Further to its news release of March 6, 2013, Abitibi Royalties Inc. ((TSX
VENTURE:RZZ), hereinafter "Abitibi Royalties" or the "Company") is pleased to
announce that it has received a technical report (the "Report") of the audit
completed by Micon International Limited ("Micon") of the year-end 2012 gold
reserve and resource estimate completed by Osisko Mining Corp. ("Osisko")
limited to the Mammoth/Barnat and Jeffrey zones located on the Malartic CHL
Property . The Malartic CHL Property is the object of a joint venture with
Osisko in which Abitibi Royalties holds a 30% free carried interest.
A copy of the Report has been filed with the regulators and is available for
viewing through the Internet under the Company's issuer profile on the SEDAR
website at www.sedar.com.
The gold reserves and resources from the Malartic CHL Property contained in the
Report and as previously reported in the Company's March 6, 2013 news release
are reproduced at the end of this press release for reference.
In addition, Micon included an economic analysis consisting of a preliminary,
before tax, cash flow evaluation of the three zones, Gouldie, Mammoth/Barnat and
Jeffrey. A gold price of $1,450/oz was used. Please refer to the Report for the
assumptions and disclaimers set out by Micon in preparing the cash flow
estimates as summarized below:
Table 22.2
Mammoth/Barnat and Jeffrey Cash Flow
----------------------------------------------------------------------------
BARNAT Year -2 Year -1 Year 1(i) Year 2 Year 3 Total
----------------------------------------------------------------------------
Waste (000t) 2,000 3,500 2,000 7,500
Ore (000t) 415 800 800 2,015
Grade (g/t) 0.94 0.94 0.94 0.94
Gold (Ounces) 12,543 24,180 24,180 60,904
Metallurgical Recovery
(%) 88.12 88.12 88.12 88.12
Recovered Gold (Ounces) 11,053 21,307 21,307 53,668
Gross Revenue ($000) 16,027 30,896 30,896 77,819
Less Ref. Cost
@$4.25/Oz($000) 47 91 91 228
Net Revenue ($000) 15,980 30,805 30,805 77,591
Less: Ore based Costs
@$11.07/t ($000) 4,594 8,856 8,856 22,306
Less: Mining Cost
@$2.40/t ($000) 5,796 10,320 6,720 22,836
Barnat Cash Flow ($000) 5,590 11,629 15,229 32,449
30% of BCF ($000) 1,677 3,489 4,569 9,735
NPV @5% ($000) 8,708
JEFFREY Year -2 Year -1 Year 1(i) Year 2 Year 3 Total
----------------------------------------------------------------------------
Waste (000t) 800 1,800 1,067 3,667
Ore (000t) 600 1,500 1,295 3,395
Grade (g/t) 0.73 0.73 0.73 0.73
Gold (Ounces) 14,084 35,209 30,397 79,690
Metallurgical Recovery
(%) 82 82 82 82
Recovered Gold (Ounces) 11,549 28,871 24,926 65,346
Gross Revenue ($000) 16,745 41,864 36,142 94,751
Less Ref. Cost
@$4.25/Oz($000) 49 123 106 278
Net Revenue ($000) 16,696 41,741 36,036 94,473
Less: Ore Based Costs
@$11.60/t ($000) 6,960 17,400 15,022 39,382
Less: Mining Cost
@$2.40/t ($000) 3,360 7,920 5,669 16,949
Jeffrey Cash Flow ($000) 6,376 16,421 15,345 38,143
30% of JCF ($000) 1,913 4,926 4,604 11,443
NPV @5% ($000) 10,267
(i) - Expected to be 2015
"Based on the above economic analysis, and subject to the assumptions made by
Micon, the aggregate net present value of Abitibi Royalties' share of the cash
flow from the CHL property is estimated by Micon to be $18.9 million - which is
approximately four times greater than our current market capitalization", said
Glenn Mullan, President and CEO. "In addition, the Gouldie Zone (in which
Abitibi Royalties has a 2% net smelter royalty)is expected to provide cash flow
to the Company starting in November of this year based on Osisko's operating
budget", said Mr. Mullan.
Micon also included an economic analysis of Abitibi Royalties' net smelter
return royalty on the Gouldie Zone as part of the Report as summarized below:
Table 22.1
Gouldie NSR Cash Flow
2013 2014 Total
------------------------------
GOULDIE
Ore (000t) 296 871 1167
Grade (g/t) 0.842 0.947 0.92
Gold (Ounces) 8,014 26,522 34,522
Metallurgical Recovery (%) 80.84 80.84 80.84
Recovered Gold (Ounces) 6,478 21,440 27,908
Gross Revenue ($000) 9,394 31,089 40,466
Less Refining Cost @$4.25/Oz ($000) 28 91 119
Net Smelter Return ($000) 9,366 30,998 40,348
2% of NSR ($000) 187 620 807
NPV @5% ($000) 741
The above cash flows are conceptual in nature, as estimated by Micon. They do
not reflect the fact that ore from the Malartic CHL property will be milled in
conjunction with ore from the Canadian Malartic mine and is subject to the
scheduling requirements of that much larger operation and various logistical
concerns related to that operation. Actual NSR and NPV may vary from these
amounts shown. Their purpose is to justify classification of the mineralization
as a reserve. For the above analyses, the average grade of the deposit has been
inserted into the variable recovery equations for the Mammoth/Barnat and Gouldie
deposits to determine recoveries to be used.
