GoldQuest Reports Positive Preliminary Economic Assessment for the
Romero Gold-Copper Project, Dominican Republic
90,000 Ounces of Gold per Year for an All-In Sustaining Cost of
$353/Ounce
VANCOUVER, BC--(Marketwired
- May 27, 2014) - GoldQuest Mining Corp. (TSX-VENTURE: GQC)(FRANKFURT: M1W)(BERLIN:
M1W) ("GoldQuest" or the "Company") is pleased to report
positive results from the un-optimized Preliminary Economic
Assessment ("PEA") for a proposed underground mine at its 100%
owned Romero and Romero South Gold-Copper Deposits in the Dominican
Republic. The PEA study was led by Micon International Limited
("Micon"). All costs are in US dollars.
PEA Highlights:
- A 15 year underground mine producing an average of 90,000
ounces of payable gold and 15.6 million lbs. of payable copper for
each year of full production in two concentrates from 3,800 tonnes
per day (129,000 ounces of gold equivalent ("AuEq"))
- All-in sustaining costs ("AISC"), net of copper and minor
silver by-products, of $353/oz for 90,000 ounces of gold per year
consisting of on-site operating cash costs (net of by-product
credits of $557/oz) of $153, concentrate transportation and
Treatment Charges /Refining Charges ("TC/RCs") costs of $147/oz,
royalties of $21/oz and sustaining capital of $32/oz
- Metal recoveries are estimated to be 83% for gold and 91% for
copper resulting, after allowing for transportation and TC/RCs, in
net payable gold of 79.2% and net payable copper of 86.5%
- Total Life of Mine ("LOM") revenue of $2.35 billion, an
undiscounted pre-tax cash flow of $0.86 billion ($0.60 billion post
tax), producing 1.26 million ounces of payable gold (1.81 million
payable ounces of AuEq.) from processing 18.5 million tonnes
grading 2.69 g/t and 0.61% copper with a Net Smelter Return of $117
per tonne and cash operating costs of $58.69 per tonne
- Total LOM capital cost of $374 million, which includes an
initial capital cost of $333.5 million and a sustaining capital
cost of $40.4 million
- Pre-tax Internal Rate of Return ("IRR") of 19.7% (15.1% after
tax)
- Pre-tax Net Present Value ("NPV") of $318 million based on an
8% discount rate ($176 million after tax)
- Pre-tax NPV of $471 million based on a 5% discount rate ($274
million after tax)
- PEA completed only 2 years after discovery
- Of the mineral resources used in the PEA mine plan, 80% are
from the indicated category
- The PEA contemplates an environmentally sensitive approach,
including a small surface footprint and no use of cyanide on site,
seeking to minimize the impact on the environment and the local
communities
"We are proud to deliver a positive PEA for the Romero Project,
our cornerstone asset in the Dominican Republic," commented Chief
Executive Officer, Julio Espaillat. "Building on our low net All-In
Sustaining Costs, we are actively addressing the capital intensity
issues of the Romero project through ongoing optimization studies.
We also hope to add value through discovery of new resources, which
is the focus of our 10,000 metre 2014 exploration drilling
program."
The PEA is preliminary in nature, 20% of the mine plan consists
of inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves, and
there is no certainty that the results of the PEA will be
realized. Mineral resources that are not mineral reserves do
not have demonstrated economic viability.
