explore the Lamaque property and adjacent Bourlamaque property extensively.
Figure 1: Location of the Lamaque Project with respect to the City of Val-d’Or is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/cbd0be36-99ca-41d3-867f-f91cc20f8f74
Figure 2: Long-section of the Lamaque Project is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/2e4c57ef-bac8-48b2-95e2-397af96acd15
Review of Economic Analysis 1
The Upper Triangle Reserves NPV 5 % of $459 million, based on $1,500 per ounce gold, has increased significantly over the 2018 Pre-Feasibility Study (“PFS”). The Upper Triangle Reserves feasibility-level economic analysis includes Reserves from the Parallel deposit.
Separately, the PEA for the Lower Triangle Inferred Resource, based on $1,500 per ounce gold, supports an additional NPV 5 % of $162 million.
Separately, the PEA for the Ormaque Inferred Resource, based on $1,500 per ounce gold, indicates an additional NPV 5 % of $197 million.
The economic models were subjected to sensitivity analyses to determine the effects of changing metal prices, capital, and operating expenditures on financial returns. This analysis showed that the project economics are robust and are most sensitive to metal prices.
Reserve Case and Inferred Resource Cases After-Tax NPV (5%) and IRR Sensitivity
| Sensitivity Table – Gold Price | |||||
| Reserves Case | Inferred Resources Case | ||||
| Upper Triangle | Lower Triangle | Ormaque | |||
|
Gold Price
($/oz) |
After-Tax NPV ($M) | After Tax NPV ($M) |
IRR
(%) |
After Tax NPV ($M) |
IRR
(%) |
| $1,300 | 318 | 81 | 21 | 137 | 31 |
| $1,500 (base case) | 459 | 162 | 33 | 197 | 39 |
| $1,900 (spot) | 673 | 295 | 48 | 285 | 45 |
| $2,000 | 722 | 328 | 51 | 307 | 47 |
The PEAs supporting the Lower Triangle Inferred Resource and the Ormaque Inferred Resource, consider the potential economic viability of developing the separate zones that comprise the Lower Triangle Inferred Resource and the separate satellite deposit that comprises the Ormaque Inferred Resource in conjunction with the main zones of the Upper Triangle Reserves development project.
1 See “Notes on Lower Triangle Inferred and Ormaque Inferred PEAs” below.
Capital Costs
As outlined in the table below, the initial growth capital required for both the reserves and inferred cases is modest.
| Preliminary Economic Assessments | |||
| Reserves Case | Inferred Resources Case | ||
| Upper Triangle | Lower Triangle | Ormaque | |
| Growth Capital ($M) | 70 | 86 | 20 |
| Sustaining Capital ($M) | 226 | 243 | 88 |
| Total Capital ($M) | 296 | 329 | 108 |
Operating Costs 1
The table below provides the operating costs for the Upper Triangle Reserves Case and the Lower Triangle Inferred Case and the Ormaque Inferred Case. The operating costs estimate for the Upper Triangle Reserves Case average $136 per tonne ore, the incremental Lower Triangle Inferred Resources Case average $129 per tonne mineralized material, and the incremental Ormaque Inferred Case averages $143 per tonne ore. The operating cost estimates include mining, processing, and general and administrative costs.
| Preliminary Economic Assessments | |||
| Reserves Case | Inferred Resources Case | ||
| Upper Triangle | Lower Triangle | Ormaque | |
| Annual Average Cost ($M) | 112 | 113 | 123 |
| Average cost ($/tonne ore) | 136 | 129 | 143 |
| Average cost ($/oz Au) | 597 | 656 | 670 |
| All-in Sustaining Cost | 829 | 979 | 819 |
1 These measures are non-IFRS measures. See the section ‘Non-IFRS Measures’ at the end of this press release and in Eldorado’s December 31, 2020 MD&A for explanations and discussion of these non-IFRS measures.
