TORONTO, Sept. 9, 2013 /CNW/ - Moss Lake Gold Mines Ltd.
(TSX-V: MOK) has filed its independent 43-101 Preliminary Economic
Analysis (PEA). It is available at www.sedar.com.
By definition a PEA is preliminary in nature; it
includes Inferred Mineral Resources that are too speculative
geologically to have economic conditions applied to them that would
enable them to be characterized as mineral reserves, and there is
no certainty that the PEA will be realized.
Management believes this study provides a
reasonable basis to assess the potential economic viability of the
Moss Lake gold deposit. The deposit has seen considerable
drilling and has been subject to underground development the
results of which support interpreted continuity of gold
mineralization in a portion of the deposit.
Highlights of the study, as previously disclosed
in a Press Release dated July 29,
2013 (www.mosslakegold.com) are restated below.
Mining/Processing
- Open pit mining and CIL Processing at 40,000 tonnes per
day
- Life-of-mine waste:ore stripping ratio of 2.5:1
- Four-year permitting/pre-production period
- Ten-year minelife averaging 244,000 ounces per year
-
- Years 1 - 5 average 296,000 ounces per year
- Years 6 - 10 average 192,000 ounces per year
- Pre-Production Capital Costs of $543
million
- Operating Costs of $17.56 Cdn per
tonne or $922 Cdn per ounce
- Payback period - 2 years
Key
Assumptions
|
- Milling recoveries of 79.2% and 84.2%
- Low grade stockpiles with marginal or mill cut-off grades of
0.32 to 0.38 gAu/tonne to be processed
- Expected accuracy of capital cost estimates of ± 35%
|
Economics
- After Tax Cumulative Cash Flow: $440 million
- After Tax Net Present Value (NPV): $196 million at 5% discount rate
- After Tax Internal Rate of Return (IRR): 12%
Key
Assumptions
|
- Average gold price of US$ 1,546/oz and exchange rate of 1.0033
$Cdn/1.0 $US (3-year trailing average as at May 31, 2013)
- Royalty of 8.75% of Net Profit paid
- Ontario Mining Tax rate 10%
- Income Tax rate 26.5% (15% federal and 11.5% provincial)
|
Sensitivity Analysis
After Tax
Cumulative Cash Flow (million$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-20% |
-15% |
-10% |
-5% |
Base Case
Scenario |
+5% |
+10% |
+15% |
20% |
PRODUCTION
PARAMETERS |
Gold price (CAN$/oz) |
1 241 |
1 318 |
1 396 |
1 473 |
1 551 |
1 629 |
1 706 |
1 784 |
1 861 |
|
Gold Price |
-98.17 |
39.49 |
185.40 |
315.42 |
440.13 |
561.07 |
681.81 |
802.21 |
910.00 |
|
|
Change (%) |
-122% |
-91% |
-58% |
-28% |
|
27% |
55% |
82% |
107% |
ECONOMIC
PARAMETERS |
|
OPEX |
732.30 |
659.63 |
586.53 |
513.43 |
440.13 |
365.02 |
285.24 |
204.46 |
120.78 |
|
|
Change (%) |
66% |
50% |
33% |
17% |
|
-17% |
-35% |
-54% |
-73% |
|
CAPEX |
546.14 |
519.67 |
493.21 |
466.67 |
440.13 |
412.42 |
384.51 |
356.14 |
327.48 |
|
|
Change (%) |
24% |
18% |
12% |
6% |
|
-6% |
-13% |
-19% |
-26% |
After Tax NPV at
5% (million$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-20% |
-15% |
-10% |
-5% |
Base Case
Scenario |
+5% |
+10% |
+15% |
20% |
PRODUCTION
PARAMETERS |
Gold price
(CAN$/oz) |
1 241 |
1 318 |
1 396 |
1 473 |
1 551 |
1 629 |
1 706 |
1 784 |
1 861 |
|
Gold Price |
-158.18 |
-69.03 |
27.90 |
113.53 |
196.18 |
276.07 |
356.01 |
434.90 |
505.38 |
|
|
Change (%) |
-181% |
-135% |
-86% |
-42% |
|
41% |
81% |
122% |
158% |
ECONOMIC
PARAMETERS |
|
OPEX |
382.57 |
336.22 |
289.63 |
243.04 |
196.18 |
148.13 |
97.59 |
46.44 |
-6.36 |
|
|
Change (%) |
95% |
71% |
48% |
24% |
|
-24% |
-50% |
-76% |
-103% |
|
CAPEX |
288.69 |
265.59 |
242.50 |
219.37 |
196.18 |
171.93 |
147.53 |
122.75 |
97.74 |
|
|
Change (%) |
47% |
35% |
24% |
12% |
|
-12% |
-25% |
-37% |
-50% |
After Tax IRR
(million$)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-20% |
-15% |
-10% |
-5% |
Base Case
Scenario |
+5% |
+10% |
+15% |
20% |
PRODUCTION
PARAMETERS |
Gold price
(CAN$/oz) |
1 241 |
1 318 |
1 396 |
1 473 |