Abitibi Royalties Recovers Bourdon Prospects
In other news, the Company announces that the option agreement (the "Agreement")
pursuant to which each of Noront Resources Ltd. and White Pine Resources Inc.
(together the "Optionees") can earn a 35% interest in the Luc Bourdon and
Bourdon West Prospects (the "Bourdon Prospects") has been terminated as a result
of the Optionees failing to incur the exploration expenditures required under
the Agreement by the due date, and failing to cure the default within 60 days of
Abitibi Royalties' notice to each of them to this effect. As a result, Abitibi
Royalties retains a 100% interest in the Bourdon Prospects. The Bourdon
Prospects are located in the Ring of Fire area, McFaulds Lake, Ontario.
CHL Property Reserve and Resource Summary
Table 1.1 - Mammoth/Barnat Mineral Resource Estimate
----------------------------------------------------------------------------
Grade Contained
Category Area Tonnes (g/t Au) Oz
----------------------------------------------------------------------------
Measured Resource Mammoth/Barnat 229,300 1.02 7,523
----------------------------------------------------------------------------
Total Measured Resource 229,300 1.02 7,523
----------------------------------------------------------------------------
Indicated Resource Mammoth/Barnat 1,842,200 0.77 45,574
----------------------------------------------------------------------------
Total Indicated Resource 1,842,200 0.77 45,574
----------------------------------------------------------------------------
Measured & Indicated Resource Mammoth/Barnat 2,071,600 0.80 53,097
----------------------------------------------------------------------------
Total M&I Resource Mammoth/Barnat 2,071,600 0.80 53,097
----------------------------------------------------------------------------
Inferred Resource Mammoth/Barnat 1,433,700 1.06 48,965
----------------------------------------------------------------------------
Table 1.2 - Jeffrey Zone Mineral Resource Estimate
----------------------------------------------------------------------------
Grade Contained
Category Area Tonnes (g/t Au) Oz
----------------------------------------------------------------------------
Measured Resource Jeffrey - - -
----------------------------------------------------------------------------
Total Measured Resource - - -
----------------------------------------------------------------------------
Indicated Resource Jeffrey 5,269,000 0.65 110,696
----------------------------------------------------------------------------
Total Indicated Resource 5,269,000 0.65 110,696
----------------------------------------------------------------------------
Measured & Indicated Resource Jeffrey 5,269,000 0.65 110,696
----------------------------------------------------------------------------
Total M&I Resource 5,269,000 0.65 110,696
----------------------------------------------------------------------------
Inferred Resource Jeffrey 376,200 0.90 10,842
----------------------------------------------------------------------------
Table 1.3 - Gouldie Mineral Resource Estimate
The following resources are in addition to Reserves noted above:
----------------------------------------------------------------------------
Grade Contained
Category Area Tonnes (g/t Au) Oz
----------------------------------------------------------------------------
Measured Resources Gouldie 843,700 1.17 31,816
----------------------------------------------------------------------------
Indicated Resources Gouldie 4,662,800 0.96 143,815
----------------------------------------------------------------------------
Measured & Indicated Resources Gouldie 5,506,500 0.99 175,631
----------------------------------------------------------------------------
Inferred Resources Gouldie 857,800 0.83 22,935
----------------------------------------------------------------------------
(1) Mineral Reserves are reported at a commodity price of US$1,475/oz Au
for Gouldie and Barnat and $1,450/oz Au for Jeffrey, and have an
effective date of December 31, 2012. Tonnages have been rounded to
nearest hundred tonnes. Numbers may not add up due to rounding.
(2) Mineral Resources are reported exclusive of Mineral Reserves and are
determined by Ordinary Kriging and a variable cut-off grade ranging
from 0.31 to 0.34 g/t Au. Mineral Resources that are not Mineral
Reserves do not have demonstrated economic viability.
(3) Rounding as required by reporting guidelines may result in apparent
summation differences between tonnes, grade and contained metal
content.
(4) Tonnage and grade measurements are in metric units. Contained gold
ounces are reported as troy ounces.
(5) Mineral Resources have been classified following the standards and
definitions of the CIM.
