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Preliminary Economic Assessment Showsa42.6% Pre-Tax IRR,
The mineral claims comprising the Montauban property (the “Property”) are located in southern
PEA Highlights:
Pre-tax net present value (NPV) (discount rate 5%) of
C$ 14.08M , internal rate of return (IRR) of 42.6% and payback of less than 2 years;After-tax NPV (discount rate 5%) of
C$ 6.99M , IRR of 23.4% and payback of less than 2 yearsAssumed gold (Au) price $1750US/Oz, silver (Ag) price $21US/Oz and mica concentrate price $200US/t with a CAD/USD exchange rate of 1.35;
4 years of mine life with 923,000 tonnes of tailings at 0.41 g/t Au 33.34 g/t Ag and the recovery of 57,187t of mica;
Revenue of
C$ 62.2M ;Life of Mine capital of
C$ 17.04M ;Operation cost per tonne of tailings at
C$ 29
The positive results of the PEA will allow us to seek financing for the completion of the mill, the construction of the new tailings pond and submission of the Bond for the reclamation plan.
The Property also hosts an historical underground hard-rock resource prepared by Mr.
In short, we are not there for only four years. We will develop the camp in a manner that will respect of all stakeholders around our milling facility, but our priority is to reclaim the legacy tailings and restore the heydays of mining at Montauban.”
PEA Overview, Description and Location
The Property as of today comprises a contiguous block of 76 claims covering 2,360.2 ha or 23.6 km2, and is underlain by rocks of the
From 1911 to 1955, a total of 2,655,588 short tons of massive-sulphide ore grading 4.53% Zn, 1.54% Pb, 0.69 g/t Au, and 85.7 g/t Ag was mined from the Tétreault-
Now the project calls for the excavation and pumping of tailings material to the mill for recovery of coarse micas into a sellable concentrate, followed by regrinding prior to cyanidation with recovery by
As per discussions with the municipality, a formal agreement was signed and a royalty of 1% will be paid to the municipality.
The PEA considers a conventional truck and shovel sand pit operation with the exception of having a pumping box where the tailings will be mixed with water and pumped to the mill, reducing the consumption of fuel and required equipment for the Project. In short, the mineralized material is excavated and will be discharged on grizzly, then put in slurry and pumped to the mill. The mill will be in operation full time over nine months of the year (April-December).
The PEA is based on the mineral resource estimate presented in a Technical Report titled “NI 43-101 Technical Report:Mineral Resource Estimate and Preliminary Economic Assessment of the
The full PEA will be filed on SEDAR at www.sedar.com and ESGold’s website www.esgold.com within 45 days of the issuance of this news release.
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Figure 1: Property location (outlined) as at
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Figure 2: Project tailings site locations
Mineral Resources Estimate
The Mineral Resource Estimate (MRE) for the Montauban tailings project is based on historical data and recent (2022) SONIC drilling data provided by
Thedrill hole database contained 352 valid drill hole collars, with a total meterage of 1,654.04 m and 1,170 assay intervals totaling 1,498.05 m. For the
As part of the MRE process, the Company and GoldMinds compiled, verified and modelled all technical information available from the Montauban and the
Estimated mineral resources for the Montauban and the
It is important to inform the reader that most of the tailings in the MRE are secured under agreements between
Table1: The mineral resources estimation for the Montauban and the
Montauban tailings | Au (g/t) | Ag (g/t) | AuEq (g/t) | Tonnes | AuOz eq | ||
Indicated | 0.40 | 31 | 0.78 | 603 700 | 7 800 | 610 350 | 15 000 |
Inferred | 0.34 | 28 | 0.67 | 292 000 | 3 150 | 258 900 | 6 400 |
Au (g/t) | Ag (g/t) | AuEq (g/t) | Tonnes | AuOz eq | |||
Inferred | 1.21 | 137 | 2.84 | 27 300 | 1 050 | 120 200 | 2 500 |
Total Indicated | 0.40 | 31.45 | 0.77 | 603 700 | 7 800 | 610 350 | 15 000 |
Total Inferred | 0.41 | 36.93 | 0.87 | 319 300 | 4 200 | 379 100 | 8 900 |
Notes:
The Mineral Resources provided in this table were estimated byM. Rachidi P.Geo ., and C. Duplessis, Eng., (QPs) ofGoldMinds Geoservices Inc. , using currentCanadian Institute of Mining , Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves, Definitions and Guidelines.Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, market or other relevant issues. The quantity and grade of reported Inferred Mineral Resources are uncertain in nature and there has not been sufficient work to define these Inferred Mineral Resources as indicated or Measured Mineral Resources. There is no certainty that any part of a Mineral Resource will ever be converted into Mineral Reserves.
