SONORO ANNOUNCES POSITIVE UPDATED PEA RESULTS INCREASING PRE-TAX NPV TO USD $84.4 MILLION AND PRE-TAX IRR TO 74.9%

Date/time : 2022-05-09 08:14 AM
Symbol :

SGO

Company : Sonoro Gold Corp.
Price : 0.150
Market cap : 17,889,039
O/S : 119,260,260
Exchange :

TSXV

Industry :

Other Precious Metals & Mining

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SONORO ANNOUNCES POSITIVE UPDATED PEA RESULTS INCREASING PRE-TAX NPV TO USD $84.4 MILLION AND PRE-TAX IRR TO 74.9%

VANCOUVER, Canada, May 09, 2022 (GLOBE NEWSWIRE) -- Sonoro Gold Corp. (TSXV: SGO | OTCQB: SMOFF | FRA: 23SP) (“Sonoro” or the “Company”) is pleased to announce the positive results of an updated independent Preliminary Economic Assessment (“PEA”) on the Company’s Cerro Caliche gold project located in Sonora State, Mexico. The updated PEA highlights several opportunities to potentially increase the project’s previously reported economic parameters, as well as potentially lower several identified risks. As the engineering and costing outlined in both the initial and updated studies are at the PEA level, potential variations in operation and capital costs may occur.

Based on the same mineral resource estimate contained in the Company’s initial PEA, dated October 29, 2021, the updated PEA contemplates an optimized mine plan for an open pit, heap leach mining operation with an initial two-year production rate of 8,000 metric tonnes per day (“mtpd”) and an increase to 15,000 mtpd for the remaining life of mine (“LOM”).

The updated PEA has been prepared in accordance with the requirements of National Instrument 43-101 (“NI 43-101”) by D.E.N.M. Engineering Ltd. of Burlington, Ontario (“D.E.N.M.”), with confirmation of the applicable resource estimates completed by Micon International Limited of Toronto, Ontario (“Micon”).

Updated PEA Highlights :

  • Pre-Tax net present value discounted at 5% (“NPV 5 ”) of USD $84.4 million
  • Pre-Tax Internal Rate of Return (“IRR”) of 74.9%
  • After-Tax NPV 5 of USD $53.5 million with an IRR of 45.6%
  • Gold recovery of 74% and silver recovery of 27%
  • 7-year LOM with 344,500 ounces (“oz”) of gold equivalent (“AuEq”)
  • LOM annual average production of 45,000 oz AuEq (Years 1-7)
  • Years 1 to 3 annual production of 46,000 oz AuEq at 0.58 g/t AuEq
  • Initial CAPEX costs of USD $26 million, including USD $3 million in contingency
  • Sustaining capital costs of USD $7.4 million
  • Cash ( 1) costs of USD $1,206/oz AuEq
  • AISC ( 2 ) of USD $1,333/oz AuEq
  • Payback period of 2.2 years

Note: All currencies are reported in U.S. dollars. Base case parameters assume $1,750/oz of gold and $22/oz of silver .
(1) Cash costs include mining , crushing , processing , assaying , and administration .
( 2 ) All - in - Sustaining Costs include cash costs plus sustaining, refining and reclamation costs , as well as 2% royalties.

Ken MacLeod, President and CEO of Sonoro, stated, “We are very pleased with the improved economic parameters of the updated PEA. Using the same resource calculations of the original PEA, we have optimized the mine plan to contemplate commencing production at a lower rate utilizing higher-grade ore, eventually ramping up to potential capacity of 15,000 m tpd in year three. The result is a reduction in the estimated initial CAPEX of over 19% and an increase in after - tax NPV and IRR of 29% and 40.4% , respectively.”

John Darch, Chairman of Sonoro, added, The updated PEA again highlights the intrinsic value of the Cerro Caliche project , and we continu e to ass ess options to potentially further improve the project’s economic viability, such as leasing large capital cost equipment. The updated PEA does not include the nearly completed drilling campaign , which commenced in November 2021 after the initial PEA was published . We are excited to review the potential for resource growth from the new geological data. An increase in the size and grade of the resource may potentially further improve the project’s economics and extend the proposed life of mine.”

Mineral Resource Estimate
The updated PEA utilizes the same geological data as the initial PEA, filed in October 2021, and is based on the Company’s September 2018 to April 2021 drilling campaigns. As previously announced, the PEA estimates Measured and Indicated Mineral Resources of 349,000 ounces of gold at a 0.41 g/t Au grade and Inferred Mineral Resources of 71,000 ounces of gold at 0.40 g/t Au grade. The original report also notes a range of the potential mineralization that may conceptually exist outside of the resource pit shells believed to be from 19,250,000 to 34,370,000 tonnes containing 204,000 to 365,000 ounces of gold, as well as 1,683,000 to 3,005,000 ounces of silver.

