Mr. Ewan Downie reports
PREMIER REPORTS POSITIVE PRELIMINARY ECONOMIC ASSESSMENT RESULTS FOR HARDROCK & BROOKBANK PROJECTS
Premier Gold Mines Ltd. has released the results of independent preliminary economic
assessment studies (PEA) on the company's 100-per-cent-owned Hardrock and
Brookbank deposits in Northwestern Ontario. The PEA studies were
prepared by Stantec Mining with contributions from BBA Inc., InnovExplo
Inc. and Micon International Ltd., and completed in accordance with
National Instrument 43-101. The technical report with
respect to both PEAs will be filed on the company's website and on
SEDAR within 45 days. The company has also scheduled a conference call and webcast for
investors and analysts at 1:30 p.m. ET, Tuesday, Jan. 28,
2014. Details for the call can be found at the bottom of this press
release.
The Hardrock PEA study was prepared as an open-pit-only mining project
related solely to the mineral resources reported on Oct. 29, 2013, by the company (press release "Premier Gold Releases Updated
Mineral Resource Estimate On Hardrock Deposit"), for the Hardrock
project (a part of the Trans-Canada property) about 260 kilometres by
highway northeast of Thunder Bay, Ont., just south of Geraldton.
The Brookbank PEA study was prepared as a combined open-pit and
underground mining project related solely to the mineral resources
reported on Dec. 19, 2012, by the company (press release "Premier Gold Releases Trans-Canada
Property Resource Estimates On Four Deposits") for the Brookbank
deposit. Brookbank is located about 77 kilometres by road and highway
west of the Hardrock deposit.
Highlights of the 2014 PEA studies (all currency amounts in Canadian
dollars unless otherwise stated) include:
Hardrock project estimates:
- Average annual gold production during the first eight years of 253,100
ounces with life-of-mine (LOM) (15 years) annual production of 202,700 ounces
(including low-grade stockpiles);
-
Average grade over the first eight years of 1.50 grams per tonne gold (g/t
Au) with an LOM average grade of 1.18 g/t Au (including low-grade
stockpiles);
-
Initial processing of 10,000 tonnes per day (tpd), expanding to 18,000 tpd in year 3;
-
Preproduction capital costs of $410.6-million including $83-million for contingency;
-
Pretax net present value (NPV) (at a 5-per-cent discount rate) of $519-million
at $1,250 (U.S.) gold;
- Pretax internal rate of return (IRR) of 23.0 per cent and a 3.5-year payback at
$1,250 (U.S.) gold.
Brookbank project estimates:
- Pretax NPV (at 5-per-cent discount rate) of $76-million and IRR of 30.7 per cent at
$1,250 (U.S.) gold when rock is trucked to Hardrock versus stand-alone processing option;
-
Average annual gold production during LOM (seven years) of 48,700 ounces.
Ewan Downie, president and chief executive officer of Premier Gold Mines, stated: "The
completion of these PEAs represent a significant milestone for our
technical teams, and a very high-quality and achievable opportunity for
our shareholders. Economics compare favourably to peer projects, and
Premier is well financed to move the projects aggressively through to
feasibility."
Hardrock project
Mineral resources used in PEA
The Hardrock PEA study assumes that open-pit mining only will be used
for resource extraction. This was judged to be the quickest and least risky proposition of
converting resource to reserves and execution. The mineral resource
estimate, as reported on Oct. 29, 2013, excluded the impact of mining dilution, which is the incidence of
waste rock extracted together with mineralized material.
For the PEA, open-pit-mining dilution is calculated as 5 per cent at zero g/t gold.
Open-pit resources have been calculated assuming a material loss of 5 per cent.
With an open-pit cut-off grade of 0.35 g/t gold, the resulting tonnages
and grades for the open-pit conceptual mine plan, including planned
low-grade stockpiles, is shown in the associated table.