The database used for this mineral estimate includes drill results obtained from 2010, 2018 and 2022 drill programs as well as the 2022 exploration works.
For the Montauban tailings (Anacon Lead 1, Tetreault 1, Anacon Lead 2 Tetreault 2) the mineral resource presented here were estimated with a block size of 3mE x 3mN x 1.5mZ. The blocks were interpolated from equal length composites (1.5 metre) calculated from the mineralized intervals. Prior to compositing, high-grade gold assays were capped to 3 g/t Au and 125 g/t Ag. The mineral estimation was completed using the inverse distance to the square methodology utilizing three passes. For pass 1 and pass 2 minimum of 2 composites and maximum of 05 composites with a maximum of 1 composites from the same drillhole (a minimum of two drillholes are needed to estimate blocks). For pass 3 minimum of 2 composites and maximum of 5 composites were used. The Indicated resources classified using a minimum of two drillholes within 20 m of each other or less were used. The inferred resources were classified by a minimum of two drillholes within 50m of each other or less. Tonnage estimates are based on a fix density of 1.52 tonnes per cubic metre.
For the
Notre-Dame-De-Montauban tailings the mineral resource were estimated with a block size of 0.5mE x 0.5mN x 0.5mZ. The blocks were interpolated using central composites calculated from the mineralized intervals. Prior to compositing, assays were not capped. The mineral estimation was completed using the polygon method. The resources classified as inferred and the tonnage estimates are based on a fix density of 1.5 tonnes per cubic metre.The commodity prices showed in the table below. The formula used for AuEq calculation: AuEq= ((Au x 75.96) +(Ag x 0.91))/(2362.5/31.103). The Mineral resources are in-situ and the recovery values are not used.
Tonnages and AuEq oz in the table above are rounded to nearest hundred. Numbers may not total due to rounding
To estimate the micas concentrations in the Montauban tailings we took the hole samples from Anacon Lead 1 (6 holes) and from Tetreault 2 (3 holes). A total of 32 tailings samples from 9 different holes were sent to SGS laboratory in
Micas (%) | Tonnes | Micas (t) | |
Indicated Micas Tetreault_2 | 4 | 116 800 | 4 700 |
Total Micas Indicated | 4 | 116 800 | 4 700 |
Inferred Micas AL1 | 9 | 571 900 | 51 500 |
Inferred Micas Tetreault_2 | 4 | 26 100 | 1 000 |
Total Micas Inferred | 8,8 | 598 000 | 52 500 |
Mr.
Mining & Processing
The operation is to bring the material from the tailings pile to the pump box near to the processing plant. The project is to feed 270,000 t of tailings to the plant for the first 3 years and 113,000t for the fourth year of operation for a total of 923,000 metric tonnes. The contractor at mining operation will operate on a 9-month operation basis to avoid freezing temperatures.
There will be no need for drilling and blasting as the material is already of screen size. The material will be picked up by a shovel (Cat 336 size type) or a loader (Cat 966 size type). The hauling work can be done by a single articulated truck (Cat 730 size type) with a capacity of 14 cubic meters and a second truck will be available on site as backup. The truck will unload near to the pump box (plumper) and a loader will feed the plumper. At short distance the excavator will discharge directly on the grizzly at the pump box. The work will be contracted out on a 24 hour/7-day basis.
At the beginning of the initial production as the pile is close to the plant, a wheel loader could be used on the pile to load the truck and the same loader could load the plumper by driving down to the plant. After a while, the wheel loader will not be able to do both and a shovel should be brought to the pile to do the work. Limited power is needed on the pile for the pump box and a lighting system will be installed on the pile near the tailing is mixed into slurry in the pump box.
Supporting on-site infrastructure will include a small administrative building, warehouse, fuel tank, spare generators and several 40-foot steel containers for material storage. Employees will be lodged nearby, no need for a logging camp.
The most efficient tests include the following steps: sieving the feed to 100 Mesh, the coarse fraction goes to the Humphrey spiral which separates the sample into light, intermediate and heavy fractions. The intermediate fraction is passed three times through Humphrey’s spiral and the light fraction is passed one last time trough Humphrey’s spiral. This method produce a mica concentrate with a mass pull varying from 4 to 9 %. The remaining material is ground and fed into the cyanidation tank for 48 hours with 3 grams of sodium cyanide, zinc power is used for the cement which is thereafter melt to produce the bars. The average recovery for gold is 92% and 77% for silver. A detailed flowsheet will be supplied in the technical report.