PEA Parameters and Inputs:
The following table is a summary of the PEA parameters or
inputs:
|
|
|
|
|
PEA Parameters |
|
Measure Criteria |
|
Input |
Metal Grades |
|
Unit |
|
Average Grade |
|
Gold |
|
g/t |
|
2.69 |
|
Copper |
|
% |
|
0.61 |
Metal Prices |
|
|
|
|
|
Gold |
|
US$/oz. |
|
$1300 |
|
Copper |
|
US$/lb. |
|
$3.25 |
|
Silver |
|
US$/oz |
|
$22 |
Exchange Rates |
|
|
|
|
|
CAD/USD |
|
Today's rate |
|
0.90 |
Taxation |
|
Taxable Income |
|
Income Tax Rates |
|
Dominican Republic |
|
Federal |
|
25% |
|
|
Environmental |
|
5% |
Third Party Royalties |
|
Net Smelter Royalty |
|
1.25% |
|
|
|
|
|
The following table is a summary of the PEA results:
|
|
|
|
Life of Mine Average |
US$ millions LOM |
US$/t milled |
US$/oz. gold |
Gross Revenue |
|
|
|
Gold |
|
|
1,300 |
Copper |
|
|
549 |
Silver |
|
|
8 |
TOTAL |
2,348 |
127 |
1,857 |
Operating Costs |
|
|
|
|
Mining Costs |
584 |
31.61 |
462 |
|
Processing Costs |
281 |
15.24 |
223 |
|
General & Administrative Costs |
33 |
1.76 |
26 |
|
On Site Costs sub-total |
|
|
|
|
LESS By-Product Credits |
|
|
710 |
|
Total |
|
|
-557 |
|
|
897 |
48.62 |
153 |
|
Add: |
|
|
|
|
Smelting and Refining Charges |
186 |
10.07 |
147 |
Cash Operating Costs |
1,083 |
58.69 |
301 |
Net Operating Margin |
1,264 |
68.50 |
1,558 |
|
|
|
|
Royalties |
27 |
1.46 |
21 |
Sustaining Capital |
40 |
2.19 |
32 |
All in Sustaining Cost |
1,151 |
62.34 |
353 |
Capital Expenditure (initial) |
333 |
18.07 |
264 |
Pre-tax Cash Flow |
864 |
46.78 |
683 |
Taxation |
269 |
14.55 |
212 |
Net Cash Flow After Tax |
595 |
32.23 |
471 |
|
|
|
|
The following figure presents the PEA sensitivities, showing
leverage to metals prices being the most important variable:
Link to figure:
http://www.goldquestcorp.com/images/press_release/GQC_PEA-sensitivitiesgraph.png
Mineral Resources:
The basis for the PEA is the mineral resource estimate prepared
by Micon as set out in the Company's National Instrument 43-101
("NI 43-101") report dated December 13, 2013 and effective October
29, 2013 entitled "A Mineral Resource Estimate for the Romero
Project, Tireo Property, Province of San Juan, Dominican Republic",
which was filed on SEDAR on December 13, 2013. Please refer to
the technical report for further information regarding the mineral
resource estimate. For the purposes of reporting the mineral
resources, Micon selected a net smelter returns ("NSR") cut-off of
US$60 (operating cost/commodity price weighted recovery) as an
estimate of what might be a reasonable marginal cost of extraction
at Romero and US$50 as the marginal cost of extraction at Romero
South. Metal prices used were Au = US$1,400/oz., Ag =
US$22.50/oz., Cu = US$3.18/lb. and Zn = US$0.95/lb.
A summary of this resource is:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Category |
|
Zone |
|
Tonnes |
|
Au (g/t) |
|
Cu (%) |
|
Zn (%) |
|
Ag (g/t) |
|
AuEq (g/t) |
|
Au Ounces |
|
AuEq Ounces |
Indicated |
|
Romero |
|
17,310,000 |
|
2.55 |
|
0.68 |
|
0.30 |
|
4.0 |
|
3.81 |
|
1,419,000 |
|
2,123,000 |
|
|
RomeroSouth |
|
2,110,000 |
|
3.33 |
|
0.23 |
|
0.17 |
|
1.5 |
|
3.80 |
|
226,000 |
|
258,000 |
Total IndicatedMineral Resources |
|
19,420,000 |
|
2.63 |
|
0.63 |
|
0.29 |
|
3.7 |
|
3.81 |
|
1,645,000 |
|
2,381,000 |
|
Inferred |
|
Romero |
|
8,520,000 |
|
1.59 |
|
0.39 |
|
0.46 |
|
4.0 |
|
2.47 |
|
437,000 |
|
678,000 |
|
|
RomeroSouth |
|
1,500,000 |
|
1.92 |
|
0.19 |
|
0.18 |
|
2.3 |
|
2.33 |
|
92,000 |
|
112,000 |
Total InferredMineral Resources |
|
10,020,000 |
|
1.64 |
|
0.36 |
|
0.42 |
|
3.8 |
|
2.45 |
|
529,000 |
|
790,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Mineral resources that are not mineral reserves do not
have demonstrated economic viability.
