Mr. Hugh Agro reports
REVIVAL GOLD DELIVERS SOLID PHASE ONE PRELIMINARY ECONOMIC ASSESSMENT
has provided positive results from a preliminary economic assessment (PEA) on the company's Beartrack-Arnett phase one heap leach gold project located in Idaho, United States.
All amounts shown are in United States dollars and metric units of measurement unless otherwise stated.
heap leach gold project -- PEA highlights
of gold per year for a total of 506,000 ounces of gold over an initial
seven-year mine life;
capital of $100-million and life-of-mine (LOM) sustaining capital of $61-million;
Total cash cost of $809
per ounce and all-in sustaining cost of $1,057
(net present value) at a 5-per-cent discount rate of $88-million and after-tax IRR
(internal rate of return) of
per cent at $1,550
gold increasing to a $211-million NPV
5 per cent and
49-per-cent IRR at $1,950
- After-tax payback
technical and execution risk of a brownfields project with existing infrastructure and recent history as the largest past-producing gold mine in Idaho;
Excellent additional exploration potential as demonstrated by this season's drill results and with over 10 kilometres of favourable geological structure to explore.
This PEA 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, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
For the purposes of this phase one PEA, only oxide and partially oxidized mineralization amenable to gold recovery using standard cyanide heap leach processing was evaluated representing less than a third of available mineralized material. Beartrack-Arnett also hosts a significant sulphide resource, much of which was not included in this PEA.
"This PEA supports Revival Gold's plans to resume meaningful heap leach gold production from Beartrack-Arnett with low restart capital and robust economics," commented Hugh Agro, president and chief executive officer. "Beartrack-Arnett ranks as one of the largest independently owned undeveloped gold deposits in the United States. As a brownfield site, Beartrack-Arnett offers significant existing baseline environmental data, infrastructure and operating history for Revival Gold to utilize. This should translate into shorter permitting timelines and lower technical and execution risk. Over the course of the next two years Revival Gold will continue with its exploration strategy to expand the resource base at Beartrack-Arnett while progressing the first phase heap leach project towards a production decision. We also intend to evaluate the potential for a second phase sulphide milling project so that we might fully realize the inherent value of all the gold resources identified at Beartrack-Arnett to date."
The PEA was prepared in accordance with National Instrument 43-101 by Wood PLC of Oakville, Canada, and Boise, Idaho, with an effective date of Nov. 17, 2020. The company will file a technical report summarizing the PEA on the company's website and on SEDAR in accordance with NI 43-101 within 45 days.
Management will host a conference call later today to discuss the results of the PEA. Call-in information below:
Scheduled start: Nov. 17, 2020, 10 a.m. EST
Call-in number: 416-764-8658
Toll-free in North America: 888-886-7786
A replay of the conference call will be available for one week at 416-764-8691 or toll-free in North America at 877-674-6060. Playback passcode 347502 (pound sign).
TECHNICAL INPUTS AND FINANCIAL ASSUMPTIONS
Economics Units Pretax Posttax
Net present value (NPV5%) US$ M $103 $88
Internal rate of return (IRR) % 28% 25%
Payback period (undiscounted) years 2.9 3.0
LOM average annual cash flow US$ M $22 $19
LOM cumulative cash flow (undiscounted) US$ M $153 $134
LOM average cash costs US$ per ounce $809
LOM average AISC -- all-in sustaining costs US$ per ounce $1,057
LOM average AIC -- all-in costs US$ per ounce $1,254
Preproduction capital costs US$ M $100
Sustaining capital costs (LOM) US$ M $62
Peak investment US$ M $112
Gold price assumption US$ per ounce $1,550
Royalty per ounce $19
Mine life years 7
Head grade (diluted) g/t Au 0.87
Average recovery % (FA) 60%
Average annual mining rate tonnes/day 12,000
Average annual gold production ounces/year 72,288
Total LOM recovered gold ounces 506,016
Mineral resource estimate
The mineral resource estimate has been reported in accordance with National Instrument 43-101 and was prepared by RPA Inc., a subsidiary of SLR Consulting Ltd., with an effective date of Dec. 10, 2019 (see Revival Gold press release dated Feb. 3, 2020, and the technical report on the Beartrack-Arnett gold project, Lemhi county, Idaho, United States, dated Feb. 21, 2020).