DILUTED OPEN-PIT MINERAL RESOURCES USED IN HARDROCK PEA
STUDY
Cut-off Resource Tonnes Gold (Au) Au ounces
category category (mt) grade (g/t) (Moz)
Open-pit Indicated 64.663 1.18 2.454
Inferred 24.669 1.18 0.938
The Hardrock PEA is preliminary in nature, and 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, and there is no certainty that
the Hardrock PEA will be realized.
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the relative
accuracy of the estimate. All assays have been capped where
appropriate.
Mining
The Hardrock PEA assumes the processing of an average 10,000 tonnes per
day of material during the first two years of production, followed
by an expansion to 18,000 tonnes per day in year 3 for the remainder of
the mine life (13 years), from a combination of direct-process open-pit
material and stockpile reclaiming operations.
The open-pit-mine and stockpiling reclaim plan is a 15-year plan that
utilizes a stockpile strategy to maximize grade to the mill and mines
to an ultimate depth of 460 metres below surface.
The Hardrock open pit is designed as a conventional surface mining
operation blasting 30 million tonnes of material per year in the first
two years of operations and 45 million tonnes per year thereafter. The
primary equipment fleet would consist of up to two 27-cubic-metre hydraulic shovels, one 15-cubic-metre hydraulic shovel, one 18-cubic-metre wheel loader, 150-tonne- and 250-tonne-class haul trucks, and a fleet of
support equipment. Production drilling will be carried out by up to
five diesel-powered, track-mounted units on 203-millimetre holes. Operating
bench heights of 10 metres have been assumed for mining operations.
Over the life of the open pit, a total of 391 million tonnes of waste
rock and overburden material would be moved. During the preproduction
period, 1.6 million tonnes of overburden and waste rock would be
removed as part of development work. Waste-rock-to-mill-feed operating
strip ratio is expected to average 5.37 during mining operations and
4.38 over the life of the mine (including low-grade stockpiles and
overburden).
Open-pit mining operating costs include mine supervision, drilling,
blasting, loading, hauling, services, dumps, roads and maintenance
costs. These costs were evaluated using data from other similar
projects and from budget quotes provided by suppliers. An extra 38 per cent was
added to the salaries to account for benefits, and depending on the
job, bonuses were also included. The associated table presents a summary of the
estimated operating costs. A maximum of 207 direct positions have been
estimated for mining requirements based on past experience and industry
averages.
SUMMARY BY TOTAL, PER TONNE MINED AND PER TONNE MILLED OF ESTIMATED HARDROCK
OPERATING COSTS
Unit Unit
cost cost
Total Total per per
Cost preproduction Total project tonne tonne
centre cost production cost mined milled
Technical
services
Engineering $440,000.00 $17,113,000.00 $17,553,000.00 $0.04 $0.20
Geology $477,000.00 $30,161,000.00 $30,638,000.00 $0.07 $0.34
Mining cost
Mine
supervision $460,000.00 $21,279,000.00 $21,739,000.00 $0.05 $0.24
Drilling $433,000.00 $76,744,000.00 $77,177,000.00 $0.16 $0.86
Blasting $865,000.00 $151,550,000.00 $152,415,000.00 $0.32 $1.71
Loading $230,000.00 $44,939,000.00 $45,169,000.00 $0.10 $0.51
Hauling $551,000.00 $247,663,000.00 $248,214,000.00 $0.52 $2.77
Services $630,000.00 $81,360,000.00 $81,990,000.00 $0.18 $0.92
Dumps and roads $266,000.00 $59,178,000.00 $59,444,000.00 $0.13 $0.67
Maintenance $1,081,000.00 $216,002,000.00 $217,083,000.00 $0.47 $2.43
Total $5,433,000.00 $945,989,000.00 $951,422,000.00 $2.04 $10.65
Metallurgy and processing
Recent metallurgical testing conducted during 2013 on open-pit resource
material served as a basis for the milling flowsheet developed by BBA.
