Highlights:
- NPV of US$783m (pre-tax) and IRR of 33% at 5% discount rate and US$1700/oz gold price.
- NPV of US$503m (post-tax) and IRR of 26% at 5% discount rate and US$1700/oz gold price.
- Overall capital cost of US$375 million (incl. US$41m contingency, US$22m capitalised pre-strip, US$20m solar plant and US$8m grid power).
- Capital estimate includes latest consumer prices and reflects the recent dramatic price escalations especially in steel, reagents, diesel prices and transport costs.
- Payback period of 2.3 years.
- 13-year Life-of-Mine (“LOM”) and 5.0 million tonnes per annum (“Mtpa”) processing capacity.
- Average annual gold production (first 4 years) of 200koz at US$890/oz all-in sustaining cost.
- Average annual gold production (first 10 years) of 169koz at US$930/oz all-in sustaining cost; LOM average production of 152koz at US$939/oz.
- LOM gold recovery of 93.2% (first 6 years) and 92.0% (LOM) utilising a conventional 3-stage crushing, ball milling, gravity separation, pre-oxidation and CIL circuit plus a double-lined dry-stack tailings facility.
- Total Proven and Probable Reserves of 2.150 Moz from 64.3 Mt at 1.04 g/t (at 0.3g/t cut-off).
Osino will host a webinar to discuss the PFS results, today, September 6, 2022 at 11am ET (8am PT). Register here to participate: https://attendee.gotowebinar.com/register/2347595189721541904
VANCOUVER, British Columbia, Sept. 06, 2022 (GLOBE NEWSWIRE) -- Osino Resources Corp. ( TSXV:OSI ) ( FSE:RSR1 ) ( OTCQX:OSIIF ) (" Osino ” or “ the Company ”) is pleased to announce the results of the pre-feasibility study (“ PFS ”) for Osino’s Twin Hills Gold Project (“ Twin Hills “ or the “ Project ”), which is located in central Namibia and is rapidly being advanced through accelerated exploration drilling and fast-tracked development studies.
The PFS was prepared by Lycopodium Minerals Canada (“ Lycopodium ”) in accordance with National Instrument 43-101— Standards of Disclosure for Mineral Projects (" NI 43-101 ") and contemplates a low-risk, technically simple open-pit mine utilizing contract mining and feeding a conventional carbon-in-leach (“ CIL ”) metallurgical plant processing 5 million tonnes of mineralized material per annum.
Heye Daun, Osino’s co-founder, President & CEO commented: “We are very pleased with the results of this PFS which demonstrates that Twin Hills is what we always said it would be, namely a long-life, low-cost and economically robust open pit gold project with significant upside. It is geologically consistent, metallurgically simple and technically low risk with a low capital intensity and significant future upside. We are proud to have been able to deliver this PFS within 3 years of discovery and our vision for the next year is to optimize and improve the project further and to continue to advance Twin Hills to the construction stage. We expect imminent, significant progress on the permitting & project financing side which will assist in continuing to fast-track the project”.
PFS Overview and Financial Analysis
The Twin Hills Gold Project is located within Namibia’s prospective Damara sedimentary mineral belt, in proximity to and along strike of the producing, open-pit Navachab and Otjikoto gold mines.
Twin Hills is a sedimentary-hosted, structurally controlled gold deposit that fits the broad orogenic model and is amenable to conventional open-pit gold mining and carbon-in-leach metallurgical processing.
The table below summarizes the results and key valuation metrics of the PFS on a pre- and post-tax basis.
Table 1: Prefeasibility Study Economic Assessment Summary
| US$1700/oz | US$1850/oz | ||||
| Units | Pre-Tax | Post-Tax | Pre-Tax | Post-Tax | |
| NPV 5% | US$m | 783 | 503 | 999 | 638 |
| IRR | % | 33% | 26 % | 41% | 32 % |
| Payback | Years | 2.2 | 2.3 | 1.9 | 2.0 |
| LOM Cashflow | US$m | 1165 | 756 | 1450 | 934 |
The financial model was completed on a 100% project basis and includes a 3% gross royalty and 1% export levy to the Namibian government. The economic analysis carried out for the Project uses a cash flow model at a base gold price of US$1,700/oz and a 5% discount rate.
A sensitivity analysis utilising a range of gold prices and operating variables was completed. The results are tabulated in table 4 on page 5.
The financial assessment of the Project was carried out on a 100% equity basis, not accounting for potential sources of funding which may include debt. Osino’s understanding of current Namibian tax regulations were applied to assess the tax liabilities.
