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Goldmining Inc
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Goldmining's Mina PEA pegs pretax NPV at $340M (U.S.)

2022-01-12 07:11 ET - News Release

Mr. Alastair Still reports


Goldmining Inc. has released a positive preliminary economic assessment (PEA) prepared in accordance with National Instrument 43-101 on the La Mina project located in Antioquia, Colombia. The independent PEA provides a compelling base case assessment for a mining operation with additional potential available through proposed exploration of the adjacent La Garrucha deposit. Development of the project would provide economic benefits to the company and local stakeholders.

Highlights (all currencies reported in U.S. dollars):

  • The project would produce over one million gold equivalent ounces over a 10.4-year mine life.
  • Production averaging 102,000 gold equivalent ounces per year over the fully operating years.
  • The project would produce over 165 million pounds of copper and over 600,000 ounces of silver, which are incorporated in the gold equivalent calculations.
  • The project generates a pretax net present value (NPV) of $340-million at a 5-per-cent discount rate and an after-tax NPV (net present value) of $232-million with an internal rate or return (IRR) of 14.5 per cent using metal prices of $1,600 per ounce gold, $21 per ounce silver and $3.39 per pound copper.
  • Attractive after-tax unit cash cost of $497 per gold ounce and all-in sustaining cost (AISC) of $698 per gold ounce (net of byproduct credits).
  • Low capital intensity of $299.5-million with a 10,000-tonne-per-day concentrator fed by a low strip ratio (3.6:1) open-pit mining operation.
  • The PEA envisions an open-pit mining scenario sourcing material from the La Cantera and the Middle zone deposits.
  • Drill-ready targets on the adjacent La Garrucha deposit have not been included.

Alastair Still, chief executive officer of Goldmining, commented: "We are extremely pleased with the positive economics demonstrated by this PEA on La Mina. This study represents a milestone for the company as we have produced our first PEA and continue to advance our projects to unlock value for our shareholders and local stakeholders. With current metal prices well above the $1,600 per ounce gold and $3.39 per pound copper used in the PEA, the project is highly leveraged to enhanced economics. We are also highly encouraged by the opportunities to build upon this PEA, including drill-ready targets at the nearby La Garrucha deposit, which, on the last hole (LME1106) drilled by the previous operator, yielded 271 metres of 1.03 g/t gold and 0.13 per cent copper."

                                   PEA FINANCIAL SUMMARY 
Parameter                                              Units                       Values

Net present value (5%)                   pretax    $ million                      $339.76
                                      after tax    $ million                       231.47
Internal rate of return (IRR)            pretax            %                         18.1
                                      after tax            %                         14.5
After-tax payback                                      years                          7.0
Pre-production capital                             $ million                       299.50
Sustaining capital                                 $ million   71.37 plus 17.38 (closure)
Life-of-mine (LOM) cash unit cost                       $/oz                        497.4
LOM all-in sustaining unit cost                         $/oz                        697.8
Metal prices
Copper                                                  $/lb                         3.39
Gold                                                    $/oz                        1,600
Silver                                                  $/oz                           21

This preliminary economic assessment is preliminary in nature, and there is no certainty that the reported results will be realized. Mineral resources used for the PEA include inferred mineral resources, which 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 projected economic performance will be realized. The purpose of the PEA is to demonstrate the economic viability of the La Mina project, and the results are only intended as an initial, first-pass review of the project economics based on preliminary information.

The PEA examined several mining scenarios with varying rates of production and cut-off grades and determined that a 10.4-year project life mining 37.8 million mineralized tonnes provided the best financial return using consensus metal prices.

Construction of this project is expected to be 24 months that will enable reaching 10,000 tonnes of process plant feed per day. The operation is designed to produce a single copper concentrate containing gold and silver credits with minimal deleterious elements. The relatively low capital costs of the La Mina project is a result of the project's proximity to established infrastructure including roads, power and an available work force.

The PEA was prepared by Metal Mining Consultants Inc. of Highlands Ranch, Colo., which has been involved with the La Mina project for the past 10 years and recently prepared the mineral resource estimate for the La Mina deposit.

                           PEA TECHNICAL SUMMARY
Parameter                                             Units          Values

Mine life                                             years            10.4
Mined mineralized material                   million tonnes            37.8
Process plant production rate                    tonnes/day          10,000
Process plant feed grade
Copper                                                    %            0.24
Gold                                                    g/t            0.69
Silver                                                  g/t            1.67
Gold equivalent                                         g/t            1.06
Strip ratio (waste:mineralized material)              ratio            3.60
Operating unit cost                             $/t process          $15.58
                                Copper          Gold        Silver     Gold equivalent

Metallurgical recovery             84%           82%           30%
Production                  165.11 mlb     687.2 koz     608.5 koz           1,045 koz
Payable                     160.15 mlb     666.6 koz     559.8 koz           1,013 koz

The mining plan uses conventional truck/loader open-pit methods employing a fleet of 91-tonne capacity haulage trucks and front-end loaders equipped with 12-cubic-metre buckets. Two pit areas will be mined over a period of 10.4 production years plus two years of prestripping. Mineralized material will be transported by haulage trucks to a nearby process plant, and waste rock will be stored in proximity to the open pits. Mining will be conducted at an initial rate of seven million total tonnes per annum (mtpa) or 19 kilotonnes per day (ktpd) to peak at 22 mtpa (60 ktpd) for total movement that will sustain the process plant.