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Isometric view looking south of the designed mill by
Figure 3: The Mill 3D Layout
Environment, Permitting and Social
It is of public knowledge that the Montauban region has a high environmental legacy of contamination by historical tailings and it is the objective of
The company is fully permitted with its Certificate of Authorization and approved reclamation plan for Anacon Lead 1 i.e. for its mill and most of its tailings tonnage. It is important to mention that the Municipality has approached the company and requested the removal of the tailings adjacent to the track and its inclusion into the plan. The company is in close collaboration with the Municipality and the
The community is supportive of the project as it will remove tailings and creates jobs and local opportunities.
Capital Costs
The PEA is based on a capital cost summary, in accordance with AACE Class 5 guidelines with an estimated accuracy of +/- 35%, which is shown in the table below:
Table2: Capital costs
Description | Cost – CA$ |
Mine capital costs | 450,000 |
Plant Equipment+Installation | 7 860,000 |
Infrastructure capital costs | 2 018,500 |
Closure costs | 1 150,000 |
Contingency (30%) | 3 443,500 |
Owner costs (5%) | 574,000 |
EPCM costs (5%) | 574,000 |
Total initial capex(rounded) | 16 070,000 |
*Numbers rounded
A required working capital estimated at $1 761 200 is required and should be added to the required capex.
Operating Costs
Mine operating costs by activity area are shown in the table below.
Table 2: Operating costs detailed
Items | Cost | Cost |
CA$ | CA$/t tailings mined | |
Mine operating costs | 4,153,500 | 4.50 |
Processing costs | 20,049,400 | 21.72 |
G&A | 2,889,800 | 3.13 |
Total | 27,092,700 | 29.40 |
*Numbers may not add due to rounding
Economic Model
The main assumptions for the economic analysis and the results are summarized in the following tables:
Table 3: Main assumptions of Economic Analysis
Items | Units | Values |
Micas concentrate | US$/mt | 200 |
Gold selling price | US$/oz | 1 750 |
Silver selling price | US$/oz | 21 |
Mining (mineralized tailings) tonnage over LOM | metric tonne | 923,000 |
Royalty on sales | % | 1.00 |
Federal tax | % | 15.00 |
Provincial tax | % | 11.50 |
Mining tax | % | 16.00 |
Table 4: Base Case economics
Items | Value | |
CA$ | ||
Total revenue of sales | 62,207,000 | |
Total operating costs | 27,093,000 | |
Before-tax discounted | (5.0%) NPV | 14,079,000 |
After-tax discounted | (5.0%) NPV | 6,992,000 |
*Numbers rounded
Table 5: Detailed Cash flow
Note NI-43-101: there is no Ore in this project for the moment as it requires either a prefeasibility or feasibility study to define Ore and this PEA uses mineral resources partially classified as Inferredwhich is not used in the preparation of mineral reserves.
Figure 4. Sensitivity of NPV5 for the Base Case before taxes.
Figure 5. Sensitivity of IRR for the Base Case before taxes.
Additional information is provided in the Technical report.
Recommendations and Opportunities
The following opportunities have been identified as potential enhancements for the Montauban project. These opportunities could have material value-added impact on the project although additional work is required for them to be integrated.
The current tailings resource estimate outlines only a proportion of the tailings that should be expected in the project area according to historical production records.
The project land package hosts historical resources in hard rock that are non-compliant with NI 43-101 standards.
The project also hosts greenfield exploration potential as modern exploration techniques have not been systematically applied over the property.
Toll milling agreements with projects outside the Montauban area could allow mill utilisation and revenue following the depletion of the current project resource.
The Montauban project has the effect of reclaiming an orphan site therefore removing the environmental liability attributed to the Quebec Government.There are precedents in the province of
Quebec where the government offers financial support to projects reclaiming orphan sites.Due to the economic challenges in the region of Montauban it is possible that government grants be obtained to fund a portion of employee salary and training costs.
The mica value received in the current plan assumes that the recovered mica is in the lower marketable quality range.Mica value can be substantially enhanced through enrichment.
The company has entered into a joint-venture agreement to create construction building materials with the use of the processed tailings and organic polymer binder.
The Montauban project could be reshaped into a
carbon offset project for whichcarbon credits could be sold.
QA/QC
The tailings samples were placed into plastic bags. Sample tags were inserted into each bag before being sealed and stored at the campsite in a secure area. At the completion of the program the samples were transported by company trucks directly to the SGS laboratory in
Blank and standard were inserted in each batch of 20 samples sequence and sent to the laboratory for analysis in addition to the standards, blanks and pulp duplicate inserted by
The verifications of QP’s allow the disclosure of this study and press release.
Qualified Person
The technical content of this news release has been reviewed and approved by
Pour une traduction française de ce communiqué de presse, veuillez visiter notre site Web àwww.esgold.ca.
About the Company
For more information on
On behalf of the Board of Directors,
Chief Executive Officer
Investor contact
Tel: +1 514-712-1532
Email:info@esgold.ca
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