261,014 oz Au Average Annual Production for First 11 Years
After-Tax $1,066 Million NPV(5%) and 31.7% IRR at US$1,600/oz Au with 24 Year Mine Life
$159 Million Average Annual After-Tax Free Cash Flow for First 11 Years of Full Production
Toronto, Ontario--(Newsfile Corp. - September 7, 2022) - Moneta Gold Inc. (TSX: ME) (OTCQX: MEAUF) (XETRA: MOP) ("Moneta" or the "Company") is pleased to announce positive results from a Preliminary Economic Assessment ("PEA") for the Company's 100% owned Tower Gold project in Timmins, Ontario. The PEA, prepared by Ausenco Engineering Canada Inc. ("Ausenco") in accordance with National Instrument 43-101 ("NI 43-101"), demonstrates the potential to develop a low-cost 19,200 tonnes per day ("tpd") combined open pit and underground mining operation with strong economics and the opportunity for significant benefit to the Indigenous Nations, local stakeholders, and the Company.
HIGHLIGHTS OF THE PEA
(All figures are stated in Canadian dollars unless otherwise stated)
- Low capital intensity project, with initial capital ("CAPEX") of $517 million for a 7.0 million tonne per annum ("tpa") processing plant including mine preproduction, infrastructure (roads, power line and substation, tailings storage facility, ancillary buildings, and site water management structures) and $886 million sustaining capital
- After-tax pay-back of 2.6 years and profitability index (NPV/initial capital) of 2.1
- Robust economics with $1,459 million pre-tax Net Present Value at a 5% discount rate ("NPV5%"), $1,066 million after-tax, and 38.9% pre-tax Internal Rate of Return ("IRR"), 31.7% after-tax; at US$1,600/oz gold and exchange rate of US$0.78/C$
- Highly leveraged to the gold price with after-tax NPV5% of $1,339 million, 37.8% IRR, and 2.2-year payback at spot US$1,700 per ounce gold
- $1,932 million cumulative after-tax cash flow
- Mine life of 24 years, with average annual gold production of 261,014 oz in years 1 to 11 (192,666 oz for LOM) for 4,581,000 ounces total gold production LOM
- Peak annual gold production of 368,622 ounces
- Average mill head gold grade of 1.28 grams per tonne ("g/t") gold ("Au") in years 1 to 11 (0.94 g/t Au for LOM)
- Average mill recovery of 91.3% LOM
- Cash cost of US$910 per ounce and all-in sustaining cost ("AISC") of US$1,073 per ounce gold
- Opportunities to increase production and expand and improve economics of resources
Gary O'Connor, Moneta's President and Chief Executive Officer commented, "We're very pleased with the results of this PEA, which has outlined a strong base-case for a significant and highly profitable new gold mine in Ontario. Our robust base case at US$1,600 per ounce gold price for the project supports a 24-year mine life with average annual production of 261,014 ounces of gold for the first 11 years with an after-tax NPV of $1,066 million and IRR of 31.7%, with very attractive cash costs and AISC, low CAPEX and low capital intensity. This PEA confirms the potential for a robust gold project with compelling project economics and represents an important interim update on the progress of our work program at Tower Gold. In 2022, we will continue to focus on in-fill and definition drilling to better define resources and improve the economics of the resource through increasing grades and lowering strip ratios, while also identifying new targets."
TOWER GOLD PEA OVERVIEW
The PEA was prepared in accordance with National Instrument 43-101 ("NI 43-101") by Ausenco. The Company will file the PEA on SEDAR at www.sedar.com in accordance with NI 43-101, and on its website within 45 days.
Table 1: Summary of Project Economics
| General | Unit | LOM Total / Avg. | |
| Gold price assumption | per ounce | US$1,600 | |
| Exchange rate | ($US: $CAD) | 0.78 | |
| Mine life | years | 24 | |
| Total waste | million tonnes | 495 | |
| Total overburden | million tonnes | 237 | |
| Total mill feed | million tonnes | 166 | |
| Strip ratio (total) | waste: mined resource | 4.63 | |
| Strip ratio (without overburden) | waste: mined resource | 3.13 | |
| Economics (pre-tax) | |||
| Net present value (NPV 5%) | millions | $1,459 | |
| Internal rate of return (IRR) | % | 38.9% | |
| Payback | years | 2.2 | |
| LOM avg. annual cash flow | millions | $132 | |
| LOM cumulative cash flow | millions | $2,579 | |
| Economics (after-tax) | |||
| Net present value (NPV 5%) | millions | $1,066 | |
| Internal rate of return (IRR) | % | 31.7% | |
| Payback | years | 2.6 | |
| LOM avg. annual cash flow | millions | $105 | |
| LOM cumulative cash flow | millions | $1,932 | |
| Profitability index (NPV/initial capital) | ratio | 2.1 | |
| Peak investment | millions | $517 | |
| Production | |||
| Mill head grade | g/t Au | 0.94 | |
| Mill head grade (years 1 - 11) | g/t Au | 1.28 | |
| Mill recovery rate (average LOM) | % | 91.3% | |
| Average annual mining rate | tpd | 19,178 | |
| Average annual gold production | ounces | 192,666 | |
| Average annual gold production (years 1 - 11) | ounces | 261,014 | |
| Peak gold production (year 6) | ounces | 368,622 | |
| Total LOM recovered gold | thousand ounces | 4,581 | |
| Operating Costs | |||
| Mining + Reclaim cost | $/t mined | $3.7 | |
| Mining + Reclaim cost | $/t milled | $20.8 | |
| Processing cost | $/t milled | $10.1 | |
| G&A cost | $/t milled | $0.9 | |
| Total operating costs | $/t milled | $31.8 | |
| Refining & transport cost | $/oz | $4.7 | |
| Royalty NSR (Garrison deposits) | % | 1.5% | |
| Cash costs* | US$/oz | $910 | |
| AISC** | US$/oz | $1,073 | |
| Capital Costs | |||
| Initial capital | millions | $517 | |
| Sustaining capital | millions | $886 | |
| Closure costs | millions | $78 | |
| Salvage value | millions | $10 |
Notes
* Cash costs consist of mining costs, processing costs, general & administrative expenses and refining charges and royalties.