1 551 |
1 629 |
1 706 |
1 784 |
1 861 |
|
Gold Price |
-5% |
2% |
6% |
10% |
12% |
15% |
17% |
19% |
21% |
|
|
Change (%) |
-140% |
-84% |
-48% |
-20% |
|
20% |
36% |
52% |
68% |
ECONOMIC
PARAMETERS |
|
OPEX |
18% |
16% |
15% |
14% |
12% |
11% |
9% |
7% |
5% |
|
|
Change (%) |
41% |
31% |
22% |
11% |
|
-12% |
-27% |
-43% |
-63% |
|
CAPEX |
18% |
16% |
15% |
14% |
12% |
11% |
10% |
9% |
8% |
|
|
Change (%) |
41% |
29% |
19% |
9% |
|
-9% |
-17% |
-26% |
-33% |
Potential Upside
- Gold price appreciation - longterm
- High potential to increase resources with further drilling
- First mover infrastructure advantage in the highly prospective
Shebandowan greenstone belt
- Decrease in $Cdn/$US exchange rates to more longterm historic
levels
Potential Risks
- Hydrology and surface water treatment strategies require more
study, the results of which could impact cost estimates
- Gold price deterioration - longterm
- Public support - by all concerned parties and stakeholders -
for responsible economic development in this region
Independence and Expertise
This study was led by independent consulting
company InnovExplo of Val d'Or,
Quebec. Mining engineering input was from principal
author Sylvie Poirier, Ing (OIQ
No.112196, PEO No.100156918 of InnovExplo. Geology and
resource estimates were performed by Pierre-Luc Richard, MSc, PGeo (APGO No.1714, OGQ
No.1119) also of InnovExplo. Julie
Palich, MSc, PGeo (APGO No.1880, AusIMM No.301564) of
Caracle Creek Consulting provided Environmental Studies, permitting
and Social and Community Impact inputs. All metallurgical and
mineral processing expertise was provided by Gary Patrick, BSc (AusIMM No.108090) Consulting
Metallurgist of Metallurg Pty Ltd., Perth, Australia. These contributors are
all independent of the issuer and "Qualified Persons" as defined by
Regulation 43-101, National Instrument 43-101 and Form
43-101F1.
More Details
To provide more detail, the "Summary" section of
the Preliminary Economic Analysis report follows in its
entirety. The complete report is now filed on SEDAR
(www.sedar.com).
ABOUT MOSS LAKE GOLD MINES LTD.
Moss Lake Gold Mines Ltd. was created in 1994 to
consolidate ownership of the Moss Lake gold deposit. It is a
57.6%-owned subsidiary of Wesdome Gold Mines Ltd. which currently
owns and operates the Eagle River Gold Mine, the Mishi Gold Mine
and the Kiena Gold Mine.
Moss Lake trades on the TSX Venture Exchange
under the symbol "MOK" and currently has 47 million common shares
issued and outstanding.
Neither 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 release.
This news release includes certain
forward-looking statements concerning the future performance of
Moss Lake's business, operations and financial performance and
condition, as well as management's objectives, strategies, beliefs
and intentions. Such statements include, but are not limited
to, statements concerning the intention of Wesdome to convert the
Note. Forward-looking statements are frequently identified by
such words as "may", "will", "plan", "expect", "anticipate",
"estimate", "intend" and similar words referring to future events
and results. Forward-looking statements are based on the current
opinions and expectations of management. All forward-looking
information is inherently uncertain and subject to a variety of
assumptions, risks and uncertainties, including the speculative
nature of mineral exploration and development, fluctuating
commodity prices, competitive risks and the availability of
financing, as described in more detail in recent securities filings
available at www.sedar.com. Actual events or results may differ
materially from those projected in the forward-looking statements
and Moss Lake cautions against placing undue reliance
thereon. Moss Lake and its management assume no obligation to
revise or update these forward looking statements.
SOURCE Moss Lake Gold Mines Ltd.