Columbus Gold Announces Positive Bankable Feasibility Study for Montagne d''Or Gold Project, French Guiana
(businesspress24) - VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/20/17 -- Columbus Gold Corp. (TSX: CGT)(OTCQX: CBGDF) ("Columbus") is pleased to announce the results of the independent Bankable Feasibility Study prepared in accordance with National Instrument 43-101 ("NI 43-101") for its Montagne d''Or Gold Project ("Montagne d''Or" or "Project") located in French Guiana. The NI 43-101 Technical Report will be filed on SEDAR within 45 days of the date of this news release. The Bankable Feasibility Study was finalized on-time under an accelerated three-year timeline which required among other things, substantial drilling, completion of three resource estimates, a preliminary economic assessment (PEA), numerous associated technical reports, community consultations, and comprehensive environmental studies.
Columbus has retained a third-party consultant to review the Bankable Feasibility Study and underlying resource and reserve models.
Robert Giustra, CEO of Columbus, commented: "The completion of the Bankable Feasibility Study is a major milestone in the advancement of what is clearly a significant gold deposit with substantial potential. With the base-case and fundamental underlying economics now well understood, that potential is being immediately pursued with further exploration drilling, which is already underway on strike east and west, with one hole completed at depth beneath the pit. In addition, a near-term program is being considered to infill drill the higher-grade portion of nearly 1 million resource pit constrained, Inferred ounces."
Mr. Giustra further stated: "In parallel with additional drilling, Columbus is evaluating a number of indications of interest it has received to fund mine construction, the next logical step for the development of the Montagne d''Or deposit."
Bankable Feasibility Study Highlights
Project Enhancement Opportunities
Following an evaluation of the Bankable Feasibility Study, Columbus believes the following improvements to the Project can be made:
Bankable Feasibility Study Metrics
The Bankable Feasibility Study was funded by Nord Gold SE ("Nordgold") pursuant to which it has earned a 50.01% interest in the Project. Nordgold was required to spend a minimum of US$30 million and complete a Bankable Feasibility Study by March 13, 2017. Nordgold has met the minimum spending requirement and delivered the Bankable Feasibility Study to Columbus by the March 13, 2017 deadline. Nordgold acquired an additional 5% interest in the Project (for a total interest of 55.01%) pursuant to a share purchase agreement dated January 12, 2016. Nordgold has delivered a notice of option exercise to Columbus to acquire its total 55.01% interest in the Project.
Mineral Resource Estimate
The Mineral Resource Estimate is supported by 349 diamond core and reverse circulation drillholes. The drilling was completed in two main campaigns. A previous property owner drilled 56 holes between 1996 and 1998. Columbus completed an additional 293 holes from 2011 to March, 2016. The Columbus drilling was accompanied by an industry standard Quality Assurance/Quality Control program providing good confidence in the sampling, sample preparation and analytical results.
The Mineral Resource is confined mainly within a grade shell which encloses anomalous gold mineralization at a 0.3 g/t Au threshold. The grade estimation was conducted in eight domains. Four rock groups were used and each rock group was estimated independently both internal and external to the grade shell using only samples from the same domain. An Inverse Distance Weighting Squared algorithm was used for the grade estimations. Industry standard validation methods were used to evaluate the results. The Mineral Resources are classified according to CIM Guidelines into Measured, Indicated and Inferred categories based mainly on average drillhole spacing.
The Montagne d''Or Mineral Resource Statement is presented in the table below. The resource is confined within a Whittle™ optimization pit shell and a CoG of 0.4 g/t Au is applied. The pit shell and CoG assumes open-pit mining methods and is based on a mining cost of US$2/t mined, milling cost of US$15/t ore, administration cost of US$1/t ore, a gold price of US$1,300/oz, 95% gold recovery, gold refining cost of US$8/oz, and 5% net smelter return (NSR) royalty. A 45 degrees pit shell slope was used for bedrock and a 35 degrees pit shell slope was used for saprolite. The reported Mineral Resources include material from all estimation domains.
Montagne d''Or Mineral Resource Statement as of July 1, 2016
Mineral Resource Sensitivity
The Mineral Resources are presented at a range of CoGs, subdivided by resource classification. All resources are confined within the Whittle™ optimization pit shell.