Table 1.4 - Mammoth/Barnat Zone Mineral Reserves
----------------------------------------------------------------------------
Ore Grade Contained
Category Area Tonnes (Au g/t) Oz
----------------------------------------------------------------------------
Proven Reserve Mammoth/Barnat 376,300 0.93 11,200
----------------------------------------------------------------------------
Probable Reserve Mammoth/Barnat 1,638,300 0.94 49,447
----------------------------------------------------------------------------
Proven & Probable Reserve Mammoth/Barnat 2,014,600 0.94 60,647
----------------------------------------------------------------------------
Table 1.5 - Jeffrey Zone Mineral Reserves
----------------------------------------------------------------------------
Ore Grade Contained
Category Area Tonnes (Au g/t) Oz
----------------------------------------------------------------------------
Proven Reserve Jeffrey - - -
----------------------------------------------------------------------------
Probable Reserve Jeffrey 3,395,200 0.73 79,249
----------------------------------------------------------------------------
Proven & Probably Reserve Jeffrey 3,395,200 0.73 79,249
----------------------------------------------------------------------------
Table 1.6 - Gouldie Zone Mineral Reserves
----------------------------------------------------------------------------
Ore Grade Contained
Category Area Tonnes (Au g/t) Oz
----------------------------------------------------------------------------
Proven Reserves Gouldie 666,800 0.99 21,151
----------------------------------------------------------------------------
Probable Reserves Gouldie 500,300 0.83 13,321
----------------------------------------------------------------------------
Proven & Probable Reserves Gouldie 1,167,100 0.92 34,472
----------------------------------------------------------------------------
(1) Mineral Reserves are reported at a commodity price of US$1,475/oz Au
for Gouldie and Barnat and $1,450/oz Au for Jeffrey, and have an
effective date of December 31, 2012.Tonnages have been rounded to
nearest hundred tonnes.Numbers may not add up due to rounding.
(2) Rounding as required by reporting guidelines may result in apparent
summation differences between tonnes, grade and contained metal
content.
(3) Tonnage and grade measurements are in metric units. Contained gold
ounces are reported as troy ounces.
(4) A Proven Reserve is economically minable part of a Measured Mineral
Resource. It includes diluting materials and allowances for losses
which occur when the material is mined. A Proven Reserve represents the
highest confidence category of reserve estimate.
(5) A Probable Reserve is the economically minable part of Indicated
Mineral Resource. It includes diluting material and allowances for
losses which may occur when the material is mined. A Probable Ore
Reserve has a lower level of confidence than a Proven Reserve but is of
sufficient quality to serve as the basis for decision on the
development of deposit.
(6) Mineral Reserves have been classified following the standards and
definitions of the CIM.
Qualified Person
Mr. Donald Gervais is the qualified person, as defined in NI 43-101, who has
reviewed and is responsible for the technical information in this new release,
including verification of the data disclosed, the sampling, and the analytical
QA-QC data underlying the technical information. Resources and Reserves have
been classified following the standards and definitions of the CIM.
About Micon International
Since 1988, Micon International has provided consulting services to the
international mining industry with particular focus upon mineral resource
estimations, metallurgical services, mine design and production scheduling,
preparation of pre-feasibility and feasibility studies, independent reviews of
mining and mineral properties, project monitoring, independent engineer roles,
financial analysis and litigation support. Micon's clients include mining and
mineral exploration companies, financial institutions and government agencies
from around the world. A particular expertise has been developed in the economic
evaluation of mining properties, including studies in support of debt and equity
financing. Micon's professional staff has the experience, education and
professional credentials to act as Qualified Persons and/or Competent Persons,
as required by world-wide regulatory agencies.
About Abitibi Royalties Inc.
Abitibi Royalties holds title to the Luc Bourdon and Bourdon West Prospects
(also known as the McFaulds Lake Property) and a 30% free carried interest on
the Malartic CHL Property which is the object of a joint venture with Osisko. In
addition, the Company holds a 2% net smelter royalty interest in one claim held
by Osisko, and may acquire and generate other property and royalty interests.
Forward Looking Statements:
This news release contains certain statements that may be deemed
"forward-looking statements. Forward looking statements are statements that are
not historical facts and are generally, but not always, identified by the words
"expects", "plans", "anticipates", "believes", "intends", "estimates",
"projects", "potential" and similar expressions, or that events or conditions
"will", "would", "may", "could" or "should" occur. Although the Company believes
the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance
and actual results or realities may differ materially from those in forward
looking statements. Forward looking statements are based on the beliefs,
estimates and opinions of the Company's management on the date the statements
are made. Except as required by law, the Company undertakes no obligation to
update these forward-looking statements in the event that management's beliefs,
estimates or opinions, or other factors, should change.
FOR FURTHER INFORMATION PLEASE CONTACT:
Glenn J. Mullan
Chief Executive Officer
819-824-2808, x 1222
glenn.mullan@goldenvalleymines.com
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