Dr. David Palmer reports

PROBE GOLD ANNOUNCES UPDATED PEA FOR NOVADOR PROJECT, QUEBEC; 23% INCREASE IN AVERAGE ANNUAL PRODUCTION TO 255,000 OUNCES, PRE-TAX NPV5% OF C$1.53 BILLION, AND PRE-TAX IRR OF 34.4%

Probe Gold Inc. has released positive results from the independent updated preliminary economic assessment (PEA) for its 100-per-cent-owned Novador p (formerly known as Val d'Or East) located near Val d'Or, Que. The updated PEA provides a base case assessment of developing the Novador mineral resource by open-pit and underground mining, and gold recovery with a standard free milling flowsheet, incorporating gravity and leaching of the gravity tails, with 50 per cent estimated to be recovered via gravity. The economic model supports an operation with a high rate of return over a 12.6-year mine life, with significant average annual production of 255,000 ounces, an increase of 23 per cent from the 2021 PEA. The updated PEA was prepared by Ausenco Engineering Canada ULC in accordance with National Instrument 43-101 -- Standards of Disclosure for Mineral Projects. The updated NI 43-101 PEA technical report will be filed on SEDAR+ within 45 days of this announcement.

David Palmer, president and chief executive officer of Probe, states: "Our initial goal for the company was to discover a gold deposit capable of producing 200,000 ounces per year and we have now achieved an average of over 250,000 ounces per year, over a mine life of almost 13 years, with a resource that is still growing. From our last PEA in 2021 we have demonstrated numerous improvements: our potential production has increased by 23 per cent, our posttax NPV is up over 50 per cent to $910-million, we have simplified our milling by removing ore sorting and we have room for additional improvement in the prefeasibility study (PFS). Novador is a large, sustainable mining project leveraged to the gold price with a production profile capable of producing nearly 300,000 ounces per year in the first five years, marking a significant improvement over the previous PEA. To have gold production of this capacity in a safe and stable jurisdiction like Quebec distinguishes Novador as one of the pre-eminent gold development projects in the world and we see its potential in providing great benefits not only to our shareholders but also to the communities that surround it. We will continue to focus on derisking and permitting Novador in order to add value in the most efficient and effective way possible."

Yves Dessureault, chief operating officer of Probe, states: "This updated PEA has surpassed our expectations again and it clearly shows a robust and significant project. Following 581,000 metres of drilling and numerous technical and field studies to support robust design criteria, the project is on solid foundations. We have also integrated project elements to reduce its environmental footprint by taking advantage of its proximity to existing infrastructure. For example, the project includes rail delivery to site for reagents and consumables, electrification of open-pit mining equipment (drills and shovels), backfilling of two open pits (one with waste rock and the other with tailings), and dry staking of filtered tailings. With the permitting process initiated last fall with the submission of the initial project description to the Impact Assessment Agency of Canada, we now have a better-defined project and are now ready to further engage with the provincial, federal authorities and the various stakeholders. Clearly, this project connects us with a bright future."

Description of the Novador project and PEA

The PEA is preliminary in nature and includes inferred mineral resources 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 results of the PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

The Novador project includes the properties on the Pascalis, Monique and Courvan gold trends, which are all 100 per cent owned by Probe. The project benefits from world-class mining infrastructure, expertise for underground and open-pit operations, and highly qualified personnel. It can be easily reached by roads that are well maintained in all seasons. Several large-scale mining operations and gold mills (some with excess capacity) are currently active in the area. Since 1930, more than 30 million ounces of gold have been produced in the Val d'Or mining camp.

Since 2016, Probe Gold has been consolidating its land position in the highly prospective Val d'Or East area in the province of Quebec with a district-scale land package of 600 square kilometres that represents one of the largest landholdings in the Val d'Or mining camp. The Novador project is a subset of properties totalling 175 square kilometres hosting three past-producing mines (Beliveau mine, Bussiere mine and Monique mine) and falls along three regional mine trends. The current total Novador resource stands at 3,793,900 ounces of gold in the measured and indicated category (M&I) and 1,179,400 ounces of gold in the inferred category.