Following the Feb. 21, 2020, technical report, a follow-up review of the Arnett resources and a sensitivity analysis conducted by RPA resulted in a fine-tuning and reclassification of 3,000 ounces from the inferred to the indicated category. For this PEA, the resource estimate at Arnett has been restated to reflect this change and is not considered material to the economics of the property as the total indicated plus inferred remains unchanged. Results from Revival Gold's 2020 exploration drilling program are not included in this estimate.
MINERAL RESOURCE ESTIMATE
Tonnes Gold grade Contained gold
Resource category (000s t) (g/t Au) (000 oz)
Beartrack -- open pit 11,900 0.56 215
Arnett -- open pit 2,500 0.65 52
Beartrack -- open pit 22,216 1.52 1,089
Beartrack -- underground NA NA NA
Total indicated 36,616 1.15 1,356
Beartrack -- open pit 9,961 0.53 169
Arnett -- open pit 8,200 0.55 144
Beartrack -- open pit 22,228 1.19 850
Beartrack -- underground 6,700 2.19 471
Total inferred 47,089 1.08 1,638
1. Effective date of Dec. 10, 2019. CIM (2014) definitions were
used for mineral resource classification.
2. Qualified persons: Mark B. Mathisen, CPG, Ryan Rodney, CPG,
Kathleen A. Altman, PhD, PE. Mineral resources were tabulated for
model blocks with positive net value located within an optimized
3. The price, recovery and cost data translate to a break-even gold
cut-off grade of approximately 0.52 g/t Au for mineral resources
amenable to the mill option and open-pit mining; and 0.17 g/t Au
for the mineral resources amenable to the leach option and open-pit
mining at Beartrack; a break-even gold cut-off grade of approximately
1.26 g/t Au for the incremental underground mill option at Beartrack,
and approximately 0.19 g/t Au for the leach option and open-pit mining
at Arnett. The cut-off grades include considerations of metal price,
process plant recovery, mining, processing, and general and
administrative costs. A gold price of $1,400 (U.S.) per ounce was
used in the estimation. Additional details below.
4. Tonnes are based on bulk density of each lithologic unit ranging at
Beartrack from 2.0 tonnes per cubic metre to 2.75 t/cubic m. An average
bulk density of 2.35 t/cubic m was used at Arnett.
5. Leachability is yet to be determined and further metallurgical studies
are required to fully understand the behaviour of transitional and
sulphide ores when mixed with readily leachable oxide materials. Leach
material defined by cyanide soluble grade leach characteristics.
6. Mineral resources that are not mineral reserves do not have demonstrated
7. Rounding may result in apparent discrepancies between tonnes, grade and
contained metal content. The geological model supporting the mineral
resource model is based on interpretations based on drilling and mapping
which may change with more data. The metallurgical sampling data may not be
representative of the material as a whole, or may have significant variations
locally in the metallurgical characteristics that could affect cost or
8. The cut-off grade for the open-pit mill resource assumes a 20,000-tonne-per-day
flotation mill with pressure oxidation of flotation concentrate followed by
cyanidation of the concentrate and the flotation tailings, with gold recovery
of 94 per cent, pit slopes of 37 per cent to 50 per cent, mining costs of
$2.25 per tonne, rehandle costs of 10 cents per tonne, general and administration
costs of 50 cents to $1 per tonne and a mill processing cost of $18.46 per tonne.
9. The cut-off grade for the mineral resources amenable to underground mining and
mill processing assumes a 3,000 tpd, ramp-access, mechanized mine with a bulk
mining method and mining cost of $35 per tonne.
10. The cut-off grade for the mineral resources amenable to open-pit mining and heap
leach processing assumes recoveries of 85 per cent of cyanide soluble gold at
Beartrack and 75 per cent of contained gold at Arnett. Pit slopes of 37 per cent to
50 per cent. Mining costs were assumed to be $2.25 per tonne, G&A costs of 50 cents
to $1 per tonne and heap leach processing costs of $3.25 per tonne processed.
