Teryl Resources Corp. (TSX VENTURE: TRC)(OTCBB: TRYLF) (the
"Company") is pleased to announce it has received the preliminary
assessment for the Gil Joint Venture Gold Property, Fairbanks
Mining District, Alaska.
The measured, indicated and inferred resources contained at the
Gil/JV gold property were determined at a cutoff grade of 0.015 oz
Au/ton in order to correspond to the heap-leach ore cutoff grade
currently being employed at the Fort Knox gold mine (Table 1).
These mineral resources are not mineral reserves and therefore have
not been demonstrated to be economically viable.
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Au-Extraction Class Cutoff Avg. Au-grade
Method (Resource) (oz/ton) Above Cutoff Tons Ounces GOLD
----------------------------------------------------------------------------
Heap Leach Measured 0.015 0.0304 2,283,057.1 69,499.1
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Heap Leach Indicated 0.015 0.0279 9,571,130.0 267,408.0
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Heap Leach Inferred 0.015 0.0222 8,002,591.0 178,009.2
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TOTAL 19,856,778.0 514,916.3
The goal of this preliminary assessment was to determine a
realistic/conservative net present value (NPV) and internal rate of
return (IRR) one could expect from a hypothetical open-pit mining
operation at the Gil/JV gold property. This assessment was based on
the measured, indicated and inferred resources determined from the
pre-feasibility resource estimation (Robinson, 2011). The methods
used and assumptions made during the resource estimation were
reviewed by the Qualified Person, Mark S. Robinson (Certified
Professional Geologist #6414) and are NI 43-101 compliant.
This preliminary assessment will include inferred mineral
resources and therefore the issuer is required to provide the
following cautionary statement required by section 2.3(3)(b) of the
43-101 Instrument:
"This preliminary assessment is preliminary in nature. It
includes 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. There is no certainty that the results of this
preliminary assessment will be realized."
The Gil/JV gold property is still in the greenfields stage of
exploration. As a result, few background studies have been
conducted that relate to mining processes, engineering and expected
costs during mine preparation, production and closure. In an
attempt to avoid any error associated with a lack of information,
it was decided to omit permitting costs, costs associated with land
acquisition, exploration costs during production, and mine closure
costs in this assessment. Working capital costs are expected to be
quite low for Gil due to the assumption that all equipment and
processing facilities used already exist and will be provided by
Fort Knox. For this reason, working capital costs were included
within the annual fixed costs.
Assumptions for the Cash Flow Model for gold at $1,500 per
ounce:
Lifespan of the Open-Pit Mine = 5 years
Operating 350 Days out of the Year
Mine is able to reach full production of 6,000 Tons Ore/Day in 1st Year of
operation
Average Annual Production = 2,100,000 Tons Ore/Year (approx. 45,675 Ounces
Au/Year)
Average Au-grade = 0.029 oz/ton
Base Au-Price = $1,500/oz (Current Gold Price)
Annual Fixed Costs = $500,000/Year
Capital Cost of 5-Mile Haul Road = $5 Million
Sunk Costs from Prior Exploration Work = $10 Million
Federal and State Corporate Income Taxes will be included as a Combined
Incremental Tax Rate (a conservative approach).
