- Pre-tax NPV (5% discount) of US$895 million and post-tax NPV of US$624 million for HEP Hybrid case at a US$1,600 gold price
- Using a US$1,760 gold price, post-tax NPV (5% discount) of US$879 million for HEP Hybrid case
- Average annual production of 303,000 ounces of gold over a 10.3 year life of mine within proposed pit shell
- Average total cash costs of US$852 per ounce over life of mine and AISC of US$950 per ounce for HEP Hybrid case
TORONTO, Dec. 15, 2021 (GLOBE NEWSWIRE) -- Loncor Gold Inc. (" Loncor " or the " Company ") (TSX: "LN"; OTCQX: "LONCF”; FSE: "LO51") is pleased to announce the results of the Preliminary Economic Assessment (“ PEA ”) for its Adumbi gold deposit within its 84.68%-owned Imbo Project in the Democratic Republic of the Congo (the “ DRC ”).
Project economics and financial analysis was undertaken on two power options at Adumbi: a Hydroelectric Power (“ HEP ”) Hybrid case and a Diesel Only case. The table below summarises the PEA results for the HEP Hybrid and Diesel Only cases:
| HEP HYBRID CASE | DIESEL ONLY CASE | ||||
| DESCRIPTION | Units | PRE-TAX | AFTER TAX | PRE-TAX | AFTER TAX |
| Life of Mine (“ LOM ”) Tonnage Ore Processed | t (000) | 49,771 | 49,771 | 49,771 | 49,771 |
| LOM Feed Grade Processed | g/t | 2.172 | 2.172 | 2.172 | 2.172 |
| Production Period | yrs | 10.3 | 10.3 | 10.3 | 10.3 |
| LOM Gold Recovery | % | 89.8% | 89.8% | 89.8% | 89.8% |
| LOM Gold Production | oz (000) | 3,121 | 3,121 | 3,121 | 3,121 |
| LOM Payable Gold After Refining Losses | oz (000) | 3,119 | 3,119 | 3,119 | 3,119 |
| Gold Price | US$/oz | 1,600 | 1,600 | 1,600 | 1,600 |
| Revenue | US$ million | 4,990 | 4,990 | 4,990 | 4,990 |
| Total Cash Costs | US$/oz | 852 | 852 | 908 | 908 |
| AISC | US$/oz | 950 | 950 | 1,040 | 1,040 |
| Preproduction Capital Costs | US$ million | 530 | 530 | 392 | 392 |
| Sustaining Capital Costs | US$ million | 305 | 305 | 411 | 411 |
| Net Present Value (“ NPV ”) (5% discount rate) | US$ million | 895 | 624 | 843 | 600 |
| IRR | % | 25.2% | 20.7% | 30.3% | 25.2% |
| Discount Rate | % | 5% | 5% | 5% | 5% |
| Payback Period-from start of production | Years | 4.16 | 4.98 | 3.16 | 4.06 |
| Project Net Cash | US$ million | 1,495.2 | 1,087.0 | 1,352.8 | 992.5 |
Note:
Total cash costs per payable ounce, AISC (All-in Sustaining-Costs) per payable ounce and project net cash are non-GAAP financial measures. Please see “Cautionary Note Concerning Non-GAAP Measures”. Total cash costs includes all on-site mining costs, processing costs, mine level G&A, refining and royalties. AISC includes all mining costs, processing costs, mine level G&A, royalties, refining, sustaining capital and closure costs. Project net cash is cash revenues less selling costs, less all mining costs, processing costs, mine level G&A, and royalties.
All financial figures in this press release are in United States dollars, unless otherwise noted.
The Adumbi PEA study was prepared for Loncor by a number of independent mining and engineering consultants led by New SENET (SENET), Johannesburg (Processing and Infrastructure) and Minecon Resources and Services Limited (Minecon), Accra (Mineral Resources, Mining and Environmental and Social) and Maelgwyn South Africa (MMSA), Johannesburg (Metallurgical test work), Knight Piésold and Senergy, Johannesburg (Power) and Epoch, Johannesburg (Tailings and Water Storage). SENET undertook the financial and economic evaluation.
Cautionary Statement:
The Adumbi PEA is preliminary in nature and includes Inferred Mineral Resources in the open pit outlines that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized
as Mineral Reserves. There is no certainty that all the conclusions reached in the Adumbi PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
Commenting on today’s Adumbi PEA study, Loncor’s President Peter Cowley said: “The results from the Adumbi PEA demonstrates a robust project with an average of +300,000 ounces of gold per annum over 10 years with low total cash costs and AISC costs of US$852 and US$950 per ounce respectively over the LOM for the HEP Hybrid power case.”
