Vancouver-headquartered Corvus Gold is considering developing the North Bullfrog project, in south-west Nevada, as a standalone mine to provide capital for its second potential mining project, the Mother Lode deposit.
The company on Wednesday announced the results of two preliminary economic assessments (PEAs) for North Bullfrog and Mother Lode. It previously mulled a combined project and in 2018 announced a PEA for the Bullfrog-Mother Lode project.
Corvus president and CEO Jeffrey Pontius said the PEA for a standalone Bullfrog project demonstrated the potential to produce nearly 147 000 oz/y of gold and 400 000 oz/y of silver at an all-in sustaining cost of $737/oz of gold.
At a gold price of $1 500/oz, the PEA forecasts free cash flow of $763-million, a post-tax net present value (NPV), at a 5% discount, of $452-million with an internal rate of return (IRR) of 47%.
The company pointed out that the financial performance of the North Bullfrog project PEA as a standalone project, at its base case $1 500 gold price produced comparable results to the overall previously announced combined North Bullfrog-Mother Lode project PEA reported in November 2018 at its base case, $1 250/oz gold price.
Corvus sees the North Bullfrog project as a development option to advance gold production in the Bullfrog mining district.
"The greater Bullfrog District is seeing a resurgence of exploration activity with multiple mining companies conducting large scale drilling programmes and new discoveries being made. The North Bullfrog PEA study has highlighted a re-emergence of the Bullfrog gold district and with Corvus Gold’s commanding land position we believe we have the district’s dominant asset base with excellent growth potential for our shareholders," said Pontius.
The North Bullfrog project is modelled as a large openpit, run-of-mine, heap leach operation with a grinding circuit for gravity gold recovery of the high-grade YellowJacket vein and stockwork deposit. The mining plan uses standard mining practices and has a production scale that is currently being used by many operating openpit mines in Nevada.
Meanwhile, the PEA for the standalone Mother Lode project, about 10 km from North Bullfrog, also yielded encouraging results.
The initial PEA indicates robust economics at a gold price of $1 500/oz with pre-tax free cash flow of $564-million, an NPV of $303-million and an IRR of 23%.