The highlights of the process flowsheet include:
-
Primary crushing and two-stage grinding;
-
Gravity recovery;
-
Whole-rock carbon-in-leach circuit;
-
Cyanide destruction;
-
Carbon stripping, electrowinning and smelting to produce gold dore.
Major equipment for the initial process facility includes a gyratory
crusher sized for 18,000 tpd, a 32-inch by 14-inch semi-autogenous (SAG) mill
and a 20-inch by 30.5-inch ball mill. Mill feed would be ground to a P80 of 75 micrometres before entering a gold leaching circuit. Major requirement
related to the third-year expansion to 18,000 tonnes per day include additional crushing,
ball milling, solid-liquid separation units and leach capacity.
Metallurgical recoveries for gold over the life of the mine are
expected to average 89.6 per cent. No byproduct credits are anticipated.
ESTIMATED MILL OPERATING EXPENSES
PER TONNE MILLED
Cost centre 10,000 tpd 18,000 tpd
Reagents $ 3.11 $ 3.03
Consumables $ 3.73 $ 3.24
Personnel $ 1.68 $ 1.06
Utilities $ 4.07 $ 3.76
Total $ 12.59 $ 11.09
The estimated mill operating expenses were based on available reagent
consumptions, and additions from testwork, local manpower costs and
industry standards where applicable. A breakdown of the mill operating
expenses is shown in the associated table. A roster total of 62 workers (increasing
to 71 with the 18,000 tpd expansion) is established for the milling and
assay lab requirements based on past experience and industry averages.
An electrical power cost of eight cents per kilowatt-hour is assumed for this study.
Infrastructure
The Hardrock project benefits from world-class infrastructure, services
and available labour within several communities in the immediate area.
The project site is located only 260 km from Thunder Bay, Ont.
(population 108,000), a few kilometres south of Geraldton, Ont.
(population 1,893) and at 32 kilometres west of Longlac (population
1,388), all within the municipality of Greenstone, and the Long Lac
No. 58/Ginoogaming First Nation (population 600) reserves. It resides
along the Trans-Canada Highway and is accessible year-round. The
Trans-Canada natural gas pipeline passes close to the site. Finally,
some infrastructure will need to be relocated to accommodate the
project.
Infrastructure is anticipated to include:
-
Plant site and haul roads, gate house, parking, bus station, and weigh
station;
-
Administration building, including all services; engineering, geology,
administration, environment, health and safety, mine supervision, fire
fighting, emergency office (ERT), and human resources;
-
Nine-door open-pit garage and warehouse;
-
Assay lab;
-
Electrical surface infrastructure;
-
Emulsion plant;
-
Fuel storage facilities;
-
Fresh water supply and fire protection;
-
Dewatering and water contact treatment plant;
-
Sewage treatment;
-
One tailings pond;
-
Power to the project supplied by an existing 115-kilovolt transmission line
connected to the provincial grid.
A total of 65 workers have been estimated for the general and
administrative expense (G&A) requirements based on past experience and
industry averages. The G&A costs include, for the operation,
administrative personnel, general office supplies, safety and training
supplies, contracted consultant services, insurance, permits property
taxes, security, camp, building maintenance, environment management,
geology, engineering, and all indirect cost. Estimated annual G&A costs
are summarized in the associated table.
ANNUAL G&A COST ESTIMATE FOR THE HARDROCK MINE
Total 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Open pit G&A (M$) 48.8 4.0 4.0 4.0 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.9 3.9 1.5 0.0 0.0
General G&A (M$) 129.5 9.2 9.7 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 9.8 5.7 3.5 3.4
Owner indirects (M$) 9.0 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
The base price for the fuel used in calculations is $1.00 per litre.
Capital and operating costs
Open-pit preproduction capital costs require a minimal overburden and
waste stripping component as the bedrock material to be mined is
already exposed on surface. The breakdown of open-pit preproduction,
sustaining capital costs and mill expansion are summarized in the associated tables.
