VANCOUVER (miningweekly.com) – Canadian miner Premier Gold has reported strong economic metrics for its 100%-owned Cove project, near Battle Mountain, Nevada.
Based on a gold price assumption of $1 250/oz, the PEA calculated an after-tax net present value (NPV), applying a 5% discount rate, of $143-million.
The assessment estimated a life-of-mine (LoM) capital cost of $114.4-million, after pre-development costs of $25.8-million and mine construction capital of $46.6-million. After-tax cash flows result in a four-year payback.
The post-tax internal rate of return comes in at 48%, which is extremely appealing.
The PEA outlines a 2.93-million-ton production plan, at an average grade of 0.31 oz/t gold, to produce 740-million ounces of gold over an eight-year mine life.
The cost profile includes an average cash cost of $788/oz of gold sold, and an all-in-sustaining cost of $897/oz, both figures net of by-product credits. Output will average 92 400 oz/y over the eight-year mine life.
"This PEA sets the stage for the company's planned advanced-exploration initiative at Cove. These results support our plan for the construction of an exploration ramp to further define and expand the deposits in advance of a future feasibility study,” stated president and CEO Ewan Downie.
The property lies west of the central part of the Battle Mountain-Eureka Trend and hosts four distinct styles of mineralisation: Carlin-style, polymetallic sheeted veins, carbonate replacement (Manto), and skarn. The Helen, CSD Gap and CSD deposits are Carlin-style deposits, while the 2201-VG zone is comprised of steeply dipping polymetallic sheeted veins.
According to the report, there are three roasting facilities and two pressure oxidation facilities located in northern Nevada that are amenable to processing the Cove ore. The PEA incorporates toll-milling arrangements with associated over-the-road trucking costs for both process methods.
The PEA assumes mining of mineral resources in the Helen and Gap deposits only, and is based on compliant indicated resources of 1.05-million tons grading 0.33 oz/t gold, and 0.86 oz/t silver, for 342 000 oz of gold and 900 000 oz of silver. Inferred resources stand at 4.03-million tons, grading 0.33 oz/t gold and 0.61 oz/t silver, for 1.32-million ounces of gold and 2.46-million ounces of silver.
The PEA pointed to potential to increase the mineral resources as the deposits remain open for expansion, while it is conceivable that resources from the Cove South Deep and 2201 Zones will be added, following underground exploration and delineation drilling, the company said.
These opportunities will be reviewed during underground development and an exploration drilling programme.
The Cove project is fully permitted under an environmental assessment (EA) to develop an exploration ramp, complete underground diamond drilling, and to test mine up to 120 000 t of potentially economic mineralisation, the company said.
The PEA assumes that a new EA will be required in order to dewater ahead of mining in the Helen zone, and baseline data collection, permitting and bonding is slated for completion early in 2021, with the Gap zone also requiring dewatering and an accompanying environmental-impact statement will be required, for which baseline data collection will be complete around the second quarter of 2024.
The company indicated that it will continue to refine the hydrological model and development of the exploration decline to support underground diamond drilling to upgrade and add resources.
Baseline studies, permitting and a feasibility study are planned for 2019/20.
The company’s TSX-listed equity took a beating on Tuesday, as gold tumbled to its lowest level so far this year, as US dollar strength undermines the metal’s safe haven allure. The stock closed down 5.63% at C$2.85 a share.