“There also remains significant upside potential at Adumbi and environs to increase mineral resources, gold production, reduce operating costs and further improve the economics of the project. Excellent exploration potential exists to further increase mineral resources at Adumbi, within the Imbo permit and other permits held by Loncor in the Ngayu greenstone belt. At Adumbi, the mineralized BIF host sequence increases in thickness below the open pit shell and wide spaced drilling has already intersected grades and thicknesses amenable to underground mining. Further drilling is required to initially outline a significant underground mineral resource which can then be combined with the open pit mineral resource so that studies can be undertaken for a combined open pit and underground mining scenario at Adumbi. Besides increasing the resource base, a combined open pit/underground project could increase grade throughput and reduce strip ratios with the higher grade, deeper mineral resources being mined by underground which could increase annual gold production and reduce operating costs.”
“Additional deposits and prospects occur close by to Adumbi and have the potential to add mineral resources and feed for the Adumbi mine operation. Along trend from Adumbi, the Manzako and Kitenge deposits have Inferred Mineral Resources of 313,000 ounces (1.68 million tonnes grading 5.80 g/t Au) and remain open along strike and at depth. Further along strike within the Imbo permit area, four priority prospects have been identified with similar host lithologies to Adumbi and will require drilling. Additional feed for the Adumbi processing plant could also come from Loncor’s 100%-owned high grade Makapela deposit where Indicated Mineral Resources of 2.20 million tonnes grading 8.66 g/t Au (614,200 ounces of gold) and Inferred Mineral Resources of 3.22 million tonnes grading 5.30 g/t Au (549,600 ounces of gold) have been outlined to date with the high grade material being able to be transported to Adumbi.”
“Other opportunities are being pursued to improve Adumbi’s economics. The Company is already in discussion with potential power suppliers with experience in the DRC to project finance and build a hydroelectric facility at Adumbi and then have an offtake agreement with Loncor to supply power for the operation. Any hydroelectric power scheme could also have the potential to obtain carbon credits.”
Imbo Project Containing the Adumbi Deposit
The Imbo Project which contains the Adumbi deposit is situated at the eastern end of the Ngayu Archean greenstone gold belt in the Ituri Province of northeastern DRC and is approximately 220 kilometres from Africa’s largest gold mine of Kibali, operated by Barrick Gold which in 2020 produced 808,134 ounces of gold.
This PEA was undertaken on the Adumbi deposit, which is the main gold deposit on the Company’s 122 square kilometre Imbo Project. Loncor has a 84.68% interest in the Imbo Project through its subsidiary Adumbi Mining S.A., with the minority shareholders holding 15.32% (including a 10% free carried interest held by the government of the DRC). The Imbo exploitation permit is valid until February 2039.
Drilling commenced on the Adumbi deposit in 2010 and to date 21,512 metres (74 core holes) have been drilled (see Figure 1 below). Gold mineralization at Adumbi is hosted in banded ironstone formation (BIF) and is similar to the gold mineralization host lithologies of the major Kibali and Geita mines in the DRC and Tanzania respectively. The main mineralized host lithologies at Adumbi are BIF within which is a more altered, higher sulfide RP (“replacement rock”) lithology. As at Kibali and Geita, significant underground mineral resource potential exists below the Adumbi pit shell where the gold mineralization is open at depth and where wide spaced drilling has already intersected significant widths and grades with the BIF sequence thickening at depth.
Figure 1: Adumbi Deposit Longitudinal Section Looking Northeast with Drill Hole Grade (g/t) x True Thickness (Metre) Product Contours
https://www.globenewswire.com/NewsRoom/AttachmentNg/74d970f8-01f4-41e1-bbfc-e3fec4637d25
Mineral Resources
The mineral resource assessment at Adumbi was undertaken by the Company’s independent geological consultants Minecon Resources and Services Limited (“ Minecon ”).
Table I below summarises the Adumbi indicated and inferred mineral resources based on in-situ block cut-off grade at a 0.52 g/t Au for Oxide, 0.57 g/t Au for Transition and 0.63 g/t Au for Fresh material and constrained within a US$1,600 per ounce optimized pit shell. 84.68% of the Adumbi mineral resources are attributable to Loncor via its 84.68% interest in the Imbo Project.
Table I: Adumbi Deposit Indicated and Inferred Mineral Resources
(effective date: November 17, 2021)
| Mineral Resource Category |
Tonnage
(Tonnes) |
Grade
(g/t Au) |
Contained Gold
(Ounces) |
| Indicated | 28,185,000 | 2.08 | 1,883,000 |
| Inferred | 20,828,000 | 2.65 | 1,777,000 |
Note: Numbers may not add up due to rounding.
Tables II below summarise the indicated and inferred category mineral resources in terms of material type.