HARDROCK PREPRODUCTION CAPITAL COSTS ESTIMATE
Capital cost Preproduction
($ millions)
Processing plant (phase 1) $193.2
Infrastructure and earthwork $52.7
Prestripping and owner's cost $15.4
Tailings and water pipeline $23.7
Indirects $42.4
Contingency $83.2
Total preproduction cost $410.6
HARDROCK SUSTAINING AND MILL EXPANSION CAPITAL COSTS ESTIMATE
Capital cost LOM sustaining Mill expansion
($ millions) ($ millions)
Processing plant (phase 2) - $105.1
Infrastructure and earthwork $38.5 -
Open-pit equipment $120.1 -
Tailings and water pipeline $42.0 $9.0
Indirects - $18.9
Contingency - $33.2
Total cost $200.6 $166.2
The cash cost profiles on a per-ounce and per-tonne basis for the
Hardrock project are summarized in the associated tables.
HARDROCK CASH-COST-PER-OUNCE SUMMARY
LOM (years 1 to 12)
Cash cost summary Years 1 to 8 without stockpile LOM (years 1 to 15)
(oz) ($/oz) ($/oz) ($/oz)
Mining $291.06 $320.80 $302.77
Processing 261.26 294.51 329.38
G&A 56.17 61.40 61.60
Refining 4.00 4.00 4.00
Cash cost 612.48 680.71 697.75
Royalties 39.35 39.35 39.35
Total cash costs 651.84 720.06 737.11
Sustaining costs 85.78 69.35 66.03
All-in sustaining costs 737.62 789.41 803.14
HARDROCK CASH-COST-PER-TONNE SUMMARY
LOM (years 1 to 12)
Cash cost summary Years 1 to 8 without stockpile LOM (years 1 to 15)
(t) ($/t) ($/t) ($/t)
Mining 12.62 12.24 10.30
Processing 11.32 11.24 11.21
G&A 2.43 2.34 2.10
Refining 0.18 0.16 0.14
Cash cost 26.55 25.98 23.75
Royalties 1.70 1.50 1.34
Total cash costs 28.25 27.48 25.09
Sustaining costs 3.72 2.65 2.25
All-in sustaining costs 31.97 30.13 27.34
Community
Premier is a proud member of the local Greenstone communities,
participating in a number of local events, initiatives and boards. The
company's community relations office provides members of the public
with the opportunity to engage with the company directly, outside of
regular communications, mailings and open houses. Additionally,
Premier also has a site office, multiple staff residence properties and
extensive local staff.
Premier regularly engages with local Aboriginal communities, and is
proud of the relationship that has and continues to develop. Premier
utilizes personnel from local Aboriginal communities on the Hardrock
project, such as representatives from each community as part of the
environmental monitoring team.
Environment
A formal environmental baseline work program has been continuing since
2011. Since 2013, Premier began more extensive regional monitoring and
assessment work that was undertaken to gain a thorough understanding of
the current environmental conditions in the region, including the
impacts of the Trans-Canada Highway on this former industrial site.
Project economics
Key economic performance metrics are summarized in the associated table on both a
pretax and after-tax basis. A range of gold prices (in U.S. dollars) is shown
for sensitivity purposes only. At a $1,250 (U.S.) gold price, the Hardrock
open-pit project has a pretax internal rate of return (IRR) of 23.0 per cent
(19 per cent after tax), a pretax NPV (discounted at 5 per cent) of about $519-million
($359-million after tax) and a payback of 3.5 years on a pretax basis
(3.9 years on an after-tax basis).
A spider graph representing the sensitivity of the change of
any one variable over a range of percentage difference versus the base
case is available on-line. Of the five variables measured, changes in grade and gold price
have the greatest impact on the NPV (pretax) of the project.
PRETAX AND AFTER-TAX IRR, NPV AND PAYBACK
SUMMARY
Pretax $1,050 (U.S.) $1,250 (U.S.) $1,450 (U.S.)