** AISC includes cash costs plus sustaining capital, closure cost and salvage value.
The PEA is preliminary in nature, includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
SENSITIVITIES
A sensitivity analysis was conducted on the base case pre-tax and after-Tax NPV and IRR of the Project, using the following variables: metal price, initial capex, total operating costs, and foreign exchange. Table 2 summarizes the after-tax sensitivity analysis results at various gold price assumptions.
Table 2: After-Tax Sensitivity Summary
| Gold Price | $1,350 | $1,500 | $1,600 | $1,700 | $1,950 |
| (US$/oz) | (Base Case) | ||||
| After-tax NPV(5%), millions | $385 | $794 | $1,066 | $1,339 | $2,019 |
| IRR | 15.8% | 25.6% | 31.7% | 37.8% | 52.0% |
| Profitability index | 0.7x | 1.5x | 2.1x | 2.6x | 3.9x |
| Payback (years) | 5.4 | 4.1 | 2.6 | 2.2 | 1.6 |
As shown in Table 3 and Table 4, the sensitivity analysis revealed that the project is most sensitive to changes in gold prices, and foreign exchange and less sensitive to initial capex and operating costs.
Table 3: After-Tax NPV5% Sensitivity
| Gold Price | After-Tax NPV(5%) | Initial CAPEX | Total OPEX | FX | |||
| (US$/oz) | (Base Case) | (-10%) | (+10%) | (-10%) | (+10%) | (-10%) | (+10%) |
| $1,350 | $385 | $425 | $344 | $623 | $145 | $794 | $48 |
| $1,500 | $794 | $833 | $754 | $1,032 | $555 | $1,248 | $422 |
| $1,600 | $1,066 | $1,106 | $1,026 | $1,304 | $828 | $1,550 | $670 |
| $1,700 | $1,339 | $1,378 | $1,299 | $1,577 | $1,101 | $1,853 | $917 |
| $1,950 | $2,019 | $2,059 | $1,980 | $2,257 | $1,781 | $2,609 | $1,537 |
| $2,100 | $2,427 | $2,467 | $2,388 | $2,665 | $2,189 | $3,062 | $1,908 |
Table 4: After-Tax IRR Summary
| Gold Price | After-Tax IRR | Initial CAPEX | Total OPEX | FX | |||
| (US$/oz) | (Base Case) | (-10%) | (+10%) | (-10%) | (+10%) | (-10%) | (+10%) |
| $1,350 | 15.8% | 18.2% | 13.9% | 21.1% | 9.6% | 25.6% | 6.5% |
| $1,500 | 25.6% | 28.9% | 22.9% | 30.3% | 20.5% | 35.8% | 16.8% |
| $1,600 | 31.7% | 35.8% | 28.5% | 36.3% | 27.0% | 42.3% | 22.7% |
| $1,700 | 37.8% | 42.3% | 34.0% | 42.1% | 33.2% | 48.6% | 28.4% |
| $1,950 | 52.0% | 58.0% | 47.1% | 56.0% | 47.9% | 63.9% | 42.0% |
| $2,100 | 60.3% | 67.1% | 54.7% | 64.1% | 56.3% | 72.9% | 49.7% |
MINING
The Tower Gold project will consist of the extraction of two separate areas: Golden Highway and Garrison. Golden Highway consists of the mineral deposits Westaway, Southwest, 55, and Windjammer, while Garrison encompasses Garrcon, 903, and Jonpol. The overall strategy is to mine the deposits in two phases using a combination of open pit and underground mining to achieve a total annual production rate of 7.0 million tonnes.
The mineral resources used in the mine plan are contained in the seven mineral deposits over a length of 12 kilometres and span from surface down to a vertical depth of approximately 1,100 metres ("m"). The Westaway and South West deposits are characterized by multiple mineral corridors striking NW and dip sub-vertically and steeply to the west. The deposits have potential for open pit and underground mining.