MINE PRODUCTION SCHEDULE
Item/year PP1 Y1 Y2 Y3 Y4 Y5
Mined processed material Tonnes/day NA 12,003 12,003 12,003 12,003 12,003
Mined processed material Tonnes 000s 0 4,381 4,381 4,381 4,381 4,381
Mined waste Tonnes 000s 5,573 11,953 11,953 11,953 11,953 11,953
Mined total Tonnes 000s 5,573 16,334 16,334 16,334 16,334 16,334
Stripping ratio Waste to processed material NA 2.7 2.7 2.7 2.7 2.7
Head grade g/t Au 0.00 1.13 0.82 0.77 1.20 0.87
Contained gold Ounces 0 159,475 116,084 107,786 169,045 122,459
Recovery % (FA) 0% 47% 63% 65% 46% 60%
Recovered gold Ounces 0 75,177 73,263 70,084 77,462 73,620
Item/year Y6 Y7 Life of mine
Mined processed material Tonnes/day 12,004 10,737 11,822
Mined processed material Tonnes 000s 4,382 3,919 30,206
Mined waste Tonnes 000s 11,952 8,290 85,579
Mined total Tonnes 000s 16,334 12,209 115,786
Stripping ratio Waste to processed material 2.7 2.1 2.8
Head grade g/t Au 0.77 0.52 0.87
Contained gold Ounces 107,922 65,234 848,005
Recovery % (FA) 73% 89% 60%
Recovered gold Ounces 78,494 57,916 506,016
Existing infrastructure incorporated into the PEA includes the main access road, the main power line, the ADR plant, solution ponds, water treatment plant, the core warehouse and portions of the existing road from Beartrack to Arnett.
Preproduction capital costs include a 22-per-cent contingency on direct and indirect costs. The preproduction capital costs also include owner's costs, EPCM (engineering, procurement and construction management) costs, operating inventories, insurance and indirect costs. Major mining equipment is included in the financial analysis under an operating lease arrangement.
Trade-off studies were evaluated including developing crushing and leach pad facilities at the Arnett deposit (together with a power line from Beartrack), mobile compared with stationary crushing facilities, contractor mining compared to owner operation in the first two years, and a higher early cash flow mining plan alternative.
The "Capital cost summary"
table summarizes estimated capital costs. The estimating cost accuracy for the study is plus or minus 35 per cent (AACE Class 5). Rows and columns may not add precisely due to rounding.
CAPITAL COST SUMMARY
Preproduction Sustaining Life of mine
Item capital (US $M) capital (US $M) capital (US $M)
Open-pit mine $16 $5 $21
Heap leach facilities $12 $40 $52
Process facilities $19 $2 $21
Infrastructure $15 $3 $18
Indirect costs $10 $2 $12
Owner's costs $8 $0 $8
Contingency $20 $10 $30
Subtotal $100 $62 $162
Mine equipment lease $21 $8 $29
Working capital $7 -$7 $0
Reclamation/closure $4 $13 $17
Grand total $132 $75 $207
Owner operating costs were developed from first principles and are summarized in the "Operating cost summary" table.
OPERATING COST SUMMARY
Costs Units US$
Mining Per tonne $2.05
Stripping ratio Waste to processed material 2.8
Mining Per tonne processed $7.49
Processing Per tonne processed $4.65
G&A Per tonne processed $1.10
Operating costs Per tonne processed $13.24
Total cash costs Per ounce gold sold $809
All-in sustaining costs Per ounce gold sold $1,057
All-in capital costs Per ounce gold sold $1,254
The estimated average recovery of gold from the heap leach pad in the PEA is estimated to be 60 per cent. The estimated average recovery reflects recoveries of 87 per cent for oxide material, 55 per cent for transition material and 28 per cent for sulphide material. A breakdown of the type of mineralization processed and estimated heap leach recoveries by category of mineralization is summarized in the "Heap leach recoveries by category" table.
HEAP LEACH RECOVERIES BY CATEGORY
PEA classification Material Heap leach
of material processed processed (M tonnes) gold recovery
Oxide 19 87%
Transition 5 55%
Sulphide 6 28%
Heap leach PEA total 30 60%
Gold price sensitivities
The "Gold price sensitivity" table demonstrates the posttax sensitivities of the NPV and IRR to the price of gold per ounce. The base case, highlighted in the table, assumes $1,550 (U.S.) per ounce of gold.
GOLD PRICE SENSITIVITY
Economic sensitivities to gold
Gold price NPV 5%
($US per ounce) ($US M) IRR (%)
$1,350 $22 11
$1,450 $55 18
$1,550 $88 25
$1,650 $119 32
$1,750 $150 38
$1,850 $180 43
$1,950 $211 49
Project economic results are most sensitive to revenue drivers (gold price, gold grade and recovery). Results are less sensitive to input operating and capital costs.