The process plant feed is contained within an optimized subset of the mineral resource set out in the pit-constrained mineral resource estimate table. Collectively, the two pits contain 37.8 million tonnes of process plant feed (inclusive of mining dilution and loss factors) averaging 0.24 per cent Cu, 0.69 g/t Au and 1.67 g/t Ag. The process plant feed is associated with 136 million tonnes of waste rock resulting in an overall life-of-mine waste-to-mineralized-material strip ratio of 3.60:1.

The existing royalties have been included in the analysis and comprise a 2.0-per-cent net smelter return (NSR) royalty owned by Gold Royalty Corp., a gross revenue royalty (GRR) of 4.0 per cent on the precious metals and 5.0 per cent on base metals both imposed by the Colombian National Mining Agency.

Limited metallurgical testing was carried out at a reputable laboratory. The testwork has indicated a process flowsheet for a typical copper concentrate. Key components that describe the unit operating processes include the following:

  • Primary crushing and grinding in a semi-autogenous grinding/ball mill circuit to a nominal 300- to 150-micrometre grind size;
  • Froth flotation to generate a copper rougher concentrate, which is reground and subjected to two stages of cleaner flotation for copper grade improvement;
  • Recycling the copper flotation tails to the rougher scavenger for further recovery opportunity;
  • Copper concentrate is thickened, filtered and prepared for shipment to a smelter.

Mine closure has been accounted for and is expected to reclaim tailings and waste rock storage facilities.

                                CAPITAL COSTS 
                                (in millions)

                                    Initial     Sustaining        Total

Prestripping                         $46.30                      $46.30
Mining plus operational                              53.39        53.39
Process plant plus
operational                          140.00          5.001        45.00
Tailings management facility           6.00           4.00        10.00
Site infrastructure                   65.00                       65.00
Owner's cost plus contingency         42.20           8.98        51.18
Total capital                        299.50         71.373        70.87
Mine closure                                         17.38        17.38

                       Units $/oz                                     Gold price                
                                       $1,500     $1,550     $1,600     $1,650       $1,700    $1,750       $1,800

Pretax NPV (5%)        $ millions     $295.09     317.43     339.76     362.10       384.43    406.77       429.10
NPV (8%)               $ millions      184.76     203.17     221.57     239.97       258.37    276.77       295.17
NPV (10%)              $ millions      127.19     143.47     159.74     176.01       192.28    208.56       224.83
After-tax NPV (5%)     $ millions      199.14     215.30     231.47     247.63       263.80    279.97       296.13
IRR                             %        13.2       13.9       14.5       15.1         15.7      16.3         16.9
Payback                     years         7.2        7.1        7.0        6.9          6.8       6.6          6.6

Deposit                                       Grades                            Contained metal                   
                    Tonnes       Au        Ag        Cu      AuEq        Au         Ag         Cu        AuEq
                     (000)    (g/t)     (g/t)       (%)     (g/t)      (oz)       (oz)      (klb)        (oz)
La Cantera          18,024     0.86      2.05      0.32      1.33   498,346  1,187,917    125,586     770.697
Middle zone         10,223     0.50      1.26      0.11      0.68   164,335    382,966     24,940     223,495
Total indicated     28,247     0.73      1.76      0.24      1.09   662,680  1,602,040    150,526     989,463
La Cantera          12,034     0.69      1.84      0.29      1.13   266,956    711,883     78,190     437,189
Middle zone          1,599     0.39      1.17      0.09      0.53    20,049     60,147      3,056      27,246
Total inferred      13,633     0.65      1.76      0.27      1.05   287,005    772,030     81,246     462,168

Mineral resource estimate footnotes:

  1. The qualified person of the estimate is Scott Wilson, CPG, SME.
  2. Mineral resources are classified as indicated resources and inferred resources and are based on the 2014 CIM (Canadian Institute of Mining, Metallurgy and Petroleum) definition standards.
  3. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resources will be converted to mineral reserves.
  4. Numbers may not add up due to rounding.
  5. Cut-off grade: 0.25 g/t Au.
  6. The mineral resource estimate was based on U.S. dollar metal prices of $3.25/pound Cu, $1,600/ounce Au and $21/oz Ag.
  7. The quantity and grade of reported inferred mineral resources in this estimation are uncertain in nature and there has been insufficient exploration to define these inferred mineral resources as indicated or measured mineral resources.
  8. The author knows of no environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors that may materially affect the mineral resource estimate.

Goldmining will file a technical report for the La Mina PEA within 45 days of the date hereof.

Qualified persons

Mr. Wilson is an independent consultant acting as the qualified person, as defined in National Instrument 43-101, and is the primary author of the technical report for the mineral resource estimate and has reviewed and approved the mineral resource estimate and the preliminary economic assessment summarized in this news release. Mr. Wilson has over 31 years of experience in surface mining, resource estimation and strategic mine planning. Mr. Wilson is independent of the company under NI 43-101. Mr. Wilson, a qualified person, has verified the data underlying the information disclosed herein, including sampling, analytical and test data underlying the information by reviewing the reports of AAL, methodologies, results and all procedures undertaken for quality assurance and quality control in a manner consistent with industry practice, and all matters were consistent and accurate according to his professional judgment. There were no limitations on the verification process.

Paulo Pereira, PGeo, president of Goldmining, has supervised the preparation of this news release and has reviewed and approved the scientific and technical information contained herein. Each of Mr. Wilson, Mr. Cole and Mr. Pereira is a qualified person as defined in NI 43-101.

About Goldmining Inc.

Goldmining is a public mineral exploration company focused on the acquisition and development of gold assets in the Americas. Through its disciplined acquisition strategy, Goldmining now controls a diversified portfolio of resource-stage gold and gold-copper projects in Canada, United States, Brazil, Colombia and Peru. The company also owns 20 million shares of Gold Royalty Corp.

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