Name of the Project
Livengood gold project.

Location
The gold project is located near Fairbanks, in Alaska, US.

Client
International Tower Hill Mines.

Project Description
The project has a measured and indicated resource of 525.38-million tonnes grading 0.68 g/t for 11.5-million ounces, while the inferred resource stands at 52.8-million tonnes grading 0.66 g/t for 1.13-million ounces.

A prefeasibility study (PFS) completed in August 2016 on an optimised configuration of the Livengood project evaluated several scenarios, ultimately selecting a project that would process 52 600 t/d and produce 6.8-million ounces of gold over 23 years, compared with 100 000 t/d in the 2013 feasibility study.

The project will process 432-million tons.

The project configuration evaluated in the PFS remains a conventional, owner-operated surface mine that will use large-scale mining equipment in a blast-load-haul operation.

Mill feed will be processed in a 52 600 t/d comminution circuit, consisting of primary and secondary crushing, and wet grinding in a single semiautogenous mill and a single ball mill, followed by a gravity gold circuit and a conventional carbon-in-leach (CIL) circuit.

The project will include a lined tailings management facility, an administration office/shop/warehouse complex, and the construction of a an 80 km, 230 kV electrical transmission line to the mine site from the existing grid power near Fairbanks, Alaska.

The total power demand is estimated at 55 MW.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Using a new base case scenario of $1 250/oz of gold, the project returns a negative after-tax net present value (NPV) of $552-million and an after-tax internal rate of return (IRR) of 0.5%, with a payback of 22.07 years. At a gold price of $1 500/oz, Livengood has a calculated after-tax NPV of $165-million, an IRR of 6.2% and capital payback period of 10.7 years.

Value
The PFS has reduced capital expenditure (capex) by 34%, or $950-million, to $1.84-billion.

The lower capex was achieved through a reduction in tonnage from 100 000 t/d to 52 600 t/d; the elimination of two previously planned freshwater supply reservoirs, owing to the inclusion of freshwater supply from a local aquifer; the elimination of a permanent accommodation camp, as a result of the planned daily transport of workers to the mine site during operations; changes in project execution strategy for the placement of large development earthworks using mine preproduction material by the owner instead of contractor and design changes to focus on bulk fills, instead of cut/fills, during construction.

Duration
Not stated.

Latest Developments
International Tower Hill Mines has corrected the reported all-in sustaining costs (AISC) metric for its Livengood project downwards by nearly 23% to conform with World Gold Council (WGC) guidance. 

The effect of the error was to overstate AISC at $1 263/oz, while the corrected figure should be $976/oz.

ITH has explained that, contrary to WGC guidance, initial capital costs and mining and income taxes had been included in the previously reported estimated AISC of $1 263/oz.

The improved configuration has reduced capital expenditure (capex) by 34%, or $950-million, to $1.84-billion, the process operating expenditures by 28%, or $2.97/t, to $7.48/t, and AISC by 16%, or $242.

A 2013 PFS had contemplated a 100 000 t/d project, which was expected to ultimately generate only a marginal positive return, even at a gold price of $1 500/oz.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
International Tower Hills Mines investor and community relations manager Rick Solie, email rsolie@ithmines.com.