Mine Plan:
The mine plan for the Romero deposit uses mechanized longhole
stoping with both ramp and shaft access. At full production,
crushed ore is hoisted to the surface at an average rate of 3,800
tpd. The mining method requires sinking and equipping the shaft,
installing the primary crusher station at the bottom of the mine
and making provision for backfill from bottom up during the
pre-production development period, which generally increases
up-front capital (lowering IRR) but results in lower sustaining
capital and lower operating costs per tonne, compared to other
operations. The mine plan includes provisions for mining losses and
dilution. Some further drilling is recommended to upgrade inferred
resources to the higher measured and indicated categories, as well
as geotechnical and metallurgical drilling as part of any
pre-feasibility study.
It is proposed that the Romero South deposit would go into
production in year 14. The mine plan takes advantage of the
deposit outcrop and requires very little waste
development. Modified room and pillar mining with backfill is
the proposed mining method. The planned production rate is
2,700 tpd and the mining is expected to continue through the third
quarter of year 15.
Processing and Metallurgy:
The processing flow sheet selected for the PEA consists of
crushing, grinding and flotation to produce two concentrates; a
copper/gold sulphide concentrate and a gold oxide concentrate,
neither of which contains any significant deleterious elements. 92%
of the total copper and 51% of the total gold reports to the copper
concentrate and 32% of the total gold reports to the gold
concentrate. Bio-oxidation will be used for the gold
concentrate only and dry stacking will be used for tailings
disposal. This flow sheet is based on extensive metallurgical
testing carried out by ALS laboratories in Kamloops BC and Perth
Australia under the supervision of Micon. Total recoveries into the
final concentrates, based on existing metallurgical test work, are
expected to be approximately 83% for gold and 91% for copper
resulting in net payable gold of 79.2% and net payable copper of
86.5%. Both concentrates will be trucked from the mine site for
further processing.
Operating Costs: The operating costs used in the PEA were
estimated from first principles using local unit rates for labour,
consumables and power where possible, and Micon's estimates for the
off site costs. The Life of Mine All-In Sustaining Costs (AISC) are
estimated to be $353/oz of Au per year, for 90,000 ounce of Au per
year, consisting of on-site operating cash costs of $153/oz, net of
copper and minor silver by-products, concentrate transportation and
TC/RC costs of $147/oz, royalties of $21/oz and sustaining capital
of $32/oz.
Capital Costs:
The pre-production capital cost is estimated to be $333.5
million, plus $40.4 million for LOM sustaining capital, for a total
estimated LOM capital cost of $374 million, for a pre-production
capital intensity of $18.07 per LOM tonne processed. Initial
capital expenditures are based on 3,800 tonnes per day (1,380,000
tonnes per year) throughput. The up-front capital costs include the
underground mine, processing facilities, infrastructure and
hydro-electric installations prior to production and include
contingencies of $52.4 million, EPCM costs of $19.8 million and
$55.4 million for infrastructure costs including the hydro-electric
installations. Project electrical requirements are estimated
at 14MW.
Sustaining capital consists of capitalized waste development
after the initial production start-up, major equipment replacement
and tailings expansions. Mining development costs during production
are included in the mining operating costs.
The estimated preproduction capital costs are summarized in the
table below.
|
|
|
|
|
|
|
|
|
Capital Costs |
|
Start Up |
|
Start Up |
|
Start Up |
|
Start Up |
US$ Thousand |
|
Minus 2 |
|
Minus 1 |
|
Year 1 |
|
Total |
Preproduction |
|
$ |
97 |
|
$ |
9,469 |
|
|
- |
|
$ |
9,566 |
Mining Capital |
|
$ |
29,892 |
|
$ |
9,316 |
|
$ |
9,078 |
|
$ |
48,286 |
Processing Capital |
|
|
- |
|
$ |
73,723 |
|
$ |
36,311 |
|
$ |
110,034 |
Infrastructure Capital* |
|
|
- |
|
$ |
48,888 |
|
$ |
6,540 |
|
$ |
55,428 |
Indirect Capital |
|
|
- |
|
$ |
44,474 |
|
$ |
7,386 |
|
$ |
51,860 |
Owner's Costs |
|
|
|
|
$ |
3,958 |
|
$ |
1,558 |
|
$ |
5,516 |
Closure Bonding |
|
|
|
|
$ |
200 |
|
$ |
200 |
|
$ |
400 |
Contingency |
|
$ |
5,978 |
|
$ |
36,072 |
|
$ |
10,359 |
|
$ |
52,409 |
Total |
|
$ |
35,967 |
|
$ |
226,099 |
|
$ |
71,433 |
|
$ |
333,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
*Includes access road, dry stack tailings storage facility, grid
power connection and hydro-electric installations.