Mineral Resource Sensitivity (1)
Mineral Reserve Estimate
Mineral Reserves were determined based on a gold price of US$1,200/oz Au. Reserves stated are as of September 1, 2016. The ore material is converted from Mineral Resources to Mineral Reserves based on positive Project cash flow results, pit design and geological classification of Measured and Indicated Resources.
Montagne D''Or Mineral Reserve Estimate as of September 1, 2016
Mining and Processing
The Montagne d''Or mine will be an open pit mine operation. The conversion of Mineral Resources to Mineral Reserves resulted in a diluted Mineral Reserve Estimate of 54.1 Mt at a grade of 1.58 g/t Au, resulting in a contained total of 2.75 Moz Au in situ prior to metallurgical recovery.
The ultimate open pit design has been separated into eight mine design phases for sequenced extraction for the mining production schedule, and has a stripping ratio of 4.5 to 1 (waste to ore tonnage). The mine production schedule is based on feeding the ore processing facility operating at a rate of 4.5 Mt per year, however, ore is mined in excess this rate so that marginal low-grade can be stockpiled (and processed at the end of the mine life). The mining plan consists of two years of limited pre-stripping (prior to ore processing start-up), ten years of open pit mining, and two years of low-grade ore stockpile re-handling to feed the mill.
Two waste rock dumps, the West Dump and Central Dump, are located north of the open for placement of waste material. These are near the open pit to reduce the waste haulage cycle times for trucks.
Because of the significant rainfall, terrain and saprolite, a mixed mining equipment fleet mining was planned. The initial fleet was planned to consist of two (6.7 m3 capacity) excavators loading a fleet of nine (40 t) articulated dump trucks ("ADTs"). The ADTs will be used for pioneering excavation and most of the saprolite mining. As the open pit expands a larger mining fleet will be introduced consisting of three (12.0 m3 capacity) excavators and 17 (91 t) rear dump trucks to perform most of the bulk mining production.
The process plant design criteria were derived from the metallurgical test work results. The Project adopted a robust metallurgical flowsheet designed for optimum recovery with minimum operating costs, and utilizes unit operations that are well proven in the industry. The plant layout provides ease of access to all equipment for operating and maintenance requirements whilst maintaining a compact footprint to minimize environmental impact.
The key specific criteria for the plant design were:
The Montagne d''Or plant has been designed to treat the range of ore types and blends that will be mined over the life of the Project. The treatment plant design incorporates the following unit process operations:
The Project is approximately 120 km by road from the nearest major settlement, Saint-Laurent-du-Maroni, which has good transport links, communications services and with connection to the regional power grid. A 106 km, 90 kilovolts overhead powerline is planned to connect the site to the existing power grid.
Gold price sensitivity shows that the after-tax Project NPV 5% changes approximately US$1.24 million for every US$1 change in gold price, either upwards or downwards.
Sensitivity Analysis at Various Gold Price Points
Discount rate sensitivity is important due to the remote location of the Project, in a jurisdiction that has little organized mining activity. Discount rate sensitivity shows that the after-tax Project NPV is positive as currently designed, up to an 18.5% discount rate.
Sensitivity Analysis at Various Discount Rates
The Project is also sensitive to the EURUSD exchange rate as operating costs are approximately 77% Euro-based while Capital Costs are approximately 66% Euro-based. The remaining costs are mainly USD-based. EURUSD exchange rate sensitivity shows that the after-tax Project NPV 5% changes approximately US$12 to 13 million for every 100 basis point change in the exchange rate, either upwards or downwards.