IRR (%) 10.3% 23.0% 33.6%
NPV5% ($M) 128 519 909
Payback (years) 6.2 3.5 2.8
After-tax $1,050 (U.S.) $1,250 (U.S.) $1,450 (U.S.)
IRR (%) 8.2% 19.0% 27.7%
NPV5% ($M) 72 359 633
Payback (years) 7.2 3.9 2.9
(1) Exchange rate $1 equals 95 U.S. cents.
Opportunities and risks
Opportunities to improve Hardrock project economics include the
following:
-
The Hardrock PEA is based on the Aug. 9, 2013, mineral resource cut-off
date and does not include subsequent infill drilling of about 45,000
metres completed to the end of 2013;
-
The next resource update is planned for the second quarter of 2014 and will include a more
refined underground voids model which could potentially contribute
resource tonnes and ounces previously included at zero grade;
-
Infill assays of previously unsampled drill core will improve the
confidence of the grade estimate in some areas;
-
Refining the litho-structural model by incorporating information gleaned
from historic drilling (not assay data) will improve confidence in the
model constraints;
-
Follow-up drilling in the North Wall area could bring additional mineral
resources into the optimized pit;
-
Completing an underground study to further enhance project economics;
-
Potential improvement in metallurgical recovery.
Risks requiring mitigation strategies include:
-
Management of construction/engineering and procurement schedules, costs,
and cost containment;
-
Operating risks related to recruitment and training of open-pit
work force;
-
Currency risk relating to equipment purchases denominated in U.S.
currency;
-
Permitting risk.
Next steps
Technical:
-
Complete infill drill program for revised mineral resource estimate in
2014;
-
Proceed with baseline environmental work for completion by summer 2014
(continuing monitoring work forecasted for life of mine);
-
Optimization work (testing and engineering) for minimizing capital and
operating costs;
-
Detailed engineering work for final feasibility.
Exploration
-
Renewed focus on regional targets and new deposit discovery.
Community and environment
-
Complete the baseline environmental and optimization work (testing and
engineering) necessary to ensure a successful environmental assessment
process;
-
Submission of a project description is anticipated in spring 2014 to
federal and provincial governments to begin the formal environmental
assessment processes. This will comprise baseline environmental
information collected over past years, comprises formal public and Aboriginal consultation periods, and helps ensure a mine design that
avoids and mitigates environmental impacts.
Qualified persons
Each of the following individuals is a qualified person for the
purposes of NI 43-101. All scientific and technical information in
this press release in respect of the Hardrock project or the Hardrock
PEA is based upon information prepared by or under the supervision of
such individuals.
Stantec:
- Michel St. Laurent, PEng (mining and environment);
- Fiona Christianson, MSc (environment).
BBA Inc.:
- Julie Fournier, ing (metallurgy and processing).
InnovExplo Inc.:
- Carl Pelletier, BSc, PGeo, and Karine Brousseau, PEng (resource
estimate);
- Sylvie Poirier, ing (mining).
Brookbank project
Mineral resources used in PEA
The Brookbank PEA study assumes that open-pit and underground mining
will be used for resource extraction. The mineral resource estimate as
reported on Dec. 19, 2012, excludes the impact of mining dilution,
which is the incidence of waste rock extracted together with
mineralized material. For the PEA, open-pit-mining dilution is
calculated as 25 per cent at 0.22 g/t gold. Open-pit resources have been
calculated assuming a material loss of 10 per cent.
Underground excess mining dilution is calculated as 15 per cent at 0.00 g/t gold
after a 27.6-per-cent planned internal dilution at 2.5 g/t gold. Underground
mining also assumes a material loss of 10 per cent. With open-pit and
underground cut-off grades of 1.52 g/t gold (before dilution and mill
recovery) and 4.50 g/t gold, respectively, the resulting tonnages and
grades for the open-pit and underground conceptual mine plan is shown
in the associated table. For the purpose of this study, it has been assumed that the ore would be
processed at a future Hardrock mill.