Appendix A: Cash Flow Model for gold at $1,500 per ounce
Alaska State Corporate Income Tax = 9.4%
Federal Corporate Income Tax (greater than or equal to $18,333,333) =
$6,425,667 + 35% over $18,333,333
Combined Incremental Tax Rate = 0.094 + .035x(1 - 0.094) = 41.11%
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Table 3: Cash Flow Model for Gil/JV Gold Property
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Income Before Road and
Tax (BTCF - Exploration
Year BTCF (road + expl)) Income Tax Expenses ATCF
---------------------------------------------------------------------------
0 ($15,000,000) $0 $0 $0 ($5,000,000)
---------------------------------------------------------------------------
1 $34,998,400 $31,998,400 ($12,043,376) $3,000,000 $22,955,024
---------------------------------------------------------------------------
2 $34,998,400 $31,998,400 ($12,043,376) $3,000,000 $22,955,024
---------------------------------------------------------------------------
3 $34,998,400 $31,998,400 ($12,043,376) $3,000,000 $22,955,024
---------------------------------------------------------------------------
4 $34,998,400 $31,998,400 ($12,043,376) $3,000,000 $22,955,024
---------------------------------------------------------------------------
5 $34,998,400 $31,998,400 ($12,043,376) $3,000,000 $22,955,024
---------------------------------------------------------------------------
NPV =
$74,561,456
-----------
IRR = 459%
-----------
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Table 4: Net Present Value vs. Discount Rate
---------------------------------------------------------------------------
Discount Rate (i) NPV
---------------------------------------------------------------------------
3% $97,210,959
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5% $89,888,801
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7% $83,289,841
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10% $74,561,456
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These values represent 100% interest for the Gil Joint Venture
property. Therefore, 20% of the NPV determined from the Cash Flow
Model represents Teryl Resources Corp.'s portion.
Assumptions for the Cash Flow Model for gold at $1,048 per
ounce:
Lifespan of the Open-Pit Mine = 5 years
Operating 350 Days out of the Year
Mine is able to reach full production of 6,000 Tons Ore/Day in 1st Year of
operation
Average Annual Production = 2,100,000 Tons Ore/Year (approx. 45,675 Ounces
Au/Year)
Average Au-grade = 0.029 oz/ton
Base Au-Price = $1048.56/oz (3-year rolling average)
Annual Fixed Costs = $500,000/Year
Capital Cost of 5-Mile Haul Road = $5 Million
Sunk Costs from Prior Exploration Work = $10 Million
Federal and State Corporate Income Taxes will be included as a Combined
Incremental Tax Rate (a conservative approach).
Cash Flow Model
Alaska State Corporate Income Tax = 9.4%
Federal Corporate Income Tax ($10-15 Mil) = $3,400,000 + 35% over $10
Million
Combined Incremental Tax Rate = 0.094 + .035x(1 - 0.094) = 41.11%
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Base-Case Cash Flow Model for Gil/JV Gold Property - Discount Rate = 10%
---------------------------------------------------------------------------
Income Before Road and
Tax (BTCF - Exploration
Year BTCF (road + expl)) Income Tax Expenses ATCF
---------------------------------------------------------------------------
0 ($15,000,000) $0 $0 $0 ($5,000,000)
---------------------------------------------------------------------------
1 $14,378,878 $11,378,878 ($3,966,857) $3,000,000 $10,412,021
---------------------------------------------------------------------------
2 $14,378,878 $11,378,878 ($3,966,857) $3,000,000 $10,412,021
---------------------------------------------------------------------------
3 $14,378,878 $11,378,878 ($3,966,857) $3,000,000 $10,412,021
---------------------------------------------------------------------------
4 $14,378,878 $11,378,878 ($3,966,857) $3,000,000 $10,412,021
---------------------------------------------------------------------------
5 $14,378,878 $11,378,878 ($3,966,857) $3,000,000 $10,412,021
---------------------------------------------------------------------------
NPV =
$31,336,139
-----------
IRR = 207%
-----------
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Net Present Value vs. Discount Rate
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Discount Rate (i) NPV
---------------------------------------------------------------------------
3% $41,440,785
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5% $38,170,098
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7% $35,225,554
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10% $31,336,139
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These values represent 100% interest for the Gil Joint Venture
property. Therefore, 20% of the NPV determined from the Cash Flow
Model represents Teryl Resources Corp.'s portion.
Qualified Person
Mark S. Robinson, P. Geo., State of Alaska Licensed Geologist
No. 247 of Wrangell, Alaska, who is independent of the Company as
defined in NI43-101. Mark Robinson is a Certified Professional
Geologist (CPG) 6414 with the American Institute of Professional
Geologists (AIPG). Other professional societies and certifications
include: Society of Economic Geologists (SEG) fellow since 1985;
American Geological Institute (AGI); and Alaska Miners Association
(AMA). Mark Robinson is a Qualified Person as defined in NI 43-101
and also qualifies under the rules stated by the U.S. Securities
and Exchange Commission ("SEC"), and has verified the data
contained in this news release for accuracy.