The PEA outlined several initiatives that may enhance the potential of Beartrack-Arnett including:
Exploration drilling to expand the heap leach mineral resources in the Haidee area at Arnett;
Exploration drilling to identify additional mineral resources to process by heap leach or mill at Beartrack;
Further technical work on the segregation of transition and sulphide heap leach pads for potential further future processing and gold recovery in a milling scenario to reduce the final closure and reclamation requirement;
Potential to increase the production rate for a heap leach operation beyond 12,000 tonnes per day with the discovery of additional mineral resources amenable to heap leach recovery;
Potential to incorporate a mill operation in conjunction with the heap leach operation to fully realize all potential value from the mineral resources identified.
The recommended follow-up program in the PEA includes two phases of exploration and infill drilling, and the completion of a prefeasibility study for the phase one heap leach project. The program supports the required studies and public consultation for completion of the National Environmental Policy Act (or NEPA) process, with the U.S. Forest Service as the lead agency, as well as for securing required state and local permits.
In addition, the recommended program provides for the completion of a preliminary economic assessment on a phase two milling scenario at Beartrack.
Area Total cost ($US M) Description
Phase 1 Beartrack diamond drilling $2.0 Infill and exploration
Phase 1 Arnett diamond drilling $1.0 Infill and exploration
Phase 2 diamond drilling $6.0 Infill and exploration
Mineral resource estimate $0.3 Update after drilling
Engineering field program drilling $1.3 Geotechnical, metallurgy, hydrology
Engineering field programs $0.8 Geotechnical, metallurgy, hydrology
Technical/economic studies $2.0 Heap leach PFS, milling PEA
Environmental management planning $0.4 Baseline environmental, ARD study
Environmental studies, permits $2.5 Heap leach project, post-PFS
Project management and administration $1.5 Indirect costs, management, contingency
Total work recommendation $17.7
Independent qualified persons
The preliminary economic assessment was prepared for Revival Gold by independent qualified persons (QPs) under NI 43-101 from Wood from Oakville, Canada, and Boise, USA, RPA/SLC from Toronto, Canada, and Denver, Colo., and KC Harvey Environmental LLC from Bozeman, Mont. The independent QPs have reviewed and approved the economic and technical information of this press release derived from sections of the PEA that they are responsible for preparing, and are named below:
Kirk Hanson, PE, technical director, mining and financial model, site visit -- Wood;
Ben Bissonnette, PEng, director, metallurgy and process engineering -- Wood;
Paul Baluch, PEng, PE, technical director, civil structural architectural -- Wood;
Mark B. Mathisen, CPG -- mineral resource estimate, site visit -- SLR/RPA;
David Cameron, PE -- environmental, reclamation and closure plan, site visit -- KC Harvey.
Other technical information included in this press release has been reviewed and approved by Steven T. Priesmeyer, CPG, a QP and vice-president of exploration for the company, and Rodney A. Cooper, PEng, a QP and a consultant to the company. Both have conducted site visits.
Further details on the PEA and the complete PEA study document can be found on the company's website or on SEDAR within 45 days of this news release.
About Revival Gold Inc.
Revival Gold is a growth-focused gold exploration and development company. The company has the right to acquire a 100-per-cent interest in Meridian Beartrack Co., owner of the former producing Beartrack gold project located in Lemhi county, Idaho. Revival Gold also owns rights to a 100-per-cent interest in the neighbouring Arnett gold project.
Beartrack-Arnett is the largest past-producing gold mine in Idaho and hosts the second-largest known deposit of gold in the state. A preliminary economic assessment is under way on the potential restart of a phase one open-pit heap leach operation and exploration continues focused on expanding the current indicated mineral resource of 36.6 million tonnes at 1.15 g/t gold containing 1.36 million ounces of gold and inferred mineral resource of 47.1 million tonnes at 1.08 g/t gold containing 1.64 million ounces of gold. The mineralized trend at Beartrack extends for over five km and is open on strike and at depth. Mineralization at Arnett is open in all directions.
For further details, including key assumptions, parameters and methods used to estimate the mineral resources, and data verification, please see the company's NI 43-101-compliant technical report titled "Technical Report on the Beartrack-Arnett Gold Project, Lemhi County, Idaho, USA" dated Feb. 21, 2020.
Revival Gold has approximately 71.2 million shares outstanding and had a cash balance of approximately $12.7-million (Canadian) on Sept. 30, 2020.
We seek Safe Harbor.
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