A technical report supporting the PEA will be filed on SEDAR
within 45 days.
Qualified Person:
The technical information contained in this news release is
based upon information prepared by Messrs. Hennessey, Jacobs,
Gowans and Ms Dreesbach of Micon International Ltd., who are each a
Qualified Person and independent of GoldQuest as defined by NI
43-101.
Jeremy K. Niemi, P.Geo., VP Exploration, GoldQuest Mining Inc.,
is the Qualified Person who supervised the preparation of the
technical data in this news release.
About GoldQuest Mining Corp.
GoldQuest is a Canadian based mineral exploration company with
projects in the Dominican Republic traded on the TSX-V under the
symbol GQC.V and in Frankfurt/Berlin with symbol M1W, with
145,755,044 shares outstanding as at May 14, 2014 (160,096,563 on a
fully diluted basis, as at May 14, 2014). is actively exploring the
Tireo Project, a 50 kilometre long land package which encompasses
the Romero and Romero South deposits. The company seeks to grow
mineral resources through an aggressive exploration campaign.
Forward-looking statements:
Statements contained in this news release that are not
historical facts are forward-looking information that involves
known and unknown risks and uncertainties. Forward-looking
statements in this news release include, but are not limited to,
statements with respect to the PEA results, the proposed
underground mine, the discovery of new mineral resources, mineral
resource estimates, the merits of the Company's mineral properties,
future studies, and the Company's plans and exploration programs
for its mineral properties, including the timing of such plans and
programs. In certain cases, forward-looking statements can be
identified by the use of words such as "plans", "has proven",
"expects" or "does not expect", "is expected", "potential", "goal",
"proposed", "appears", "budget", "scheduled", "estimates",
"forecasts", "at least", "intends", "hope", "anticipates" or "does
not anticipate", or "believes", or variations of such words and
phrases or state that certain actions, events or results "may",
"could", "would", "should", "might" or "will be taken", "occur" or
"be achieved".
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such risks
and other factors include, among others, risks related to
uncertainties inherent in the preparation of the PEA and in the
estimation of mineral resources; commodity prices; changes in
general economic conditions; market sentiment; currency exchange
rates; the Company's ability to continue as a going concern; the
Company's ability to raise funds through equity financings; risks
inherent in mineral exploration; risks related to operations in
foreign countries; future prices of metals; failure of equipment or
processes to operate as anticipated; accidents, labor disputes and
other risks of the mining industry; delays in obtaining
governmental approvals; government regulation of mining operations;
environmental risks; title disputes or claims; limitations on
insurance coverage and the timing and possible outcome of
litigation. Although the Company has attempted to identify
important factors that could affect the Company and may cause
actual actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be as anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, do not place undue
reliance on forward-looking statements. All statements are made as
of the date of this news release and the Company is under no
obligation to update or alter any forward-looking statements except
as required under applicable securities laws.
Forward-looking statements are based on assumptions that the
Company believes to be reasonable, including expectations regarding
the PEA parameters and inputs, mineral exploration and development
costs; expected trends in mineral prices and currency exchange
rates; the accuracy of the Company's current mineral resource
estimates; that the Company's activities will be in accordance with
the Company's public statements and stated goals; that there will
be no material adverse change affecting the Company or its
properties; that all required approvals will be obtained and that
there will be no significant disruptions affecting the Company or
its properties.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Image Available:
http://www.marketwire.com/library/MwGo/2014/5/26/11G016183/Images/GQC_PEA-sensitivitiesgraph-990828143577.jpg
GoldQuest Mining Corp. Julio Espaillat President & Chief
Executive Officer +1-829-919-8701
jespaillat@goldquestcorp.comGoldQuest Mining Corp. Bill Fisher
Executive Chairman Office of the Chairman - Toronto +1-416-583-5606
wfisher@goldquestcorp.com www.goldquestcorp.com
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