DILUTED OPEN-PIT AND UNDERGROUND MINERAL RESOURCES USED FOR BROOKBANK PEA
STUDY
Cut-off Resource Tonnes Gold (Au) Au ounces
Deposit category category (Mt) grade (g/t) (Moz)
Brookbank Open pit Indicated 0.503 2.31 0.037
Underground Indicated 1.659 6.25 0.333
Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the relative
accuracy of the estimate. All assays have been capped where
appropriate.
Mining
The Brookbank PEA assumes the processing of an average 900 tonnes per
day of material from open-pit and underground sources during the life
of the mine. Open-pit mining (average grade of 2.31 g/t gold) would be
conducted for a period of 2.5 years at 600 tonnes per day in the
beginning of the mine life followed by underground mining operations
(average grade of 6.25 g/t gold) at up to 900 tonnes per day for a
period of six years. The waste-rock-to-mill-feed operating strip ratio
averages 5 to 1 over the life of the open pit.
Underground mining operations would be accessed via a single portal and
main ramp from surface. The operation would utilize longitudinal
longhole stoping (25-metre sublevels), with consolidated and
unconsolidated rockfill as a mining method and require up to 4,000
metres of prepreproduction and sustaining capital development, and
about 7,000 metres of operating lateral development (waste and milling)
over the life of the mine.
Metallurgy and processing
Based on available historical information and testwork at Brookbank,
the proposed process flowsheet determined by BBA remains similar to the
historical flowsheet. It includes primary and secondary crushing,
single-stage grinding, carbon in leach, cyanide destruction, carbon stripping,
electrowinning, and refining. As such, Brookbank material would also
be amenable to the proposed Hardrock flowsheet.
A trade-off study was conducted which determined that transporting
Brookbank material to Hardrock for processing and gold recovery
significantly enhances the Brookbank PEA economics when compared with a
stand-alone milling complex for Brookbank rock. No additional
processing facilities are anticipated at Hardrock to facilitate the
Brookbank rock milling.
Infrastructure
The Brookbank project benefits from world-class infrastructure, services
and available labour within several communities in the immediate area.
The project site is located only 232 kilometres from Thunder Bay,
Ont. (population 108,000) and 28 kilometres northeast of Beardmore,
Ont. (population 400) within the municipality of Greenstone. It
resides 12 kilometres from the Trans-Canada Highway and is accessible
by road year-round.
Infrastructure at the Brookbank project is anticipated to include, among
other things, the following facilities:
-
Plant site and haul roads, gate house, parking, bus station, and weigh
station;
-
Separate administration building, compressor building;
-
Assay lab, core shack, surface shop;
-
Mine maintenance garage, warehouse;
-
Fuel storage facilities; power distribution;
-
Fresh water supply and fire protection;
-
Sewage treatment;
-
Coarse and fine material storage pads;
-
Non-acid-generating waste storage;
-
Power to the project supplied by electric transmission line connected to
the provincial grid.
Capital and operating costs
Total preproduction and sustaining capital cost estimates for both the
open-pit and underground portions of the Brookbank project are
summarized in the associated table.
PREPRODUCTION AND SUSTAINING ESTIMATED CAPITAL COSTS
FOR BROOKBANK OPEN-PIT AND UNDERGROUND MINES
Capital cost All LOM
($ millions)
Surface infrastructure $20.3
Vertical and horizontal development 33.6
Underground infrastructure 3.9
Mobile equipment 21.5
Indirects 6.7
Contingency 20.6
Total capital cost 106.6
The estimated cash cost profile for the Brookbank project is summarized
in the associated table. Operating expenses shown in the table reflect a blend of
Brookbank and Hardrock operation at a nominal 18,000 tpd.