ABOUT TERYL RESOURCES
To date, a total of US$10,700,000 has been expended by the joint
venture partners, with Teryl and Kinross accounting for 20% and
80%, respectively, of total expenditures.
With interests in four gold properties, Teryl Resources Corp. is
one of the main landowners in the Fairbanks Mining District,
Alaska. The Gil project is a joint venture with Kinross Gold
Corporation (80% Kinross/20% Teryl). To date USD $10.7 million has
been expended on exploration by Kinross and Teryl on the Gil joint
venture claims which expires May 31, 2011. The Company's other
Alaska holdings also include the Fish Creek Claims, 50% optioned
from Linux Gold Corp.; the Stepovich Claims, where Teryl has a 10%
net profit interest from Kinross; and a 100%-interest in the West
Ridge property. Teryl Resources Corp. also has a 30% interest and a
10% NPI in the Silverknife 1 & 2 property in Northern B.C. The
Silverknife property is contiguous to Silvercorp's Silvertip
silver-lead-zinc deposit which lies less than one km from the
property boundary. For further information visit the Company's
website at http://www.terylresources.com.
ON BEHALF OF THE BOARD OF DIRECTORS
John Robertson President
READER ADVISORY
This news release may contain certain forward-looking
statements, including management's assessment of future plans and
operations, and capital expenditures and the timing thereof, that
involve substantial known and unknown risks and uncertainties,
certain of which are beyond the Company's control. There can be no
assurance that such statements will prove accurate, and actual
results and developments are likely to differ, in some case
materially, from those expressed or implied by the forward-looking
statements contained in this press release. Readers of this press
release are cautioned not to place undue reliance on any such
forward-looking statements.
Forward-looking statements contained in this press release are
based on a number of assumptions that may prove to be incorrect,
including, but not limited to: timely implementation of anticipated
drilling and exploration programs; the successful completion of new
development projects, planned expansions or other projects within
the timelines anticipated; the accuracy of reserve and resource
estimates, if any, grades, mine life and cash cost estimates;
whether mineral resources can be developed; title to mineral
properties; financing requirements; changes in laws, rules and
regulations applicable to Teryl, and changes in how they are
interpreted and enforced, delays resulting from or inability to
obtain required regulatory approvals and ability to access
sufficient capital from internal and external sources, the impact
of general economic conditions in Canada, and the United States,
industry conditions, increased competition, the lack of
availability of qualified personnel or management, fluctuations in
foreign exchange, stock market volatility and market valuations of
companies with respect to announced transactions. The Company's
actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking
statements, including those described in the Company's Financial
Statements, Management Discussion and Analysis and Material Change
Reports filed with the Canadian Securities Administrators and
available at www.sedar.com, and the Company's 20-F annual report
filed with the United States Securities and Exchange Commission at
www.sec.gov. Accordingly, no assurances can be given that any of
the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what benefits,
including the amount of proceeds, that the Company will derive
therefrom.
Readers are cautioned that the foregoing list of factors is not
exhaustive. All subsequent forward-looking statements, whether
written or oral, attributable to the Company or persons acting on
its behalf are expressly qualified in their entirety by these
cautionary statements. Furthermore, the forward-looking statements
contained in this news release are made as at the date of this news
release and the Company does not undertake any obligation to update
publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws.
This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United
States. The securities of the Company have not been registered
under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act") or any state securities laws and may not be
offered or sold within the United States or to U.S. Persons unless
registered under the U.S. Securities Act and applicable state
securities laws or an exemption from such registration is
available.
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.
Contacts: Teryl Resources Corp. John Robertson President
604-278-5996 or Toll Free: 1-800-665-4616 604-278-3409 (FAX)
www.terylresources.com
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