Ausenco was appointed as lead consultant in August of 2023 to prepare the updated PEA in accordance with NI 43-101 and was assisted by Moose Mountain Technical Services for the mine design.

The independent PEA was prepared through the collaboration of the following firms: Ausenco Engineering Canada ULC, Moose Mountain Technical Services (MMTS), InnovExplo, Knight Piesold Ltd. (KP), Richelieu Hydrogeologie Inc., Lamont Inc. and Rock Engineering Consulting Services. These firms provided mineral resource estimates, design parameters and cost estimates for mine operations, process facilities, major equipment selection, rock and tailings storage, reclamation, permitting, as well as operating and capital expenditures.

Financial analysis

The economic analysis was performed assuming a 5-per-cent discount rate. On a pretax basis, the net present value (5 per cent) is $1,530-million, the internal rate of return is 34.4 per cent and the payback period is 3.5 years. On an after-tax basis, the NPV (5 per cent) is $910-million, the IRR is 24.4 per cent and the payback period is 4.4 years.

The reader is advised that the updated PEA summarized in this news release is intended to provide only an initial, high-level review of the project potential and design options. The updated PEA mine plan and economic model include numerous assumptions and the use of inferred resources. Inferred resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the results of the updated PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Projected gold production averages 281,000 ounces per year over the first five years and 273,000 ounces per year over the first eight years. The life-of-mine production totals 3.21 million oz and averages 255,000 ounces per year. Production will come from open-pit mining in the first two years before transitioning to a combined open-pit and underground operation afterward.

Mine design and production schedule

The updated PEA considers open-pit mining from Monique, Courvan, Pascalis gold trends. Underground mining is used to extract material outside of the Monique, Courvan and Pascalis open pits. Underground mining areas are accessed from surface portals and are mined concurrently with the open pits. The underground mining methods considered in this study are longhole retreat for the Monique gold trend and mechanized drift and fill for the Courvan and Pascalis gold trends.

Lerchs-Grossman (LG) pit shell optimizations are used to define the ultimate economic pit limit for each gold trend. Ultimate pit limits are then split into smaller, detailed mining phases which incorporate geotechnical feedback for berm width, bench face angles and overall angles, and also include highwall ramps which are appropriately sized for the selected mining equipment. Haulage profiles are built for each destination from each phase, allowing the mining schedule program to include fleet size optimization, along with grade profile and mining rate optimizations.

Underground mining limits consider the expected processing and mining costs, with mining costs dependent upon the selected mining method. These costs are applied to the block model inside a stope optimizer program to develop mining stope areas. The stope areas are examined and small, isolated areas that would incur high development costs are removed. The remaining stopes are applied with appropriate mining loss and dilution factors. Stopes are scheduled with consideration of throughput capacities on the access ramps, ordered sequencing of stopes, timing of underground production relative to open-pit production and overall personnel requirements.

The scheduled mill feed resources by type are as follows: 5 per cent measured, 72 per cent indicated and 23 per cent inferred.

The owner-operated mining fleet will utilize conventional truck and shovel methods with 16-cubic-metre loaders and 135-tonne haul trucks on 12 m benches. Non-mineralized material will be placed as near as possible to the pit rims to reduce haulage costs. Mineralized material will be directed to stockpiles or to the mill. Underground material is direct fed to the mill. The average mill feed head grade during the first five years is 1.67 grams per tonne Au and is 1.30 g/t Au over the LOM.

The mining schedule considers one year of preproduction, followed by approximately 12.6 years of mill feed. The mill feed throughput is planned at 15,500 tonnes per day (tpd) for the first five years and then 19,200 tpd for the following 7.6 years. The mill feed comprises 67.9 million tonnes of open-pit material and 12.4 million tonnes of underground material. The open-pit strip ratio is 7.43 tonnes waste/tonnes mill feed. Over the mine life, total gold production is forecasted to be 2,106,000 oz from open-pit operations and 1,104,000 oz from underground operations.