Table II: Adumbi Mineral Resources by Material Type
(effective date: November 17, 2021)
| INDICATED MINERAL RESOURCE | INFERRED MINERAL RESOURCE | |||||
|
Material Type
|
Tonnage | Grade | Contained Gold | Tonnage | Grade | Contained Gold |
| (Tonnes) | (g/t Au) | (Ounces) | (Tonnes) | (g/t Au) | (Ounces) | |
| Oxide | 3,169,000 | 2.05 | 208,000 | 458,000 | 3.39 | 49,000 |
| Transitional | 3,401,000 | 2.51 | 274,000 | 280,000 | 2.74 | 24,000 |
| Fresh (Sulphide) | 21,614,000 | 2.02 | 1,400,000 | 20,089,000 | 2.64 | 1,703,000 |
| TOTAL | 28,185,000 | 2.08 | 1,883,000 | 20,828,000 | 2.65 | 1,777,000 |
Note: Numbers may not add up due to rounding.
Geological Modelling and Grade Estimation
The Adumbi 3-dimensional (“ 3-D ”) model was constructed by Minecon in collaboration with on-site geologists using cross sectional and horizontal flysch plans of the geology and mineralization and was used to assist in the constraining of the 3-D geological model. The mineralization model was constrained within a wireframe at 0.5 g/t Au cut-off grade. Grade interpolation was undertaken using:
- 2 metre sample composites capped at 18 g/t Au to improve the reliability of the block grade estimates.
- Ordinary Kriging to interpolate grades into the block model.
-
Relative densities of 2.45 for oxide, 2.82 for transitional and 3.05 for fresh rock were applied to the block model for tonnage estimation.
Pit Optimisation Parameters
To constrain the depth extent of the geological model and any mineral resources, an open pit for the Adumbi deposit was constructed based on the following pit optimisation parameters:
- A gold price of US$1,600 per ounce.
- Block size: 16 metres x 16 metres x 8 metres.
- A thirty-two metres minimum mining width and a maximum of four metres of internal waste was applied.
- Mining dilution of 100% of the tonnes at 95% of the grade.
- Ultimate slope angle of minus 45 degrees.
- Average mining cost of US$3.29/tonne mined.
- Metallurgical recoveries of 91% for oxide, 88% for transitional and 90% for fresh.
- Average general and administration cost of US$4.20/tonne.
- Mineral resources were estimated at a block cut-off grade of 0.52 g/t Au for oxide, 0.57 g/t Au for transition materials and 0.63 g/t Au for fresh material constrained by a US$1,600 per ounce optimized pit shell.
- Transport of gold and refining costs equivalent to 4.5% of the gold price.
-
No additional studies on depletion by artisanal activity was undertaken since the RPA study of 2014 and the same total amount of material was used by Minecon.
Tonnage/Grade Curve
Grade/tonnage curves for the Adumbi mineral resources at various gold cut-offs are summarised in Table III and the graph below:
Table III:
| Block Cut-off | Tonnage | Grade | Contained Au |
| g/t Au | million tonnes | g/t Au | million ounces |
| 0.0 | 51.60 | 2.23 | 3.70 |
| 0.5 | 50.10 | 2.29 | 3.68 |
| 1.0 | 41.15 | 2.61 | 3.45 |
| 1.5 | 29.07 | 3.17 | 2.97 |
| 2.0 | 21.76 | 3.66 | 2.56 |
| 2.5 | 16.06 | 4.17 | 2.15 |
| 3.0 | 12.12 | 4.63 | 1.80 |
A graph accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/e102869e-00d7-4db7-baa9-25bbfb0c1149
Mining
The Adumbi deposit is planned to be mined by conventional, contract, open pit mining using truck and shovel mining fleet with drill and blasting for all material types. Mining costs were broken down into reference and incremental mining costs and were estimated from first principles using knowledge of recent mining contracts operating in similar gold mining operations in Africa. For the PEA, both Inferred and Indicated Mineral Resources were included in the material to be mined. Mining is planned to be carried out by a contractor on a cost per tonne basis utilising a mining fleet consisting of 140 tonne rigid haul trucks with 8 cubic meter excavators.
Figure II: Adumbi Open Pit Design
https://www.globenewswire.com/NewsRoom/AttachmentNg/a1b785a5-3c30-46ec-acd5-f154a07228a1
Table IV below summarises the mining, processing and gold production schedules over Adumbi’s LOM.
Table IV:
Mining, Processing and Gold Production Schedules over Adumbi’s LOM
https://www.globenewswire.com/NewsRoom/AttachmentNg/9c394b09-1b2c-4dfe-ab55-e45e3f1d5865
Processing
Metallurgical Testwork
Preliminary Economic Assessment level metallurgical testwork (comminution and gold recovery) was performed by Maelgwyn Mineral Services Laboratory on the Adumbi ore to evaluate the process route required to treat the ore and to obtain gold recoveries that can be achieved.
Table V below shows a summary of the PEA Adumbi metallurgical testwork results.
Table V: Adumbi Metallurgical Testwork Results
| Parameters | Units | Oxides | Transition |
×
| |||