JOHANNESBURG (miningweekly.com) – TSX-V and ASX-listed Atlantic Gold has published the results of a preliminary economic analysis (PEA) of its Novia Scotia projects, outlining two potential gold development scenarios for the Canadian assets.

Chairperson Steven Dean said the base case and base-plus-Cochrane case, both of which involve openpit production scenarios over a minimum eight year mine life, returned strong economic scenarios.

The base case focused on the initial development and production at the fully permitted Touquoy project, followed by production from Beaver Dam – a satellite operation – in year five. The base-plus-Cochrane case would add production from the Cochrane Hill deposit in year three. In this production scenario, Cochrane Hill would be a largely independent and self-contained operation, unlike Beaver Hill. The mine would supply gravity and float concentrate to the Touquoy facility.

Under the PEA base case scenario, production would come to about 702 000 oz of gold over the mine life, or an average of 87 700 oz/y. The base-plus-Cochrane case would produce 1.13-million ounces over the mine life, equating to 141 000 oz/y.

The base case study delivered life-of-mine (LoM) cash operating costs of C$576/oz and LoM all-in sustaining costs of C$653/oz. Adding Cochrane Hill to the mix changed the cost estimates to C$612/oz for the LoM cash operating costs and C$684/oz for LoM all-in sustaining cost.

Both scenarios required an initial capital cost of C$131-million, but a further C$108-million would be required for the Cochrane Hill mine development.

Using a gold price of $1 300/oz, the post-tax net present value (NPV) of the base case scenario was C$163-million, and the NPV of the base-plus-Cochrane case was C$242-million.

Dean said the base case was relatively insensitive to gold price, but the base-plus-Cochrane case provided upside leverage to the gold price.

With more than C$20-million in the treasury, Atlantic was well financed and poised to advance the development of the projects in the coming months, the chairperson said.

He added that Atlantic would prepare a feasibility study, set for completion in the second quarter of 2015, continue resource definition drilling at Beaver Dam and Cochrane Hill and advance environmental impact assessment and permitting for Beaver Dam and Cochrane Hill.

The company has engaged Conestoga Rovers and Associates to advance the Beaver Dam and Cochrane Hill projects through the required permitting process. The first stage of environmental review work has already started and Atlantic was aiming to have all required permits, including the industrial approvals for Beaver Dam in place by the end of 2015, and Cochrane Hill in mid-2016.

The environmental approval process in respect of Beaver Dam was expected to be less onerous than traditional projects given the project's limited infrastructure and lack of processing and tailings requirements.

Other focus areas for the coming months would be securing development financing and agreeing a mutual benefits deal with the Mi’kmaq community.