Metallurgy and mineral processing

The process plant will employ gravity concentration, standard leaching with carbon-in-leach (CIL) technology for gold recovery. The process plant includes single-stage crushing followed by semi-autogenous (SAG) and ball milling, classification, gravity concentration, leach and CIL, and cyanide detoxification before tailings filtration. The filtered tailings will be stored in the filtered tailing storage facility (FTSF) for the first three years. After the new Beliveau/North open pit is depleted in year 3, the tailings will bypass the filtration plant and will be then deposited as a slurry to backfill this open pit. The process plant will treat 5.66 million tonnes of mineralized material per year at an average throughput of 15,500 tpd until the expansion in year 6.

The process plant will be expanded in year 6 of production to increase the plant capacity to treat seven Mt of material per year at an average throughput of 19,200 tpd. This will be done by adding secondary crushing, preleach thickening and increasing the primary grind size from 70 to 83 microns.

The mill design availability is 8,059 hours per year or 92 per cent. The crushing design availability is 5,694 hours per year or 65 per cent. The tailings filtration design availability is 7,183 hours per year or 84 per cent. The process plant has been designed to realize an average recovery of 95.7 per cent of the gold over the life of the Novador project based on metallurgical test work completed at Base Metallurgical Laboratories Ltd. in Kamloops, B.C., in 2022. Of this, 50 per cent of the gold will be extracted by gravity and a further 45.7 per cent by the leach/CIP process.

Site location and infrastructure

The Novador project is located approximately 25 kilometres east of the city of Val d'Or in the province of Quebec. The project is in a rich mining area with easy access to power, labour, communities, highways and a national railway adjacent to the proposed process plant.

The process plant site location selection considered various factors, including social, environmental, topographic, accessibility, proximity to existing infrastructure and overall flow of material to the FTSF. Centralized administration facilities, truck shop, wash bay, tire store, refuelling station, warehousing and explosive magazine are optimized for efficient use of facilities.

Based on continuing geochemical characterization and the geology of the various deposits, it can be considered that the waste rock, mineralized material and tailings should not be acid-generating nor leachable. These positive characteristics of the Novador project (simplified operation, easier water management and reduced closure risks) were incorporated into its design.

Based on a technology, preliminary siting, ground condition and deposition study for the Novador project, it was decided to filter the tailings and store them in a FTSF until the Beliveau/North open pit is depleted. Then, tailings will be deposited as slurry within the Beliveau/North open pit.

Filtered tailings are one of the most sustainable methods for storing tailings as there is no need for a dam to hold them in place or potential long-term storage issues. When dry stacking is applied, the filtered tailings (cake) will be handled using a combination of loaders, trucks and dozers to a stockpile immediately northwest of the filtering plant. The filtered tailings will be loaded into haul trucks for deposition on the FTSF, approximately 2.8 kilometres north of the process plant, by road.

When the deposition method changes to in-pit storage, the slurry will be pumped and transported by pipeline to the depleted new Beliveau/North open pit. This approach is also among the most sustainable methods for storing tailings and has the additional benefit of reducing energy consumption, lower operating cost and the backfilling of an open pit.

Runoff from the FTSF, as well as all storage facilities (rock, mineralized material and over burden stockpiles) will be collected in series of water management ponds and drainage ditches. A public road (Chemin Perron and Chemin Pascalis) is diverted to the north and to the west and thus goes around the site as indicated on the site layout.

Operating costs

Operating costs were derived using benchmark information in the Val d'Or region and are estimated at $44.52 per tonne milled. Pricing for reagents and consumables was solicited from qualified suppliers and reflects the expected pricing for the project. Reagents and consumables are being delivered by rail.

Capital costs

The total initial capital costs for the Novador project are estimated to be $602-million, including allowances for indirect costs. Sustaining capital costs are estimated at $818-million, including plant expansion in year 6.