CASH COST SUMMARY FOR BROOKBANK OPEN-PIT
AND UNDERGROUND MINES
Cash cost summary LOM LOM
($/t) ($/oz)
Mining 32.46 205.71
Processing 11.24 71.23
Surface haulage 14.76 93.54
G&A 38.68 245.09
Refining 0.63 4.00
Total cash costs 97.77 619.57
Community
Premier continues to operate a local office in Beardmore, and has
conducted community meetings as well as outreach efforts to local
Aboriginal communities. While these have been preliminary in nature,
Premier is anticipating continued engagement throughout the development
of this project.
Environment
Environmental information to support a project definition and closure
plan for the Brookbank site has been collected since 2011. Existing
data consist of quarterly surface water quality, and terrestrial and
aquatic wildlife studies.
Project economics
As alluded to in the metallurgy and processing subsection of this
document, trade-off studies were performed which confirmed that
transporting Brookbank rock material about 77 kilometres to an existing
processing facility at Hardrock realized the greatest economic benefit
for the Brookbank project.
Key economic performance metrics are summarized in the associated table on both a
pretax and after-tax basis. A range of gold prices (in U.S. dollars) is shown
for sensitivity purposes only. At a $1,250 (U.S.) gold price, the Brookbank
open-pit and underground mining project has a pretax internal rate of
return (IRR) of 30.7 per cent (24.7 per cent after tax), a pretax NPV (discounted at
5 per cent) of about $76-million ($52-million after tax) and a payback of 4.3
years on a pretax basis (4.4 years on an after-tax basis).
PRETAX AND AFTER-TAX IRR, NPV AND
PAYBACK FOR THE BROOKBANK PROJECT
Pretax $1,050 (U.S.) $1,250 (U.S.) $1,450 (U.S.)
IRR (%) 14.0% 30.7% 43.6%
NPV5% ($M) $29 $76 $139
Payback (years) 5.3 4.3 3.7
After tax $1,050 (U.S.) $1,250 (U.S.) $1,450 (U.S.)
IRR (%) 9.4% 24.7% 38.1%
NPV5% ($M) $11 $52 $87
Payback (years) 5.6 4.4 3.8
(1) Exchange rate $1 equals 95 U.S. cents.Opportunities and risks
Opportunities to improve Brookbank project economics include the
following:
-
Infill assays of previously unsampled drill core will improve the
confidence of the grade estimate in some areas;
-
Refining the litho-structural to improve confidence in the model
constraints;
-
Follow-up drilling in at Cherbourg and Foxear to delineate mineral
resources.
Risks requiring mitigation strategies include:
-
Management of construction/engineering and procurement schedules, costs, and cost containment;
-
Operating risks related to recruitment and training of open-pit and
underground work forces;
-
Currency risk relating to equipment purchases denominated in U.S.
currency;
-
Permitting risk.
Next steps
Technical:
- Optimization work (testing and engineering) for minimizing capital and
operating costs.
Exploration:
-
Renewed focus on regional targets and new deposit discovery.
Community and environment:
- Premier intends to continue to engage with the local Beardmore and
Aboriginal communities on its plans for the Brookbank project. These
will include open houses, direct communications and bilateral
engagements.
Qualified persons
Each of the following individuals is a qualified person for the
purposes of NI 43-101. All scientific and technical information in
this press release in respect of the Brookbank project or the Brookbank
PEA is based upon information prepared by or under the supervision of
such individuals.
Stantec:
- Michel St. Laurent, PEng (mining and environment);
- Helga Sonnenberg (environment).
BBA Inc.:
- Julie Fournier, ing (metallurgy and processing).
Micon International Ltd.:
- Alan J. San Martin, MAusIMM (CP), and Charley Murahwi, PGeo,
FAusIMM (resource estimation).
Live conference call and webcast access information:
North American callers, please dial: 1-888-231-8191
Local and international callers, please dial: 647-427-7450
Taped replay: 416-849-0833 or 1-855-859-2056
Reference No.: 49097250
Available until: Feb. 28, 2014, at midnight
A live audio webcast will be available on the company's website.
We seek Safe Harbor.
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