Sensitivity Analysis at Various EURUSD Rates
Operating Costs and Capital Costs
Based on an exchange rate of US$1.05:EUR1.00, the Project has total operating costs of US$28.76/t processed and LOM Capital Costs of US$827 million including final closure and reclamation. An overall contingency rate of approximately 9.5% has been applied to capital items. Some of the major assumptions underlying the cost estimates are:
Operating Cost Summary
Life-of-Mine Capital Costs (US$000''s)
The technical report, entitled "NI 43-101 Technical Report, Bankable Feasibility Study, Montagne d''Or Project, French Guiana, Effective Date: March 6, 2017," will be filed on SEDAR within 45 days of the date of this news release. The scientific and technical data contained in this news release pertaining to the Project has been reviewed and approved by the following Qualified Persons under NI 43-101 who consent to the inclusion of their names in this press release: Peter Clarke, BSc Mining, MBA, Peng, APEGBC#13473, SRK Consulting (U.S.), Inc. and David Gordon, BAppSc Engineering Metallurgy, FAusIMM, Lycopodium Minerals Pty Ltd, both of whom are independent of Columbus.
In this news release, the Qualified Person for the Mineral Resource Estimate is Bart A. Stryhas, PhD, CPG, AIPG#1034 of SRK Consulting (U.S.), Inc., and the Qualified Person for the Mineral Reserve Estimate is Bret C. Swanson, BEng Mining, MAusIMM, MMSAQP #01418QP.
Rock Lefrancois, Chief Operating Officer for Columbus and Qualified Person under National Instrument 43-101, has reviewed this news release and is responsible for the information reported herein related to the exploration drilling program currently underway at Montagne d''Or.
ON BEHALF OF THE BOARD,
Robert F. Giustra
Chairman & CEO
This news release includes certain forward-looking statements concerning future performance and operations of Columbus and its subsidiaries and its mineral project, including the expected price of metals, the estimation of Mineral Resources and Mineral Reserves including potential increases in estimates and conversion of Inferred Mineral Resources, potential lowering of the CoG used for reserves that in turn would potentially convert Measured and Indicated Resources into Proven and Probable Reserves, potential increases to reserves by refining the pit design, and potential expansion of the deposit upon completion of the exploration drilling program currently underway at the Project), plans for a proposed infill drilling program and its estimated cost and start date and the availability of permits for such program, the expected timing to file the NI 43-101 Technical Report on SEDAR, the expected potential of the Project, anticipated opportunities to enhance the Project based on the bankable feasibility study results, planned drill targets for the exploration drilling program currently underway at the Project, the expected design of the mining operation, expected processing methods and estimated recoveries, the realization of Mineral Resources and Reserve estimates, the timing and amount of estimated future production, costs of production, capital, operating and exploration expenditures, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes or claims, and the realization of the expected economics of the Project, as well as management''s objectives, strategies, beliefs and intentions. 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 beliefs, opinions and expectations of management at the time such statements are made. Forward-looking statements involve risks and uncertainties and there are other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including: that a mine construction decision will be made by Columbus and Nordgold, that all necessary permits for mine construction or otherwise will be approved and granted on a timely basis for the Project, that skilled personnel and contractors will be available as mine construction and subsequent operations move forward, that the price of gold will be at levels that render the Project economic, that Columbus will successfully raise the capital (through debt, equity or other means) required to fund its proportionate share of expenditures for the Project in order to construct the mine, realize on the Mineral Resource and Mineral Reserve Estimates, realize on current mine plans, and prevent dilution of Columbus'' 50.01% proportionate interest in the Project as provided for in the form of shareholders'' agreement to be entered into with Nordgold pursuant to Nordgold''s acquisition of a 55.01% interest in the Project, that the assumptions contained in the NI 43-101 Technical Report to be filed on SEDAR within 45 days after the date of this news release will be accurate and complete, the speculative nature of mineral exploration and development, changes in project parameters and/or economic assessments as plans continue to be refined, uncertainties of project cost overruns or unanticipated costs and expenses, the ongoing cooperation of Columbus and Nordgold, uncertainties inherent in conducting operations in a foreign country, fluctuating metals prices, general business, economic, competitive, political and social uncertainties, actual results of future or current exploration activities, possible variations of mineral grade or recovery rates, the failure of plant, equipment or processes to operate as anticipated, and other risks associated with the development and operation of a mining project generally.
Actual events or results may differ materially from those projected in the forward-looking statements. As such, we caution the reader against placing undue reliance on any forward looking statements or information included herein. The foregoing list is not exhaustive and Columbus undertakes no obligation to update any of the foregoing except as required by applicable law.
Investor Relations (604) 634-0970 or 1-888-818-1364
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