Readers are cautioned that these potential mineralization ranges are conceptual in nature and that despite being based on a limited amount of exploration drilling and sampling outside the current resource pit shells, it is uncertain that further exploration will result in the mineralization targets being delineated as a mineral resource.

Drilling Data
Approximately 7,000 meters of additional drilling being completed at Cerro Caliche was not included in the current mineral resource estimate. Final assay results are still pending with the new geological data to be included in a further updated resource estimate scheduled to be released in the fall of 2022.

Since drilling resumed in November 2021, the Company has announced multiple high-grade intercepts and expansions of several known mineralized zones in the southwestern region of the property. The potential economic impact of these results on the proposed mining operation will also be assessed in the updated resource estimate.

PEA Summary
The optimized mine plan outlined in the updated PEA increased total tonnes processed from 31.5 million tonnes to 32.2 million tonnes and total waste from 65.5 million tonnes to 66.8 million tonnes. Optimization also increased the average gold grade from 0.41 g/t Au to 0.43 g/t Au for the LOM, as well as the average gold equivalent from 0.51 g/t AuEq to 0.58 g/t AuEq during the first three years of production.

Total recovered gold equivalent increased from 323,550 ounces to 344,674 ounces.

The updated PEA is preliminary in nature and includes inferred resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty the estimates presented in the PEA will be realized.

The full PEA will be filed on SEDAR at www.sedar.com and Sonoro’s website www.sonorogold.com within 45 days of the issuance of this news release.

Table 1 : Key Economic Parameters

Assumption / Results Initial PEA Value Updated PEA Value Difference
%
Pre-Tax NPV ( 5) (USD) $68.7m $84.4m 22.9 %
Pre-Tax IRR 52.7 % 74.9 % 42.1 %
After- Tax NPV ( 5) (USD) $41.5m $53.5m 29.0 %
After- Tax IRR 32.4 % 45.6 % 40.4 %
Revenues (USD) $566.2m $603.2m 6.5 %
Net Revenues (USD) $67.2m $81.3m 21.0 %
Total Tonnes Processed 31.5mt 32.2mt 2.1 %
Total Tonnes Waste 65.5mt 66.8mt 2.0 %
Mine Life 7-Years 7-Years No Change
Strip Ratio 2.08 2.08 No Change
Gold Recovery 74 % 74 % No Change
Silver Recovery 27 % 27 % No Change
Gold Price (USD $/Au oz) $ 1,750 $ 1,750 No Change
Silver Price (USD $/Ag oz) $ 22 $ 22 No Change
Gold Grade (g/t Au) 0.41 0.43 4.7 %
Gold Equivalent Grade (g/t Au Eq) (Yrs. 1-3) 0.51 0.58 13.7 %
Silver Grade (g/t Au) 4.05 4.01 -1.0 %
Total Gold Equivalent Recovered (oz) 323,550 344,674 6.5 %
Initial CAPEX Costs (USD) $32.2m $26.0m -19.1 %
Sustaining Capital Costs (USD) $4.9m $7.4m 52.1 %
LOM Operating Costs (USD) $396.9m $415.4m 4.8 %
Cash Cost (USD $/ AuEq oz) $ 1,227 $ 1,206 -1.6 %
AISC (USD $/ AuEq oz) $ 1,351 $ 1,333 -1.3 %

Table 2 : Economic Summary Comparison (USD)

Economic Summary

Initial PEA Updated PEA
Pre-Tax After Tax Pre-Tax After Tax
NPV 5 $68.7m $41.5m $84.4m $53.5m
IRR 52.7 % 32.4 % 74.9 % 45.6 %

Table 3 : Updated Gold & Silver Price Sensitivity Analysis (USD)

Sensitivity $1,700 /oz Au
$20 /oz Ag
$1,750 /oz Au
$22 /oz Ag
$1,800 /oz Au
$24 /oz Ag
$1,900 /oz Au
$26 /oz Ag
$2,000 /oz Au
$28 /oz Ag
Pre-Tax NPV 5 $70.4m $84.4m $98.4m $124.9m $151.4m
Pre-Tax IRR 65.4 % 74.9 % 84.1 % 101 % 117.3 %
After-Tax NPV 5 $44.4m $53.5m $62.6m $79.8m $96.9m
After-Tax IRR 39.4 % 45.6 % 51.5 % 62.3 % 72.7 %
Payback 2.5 Years 2.2 Year 2.1 Years 1.8 Years 1.6 Years

Table 4 : Updated Operating & Capital Sensitivity Analysis (USD)

Sensitivity -20 % -10 %