Quotations were solicited from suppliers for the grinding section of the process plant equipment supply cost, which constitutes 36 per cent of the mechanical equipment cost of the project. The remaining mechanical equipment costs were benchmarked from recent Canadian mining studies.

Open-pit mining equipment is assumed to be leased (15-per-cent down payment with a 10-per-cent lease rate over five years).

The $709.5-million in sustaining mining capital includes $262.6-million for the open-pit mining fleet, $160.8-million for the underground (UG) mining fleet, and $277.5-million for the UG development and infrastructure, expected to be self-financed through operating cash flows. While the incremental UG production demands substantial capital injection, all UG mining enhances overall production profile and project value with the $1,750/oz gold price (base case for the updated PEA mine planning), while offering additional leverage to a potential increase in the gold price. Each UG operation will be evaluated in more detail in the next phase of the project to ensure that the sustaining and UG capital is providing incremental value and that it is timed to maximize IRR.

Cash flow analysis

The projected cash flow and sensitivities are indicated herein. The year 6 expansion and the UG development and infrastructure starting in year 2 will be self-financed.

Sensitivities

A sensitivity analysis was conducted on the base case pretax and after-tax NPV and IRR of the Novador project, using the following variables: metal price, initial capital expenditure, total operating costs and foreign exchange.

As shown herein, the sensitivity analysis revealed that the Novador project is most sensitive to changes in gold prices and foreign exchange, and less sensitive to initial capex and operating costs.

Opportunities for project enhancement

The Novador project still holds substantial exploration potential, which could extend the mine life beyond the 12.6 years outlined in the updated PEA. Probe did not consider any of the resources on the other Val d'Or East properties. Those could potentially be considered for further exploration and growth.

There is the potential for the underground mine plan to be further optimized to reduce capital cost and improve project economics by deferring development costs later into the mine life.

Ore sorting was part of the 2021 PEA following promising commercial test work results on the Pascalis trend mineralization. For this PEA, the process flowsheet was simplified by removing the ore sorting plant. There is the potential for reintegrating this technology in the project for some portion of the mill feed to reduce the amount of waste rock and to sell the ore sorting rejects as aggregate material in the construction industry.

The project is currently contemplated as a stand-alone operation with its own milling facilities. As part of its continuing process, the company is evaluating alternative mining and milling scenarios due to the excess milling capacity in the region.

Comparison of 2021 PEA and the updated PEA

This updated PEA represents the conclusion of three years of work since the last PEA in 2021. The attached table shows the information used to support the design bases and criteria for the Novador project.

The Novador project has changed significantly since the first PEA in 2021. It has expanded and now boasts a larger production profile. Some of the scope changes include a 55-per-cent increase in initial plant capacity, a larger mining fleet with a reduced number of open pits and a more substantial underground component that begins from the surface rather than the bottom of the open pits. The attached table provides a comparison between the 2021 PEA and the current updated PEA (2024).

Mineral resource estimate

The Novador project includes the properties on the Pascalis gold trend, the Monique gold trend and the Courvan gold trend, which are 100 per cent owned by Probe.

As part of its land consolidation strategy in the Val d'Or East camp, Probe earned a 60-per-cent interest in the Cadillac Break East property in joint venture with O3 Mining Inc., which includes the Sleepy deposit. The company also owns a 100-per-cent interest in the Val d'Or East Lapaska and Croinor properties.

Qualified person

Technical information in this release was supervised and approved by Mr. Dessureault, Probe's chief operating officer and a qualified person under NI 43-101.

About Probe Gold Inc.

Probe Gold is a leading Canadian gold exploration company focused on the acquisition, exploration and development of highly prospective gold properties. The company is well financed and dedicated to exploring and developing high-quality gold projects. Notably, it owns 100 per cent of its flagship asset, the multimillion-ounce Novador gold project in Quebec, as well as an early-stage Detour gold Quebec project. Probe controls a large land package of approximately 1,600 square kilometres of exploration ground within some of the most prolific gold belts in Quebec.

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