The key operating assumptions and economic parameters used in the PFS are as follows:
Table 2: Key Operating Assumptions
| Item | Units | Amount |
| Life of Mine | Years | 13 |
| Gold price (base case) | US$/oz | 1 700 |
| Mining dilution | % | 5,0% |
| Ore loss | % | 3,5% |
| Gold Recovery | % | 92,0% |
| Royalty (tax-deductible) | % | 3,0% |
| Export Levy | % | 1,0% |
| Life-of-Mine Production Parameters | ||
| Ore Tonnes Mined | Kt | 64 287 |
| Ore Grade Mined | g/t | 1,04 |
| Ore Metal Mined (Proven & Probable Reserves) | Koz | 2 150 |
| Waste Tonnes Mined | Kt | 285 013 |
| Strip Ratio | 4,43 | |
| LOM Gold Production | Koz | 1 978 |
| LOM Average Annual Gold Production (years 1 – 10) | koz annum | 169 |
| Average Annual Gold Production (years 1 – 4) | koz annum | 200 |
| Life-of-Mine Unit Costs per Tonne Mined/Processed | ||
| Refining cost | US$/oz | 0.55 |
| Gold transport cost | US$/oz | 2.20 |
| Mining Cost (per tonne mined) | US$/t | 2,62 |
| Variable Processing Cost (per tonne processed) | US$/t | 8.97 |
| Fixed Processing Cost (G&A) | US$m/annum | 18,31 |
| Overall Processing unit Cost (per tonne processed) | US$/t | 12,45 |
| Unit Costs per Ounce Produced | ||
| LOM Average Operating Costs 1 | US$/oz | 831 |
| LOM Average Cash Costs 2 | US$/oz | 931 |
| LOM Average All-in Sustaining Costs 3 | US$/oz | 939 |
| Capital Costs | ||
| Construction Capital (Lycopodium Estimate) | US$m | 283 |
| Contingency (14,4%) | US$m | 41 |
| Capitalised Pre-strip | US$m | 22 |
| PV Plant | US$m | 20 |
| Grid power extra (additional to signed PSA) | US$m | 8 |
| First Fills (mostly steel balls) | US$m | 2 |
| Total Project Capital (incl. contingency) | US$m | 375 |
| Sustaining Capital | US$m | 74 |
Notes:
1. Mining, processing plus on-site G&A
2. Operating costs plus selling costs, royalties & levies
3. Cash costs plus sustaining capital (incl. closure costs & salvage value)
A summary of the production schedule in tabulated format and cash flow model with key economic results can be viewed in Figure 16 below.
It should be noted that there is scope for significant optimization and improvement to the mine design and production schedules which will be reflected in the next technical assessment of the project.
Sensitivity Analysis
An after-tax sensitivity analysis to the key project variables was carried out which indicates that the project is most sensitive to a change in grade or gold recovery, as indicated by the slope of the blue line in the diagram below.
At a stressed economic scenario of a gold price of US$1400/oz and an elevated discount rate of 10% the project still reflects a post-tax NPV of US$114m.
The project is most sensitive to changes in gold grade, with every 5% change in gold grade resulting in a change in NPV of around 15%. This is indicated by the slope of the blue line graph in the diagram below, which confirms that the project NPV is most sensitive to changes in the average gold grade.
Figure 1: Post-Tax Project NPV Sensitivity to Variations in Key Project Parameters at US$1700/oz
https://www.globenewswire.com/NewsRoom/AttachmentNg/6862aff1-0511-4aca-a5f5-d8a3a327ed71
Table 3: Two-factor Post-Tax Project NPV Sensitivity Analysis
| Discount Rate & Gold Price - Post-Tax NPV 5% Sensitivity | ||||||||
| 1400 | 1500 | 1600 | 1700 | 1800 | 1900 | 2000 | ||
| 5 % | 228 | 320 | 412 | 503 | 593 | 683 | 773 | |
| 6 % | 202 | 290 | 378 | 464 | 550 | 636 | 721 | |
| 7 % | 177 | 262 | 345 | 428 | 510 | 591 | 673 | |
| 8 % | 154 | 235 | 316 | 395 | 473 | 550 | 628 | |
| 9 % | 133 | 211 | 288 | 364 | 438 | 513 | 587 | |
| 10 % | 114 | 189 | 263 | 335 | 406 | 477 | 548 | |
| Mill Feed Grade & Gold Price - Post-Tax NPV 5% Sensitivity | ||||||||
| 1400 | 1500 | 1600 | 1700 | 1800 | 1900 | 2000 | ||
| 0,94 | 94 | 182 | 266 | 348 | 431 | 512 | 594 | |
| 0,99 | 162 | 252 | 339 | 426 | 512 | 598 | 684 | |
| 1,04 | 228 | 320 | 412 | 503 | 593 | 683 | 773 | |
| 1,09 | 293 | 389 | 485 | 580 | 674 | 769 | 863 | |
| 1,14 | 357 | 458 | 557 | 656 | 755 | 854 | 953 | |
| Mining Unit Cost & Gold Price - Post-Tax NPV 5% Sensitivity | ||||||||
| 1400 | 1500 | 1600 | 1700 | 1800 | 1900 | 2000 | ||
| 2,36 | 273 | 365 | 457 | 547 | 637 | 727 | 817 | |
| 2,49 | 251 | 343 | 435 | 525 | 615 | 705 | 795 | |
| 2,62 | 228 | 320 | 412 | 503 | 593 | 683 | 773 | |
| 2,75 | 205 | 298 | 390 | 481 | 571 | 661 | 751 | |
| 2,88 | 182 | 276 | 367 | 459 | 549 | 640 | 730 | |
| Processing Cost (Variable) & Gold Price - Post-Tax NPV 5% Sensitivity | ||||||||
| 1400 | 1500 | 1600 | 1700 | 1800 | 1900 | 2000 | ||
| 7,90 | 255 | 347 | 439 | 529 | 619 | 709 | 799 | |
| 8,34 | 241 | 334 | 425 | 516 | 606 | 696 | 786 | |
| 8,78 | 228 | 320 | 412 | 503 | 593 | 683 | 773 | |
| 9,22 | 215 | 307 | 399 | 490 | 580 | 670 | 760 | |
| 9,66 | 201 | 294 | 386 | 477 | 567 | 658 | 748 | |
| Construction Capex & Gold Price - Post-Tax NPV 5% Sensitivity | ||||||||
| 1400 | 1500 | 1600 |
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