The Tower Gold project will be extracted with a combination of open pit mining for mineralization closer to surface, and underground mining for mineralization at depth. The combined output of both mines will be 166.4 million tonnes ("Mt") at an average grade of 0.94 g/t Au. The open pit mine will be responsible for 158.2 Mt at a grade of 0.81 g/t Au over an open pit life of 24 years, while the underground mine will contribute 8.2 Mt at a grade of 3.42 g/t Au over an underground mine life of 12 years. Table 5, below, illustrates the mineral deposits each mine will extract.
The underground mine will be accessed through a single portal from surface leading to Westaway and South West via the main ramp of size 5.5 m width ("W") x 5.8 m height ("H") and at a slope gradient of 1:7. The mining method selected is longitudinal sublevel long-hole open stoping with minimum dimensions of 20 m L x 3 m W x 25 m H. Mineralized material will be extracted by ramp using a fleet of 50 tonne haul trucks at an average peak mine production rate of 900,000 tpa. Paste-fill will be used to backfill mined stopes.
Table 5: Mining Areas and Deposits
| Mine | Area | Deposit |
| Underground | Golden Highway | Westaway |
| South West | ||
| Open Pit | Golden Highway | 55 |
| Westaway | ||
| South West | ||
| Windjammer | ||
| Garrison | Garrcon | |
| 903 | ||
| Jonpol |
The Tower Gold project will employ a conventional truck shovel open pit mining method comprising separate waste and ore equipment fleets to improve on ore selectivity and reduce waste removal costs. The ore fleet consists of 12 m³ excavators and 90 tonne trucks while the waste fleet consists of 29 m³ excavators and 220 tonne trucks. Surface mining will extract material from two areas of the property: Garrison and Golden Highway with Golden Highway providing the bulk of the PEA mine plan.
PROCESSING
The process flowsheet was designed based on metallurgical test-work carried out for both the Garrison and Golden Highway deposits. Based on a mine to mill analysis, the processing plant capacity was selected as 7.0 million tpa, or 19,200 tpd.
The process design for the Project consists of:
- Two-stage crushing, consisting of a primary jaw crusher and a secondary cone crusher with screen classification and material handling equipment.
- Grinding of crushed material to 80% (P80) passing size of 75 μm (micron) with a 9.1 m diameter by 5.2 m length SAG (semi-autogenous grind) mill and an 8.2 m diameter by 12.8 m length ball mill in closed circuit with hydrocyclones. The SAG mill and ball mill are equipped with 8.0 MW (megawatt) and twin 9.0 MW motors, respectively.
- A gravity concentration circuit included in the grinding area. Gravity concentrate will feed intensive cyanidation and will be recovered by electrowinning independently of the primary leach circuit.
- Leaching and adsorption circuit including two leach tanks and six carbon-in-leach (CIL) tanks, for a total leach and adsorption circuit retention time of 24 hours which will feed loaded carbon to twin 9 t carbon elution systems.
- Cyanide destruction using an SO2/air system on the final tailings slurry.
- Final tails from the cyanide destruction circuit will be thickened prior to deposition in either a management facility or in exhausted open pits. A portion of the tailings will be filtered to produce paste backfill suitable for use in the underground mine workings.
TAILINGS MANAGEMENT
The tailings management design was completed by Ausenco based on conventional thickened tailings storage. There are two storage facilities for the project:
- A wet tailings storage facility which will be utilized in the first 6 years of the project (before the open pits become available for in-pit tailings disposal) and from year 17 to the end of project after all available open pits have been filled. The design incorporates five phases to build the embankments over the life of the facility. Ultimate storage capacity of this facility is 90.1 Mt.
- In-pit deposition in the exhausted open pits, from years 7 through 17 of the project. Total storage capacity of these pits is 73.9 Mt.
The Company will provide additional details related to Tailings Management and Closure in the PEA report filed on SEDAR within 45 days.
Table 6: Mining & Processing Inputs
| Mining & Processing Inputs | ||
| Mine life - Total | years | 24 |
| Mining Rate | ||
| Open pit* | tpd | 18,228 |
| Underground** | tpd | 2,466 |
| Open pit | ||
| Total mill feed | million tonnes | 158.2 |
| Gold grade (diluted) (years 1 - 11) | g/t | 1.03 |
| Gold grade (diluted) (LOM) | g/t | 0.81 |
| Total waste | million tonnes | 495.3 |
| Total overburden | Million tonnes | 237.2 |
| Total material mined | million tonnes | 890.7 |
| Strip ratio (total) | waste: mined resource | 4.63 |
| Strip ratio (without overburden) | waste: mined resource | 3.13 |
| Underground | ||
| Total mill feed | million tonnes | 8.2 |
| Gold grade (diluted) | g/t | 3.42 |
| Processing | ||
| Feed rate | tpd | 19,178 |
| Total tonnes processed |
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