Optimization and Future Opportunity
As part of an overall growth strategy in the Abitibi area, Eldorado continues to evaluate exploration and development opportunities for high-grade ore that could be mined and trucked to the Sigma mill as well as bulk mining opportunities that would entail upgrading the Sigma mill to its permitted capacity of 5,000 tonnes per day.
Another area for opportunity highlighted in the Technical Study was the use of alternate materials handling technologies for the Lower Triangle zones. Materials handling trade-off studies at a PEA level indicate a potential for reducing costs, reducing equipment and ventilation requirements, while at the same time reducing greenhouse gas emissions. Further studies will be carried out to increase the level of confidence in the costs and benefits of technologies evaluated, which include vertical conveyors, conventional conveying, or the use of battery electric vehicle trucks.
Geology and Mineralization
There are three deposits: i) Triangle, consisting of zones C1 through C5 in Upper Triangle, and C6 through C10 in Lower Triangle, ii) Parallel and iii) Ormaque. Gold mineralization in the Triangle, Parallel and Ormaque deposits occurs primarily within quartz-tourmaline-carbonate-pyrite shear and extension veins. At Triangle, most of the deposit is contained within a series of shear veins (C1-C10) emplaced along steeply south-dipping reverse shear zones. The ore zones are localized where the shear zones cut across the subvertical Triangle Plug, but extend into the adjacent mafic lapilli-blocks tuffs as well.
The Parallel and Ormaque deposits are located two kilometers northwest of the Triangle mine portal, adjacent to the Triangle-Sigma decline. Mineralized veins in both are hosted within fine- to medium-grained C-porphyry diorite. Ormaque is dominated by gently south-dipping extension veins and minor breccia zones, localized adjacent to sub-vertical shear zones. At Parallel, mineralized zones consist of gently-dipping extension veins in the upper part of the deposit and more steeply-dipping shear-hosted veins at deeper levels.
Infrastructure
Through its existing infrastructure, the Lamaque Project is readily equipped to support all planned operations. The Triangle mine site infrastructure includes offices, dry storage, truck shop, warehouse, ventilation facilities, waste rock stockpile, slurry plant, cement silo, and fuel station. The Sigma Mill site includes a processing plant, covered ore storage, crushing facility and a warehouse. Support infrastructure also includes administration, construction, and exploration offices, as well as a core yard.
The site has its own water management and collection ponds. The existing power line connecting the Sigma Mill to the Triangle mine is designed to accommodate current as well as foreseeable future operations.
Environment and Permitting
The Triangle mine at the Lamaque Project is an operating mine and is fully permitted under Federal and Provincial regulations. The asset is in compliance regarding environmental quality and is regularly assessed by Provincial authorities regarding EQA of Québec. Mineralized material in Lower Triangle is fully permitted under existing certificates of authorizations (“CoA”).
There is an existing CoA for mining in the Ormaque deposit, but this will require an amendment to allow for mining below a depth of 453 meters. There are no indications that the project will be unsuccessful in obtaining a permit amendment.
Reclamation costs for the Lamaque Project were evaluated at $10 million based on recent assessments and a full review of the closure plan is scheduled in 2023.
Mineral Resources Estimate
The table below provides the Mineral Resource Estimate for the Lamaque Project as of September 30, 2021. The Mineral Resources were classified using logic consistent with the CIM Definition Standards for Mineral Resources and Mineral Reserves referred to in National Instrument 43-101. The mineralization of the project satisfies sufficient criteria to be classified into measured, indicated, and inferred mineral resource categories.
Mineral Resources, as of September 30, 2021 1
| Deposit/Zone | Categories |
Tonnes
(x 1,000) |
Grade Au
(g/t) |
Contained Au
(oz x 1,000) |
|
Upper Triangle
|
Measured | 876 | 9.49 | 267 |
| Indicated | 5,316 | 8.51 | 1,453 | |
| Measured + Indicated | 6,191 | 8.65 | 1,721 | |
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