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Orca Gold Releases Feasibility Study with Annual Production of 228Koz of Gold for the First 7 Years at its Block 14 Gold Project in the Republic of the Sudan

 

 

 

 

 

Orca Gold Inc. (TSX-V:ORG) is pleased to announce the positive results of its Feasibility Study on the Block 14 Gold Project in the Republic of the Sudan.

 

FEASIBILITY STUDY HIGHLIGHTS (100% BASIS):

 

   
Probable Reserves 79.94Mt @ 1.11g/t for 2.85 Moz
Average Annual production:  
First 7 Years 5.8Mtpa @ 1.49g/t averaging 228,000oz Au/year
Life of Mine (“LOM”) 167,000oz Au/year
Mine Life 13.6 years
Production Costs: Yrs 1 – 7 LOM
Cash Costs $689/oz $707/oz
All-in Sustaining Costs (“AISC”) $789/oz $783/oz
After-Tax Net Present Value (“NPV”)

Discount rate: 5%; Gold Price: $1,250/oz

$403 million
After-Tax Internal Rate of Return (“IRR”) 24.2%
Payback Period 3.9 years
Pre-Production Capital $328 million
Sustaining Capital $181 million
FINAL PERMITTING In Progress
Note: All amounts stated are in US Dollars; Economic parameters are shown on a 100% basis                              

 

“We are pleased to announce the results of our Feasibility Study on Block 14. The Study clearly demonstrates the solid economics and scope of the proposed development and operation at Block 14. Block 14 is one of very few pre-development projects in Africa with such a positive production and economic profile. In fact, at a production rate of almost 230,000 ounces of gold per annum for the first seven years, a low production cash cost per ounce and a significant exploration upside, this project stands out not only in Africa but on an international scale,” commented Rick Clark, CEO of Orca. “We are well-advanced in permitting the development of Block 14 and expect a positive decision from the government of the Sudan early in the New Year.”

 

FEASIBILITY STUDY DETAIL:

 

Mineral Resources:

 

 

Mineral Resource Statement – September 19, 2018
Classification Tonnes (million) Grade (g/t Au) Contained Ounces
(000)
Indicated 79.9 1.30 3,342
Inferred 18.5 1.2 711
1. CIM Definition Standards were followed for the classification of Mineral Resources
2. Mineral Resources are inclusive of Mineral Reserves
3. Mineral Resources are reported above a cut-off grade of 0.6g/t 

 

 

Mineral Reserves:

 

 

Mineral Reserve Statement – November 7, 2018
Classification Tonnes (million) Grade (g/t Au) Contained Ounces
(000)
Probable Reserves 79.943 1.11 2,853
1. CIM Definition Standards were followed for the classification of Mineral Reserves
2. Mineral Reserves were optimised using a gold price of $1,100
3. Mining Cut-off grades vary between 0.32g/t and 0.90g/t

 

 

Key Operating Parameters:

 

 

   
Milling Capacity 6.0Mtpa
Probable Reserves:  
Tonnes (000) 79,943
Grade (Au g/t) 1.11
Mine Life 13.6 years
LOM:  
Average Annual Production (oz) 167,000
Recovery (%) 82
Cash Costs ($/oz) 707
AISC ($/oz) 783
Strip Ratio 1.49:1
Years 1-7:  
Average Annual Production (oz) 228,000
Grade (g/t) 1.49
Cash Costs ($/oz) 697
Note:  All amounts stated are in US Dollars; Economic parameters are shown on a 100% basis

 

 

Capital Costs:

 

Pre-production capital costs are estimated at $328 million including $36 million in contingency and $185 million for LOM Sustaining Capital. The construction period is estimated at 27 months.

 

  Pre-Production Capital Sustaining Capital
Mine 15  
Process Plant 164 35
Generator 4 66
Water Pipeline 26  
TSF 17 54
Camp 3 14
Infrastructure 12  
EPCM 31  
Owner 21  
Closure   12
Contingency 36  
Total 328 181

 

 

Mining and Processing:

 

The preferred mining option for Block 14 is a conventional truck and shovel open pit operation feeding a mineral processing circuit incorporating primary crushing, SAG and Ball mill grinding followed by carbon-in-pulp leaching, stripping and electrowinning.

 

Pre-production will enable the training of the mining crews and is estimated to produce 0.90Mt of waste stripping and 0.35Mt of ore, which will be stockpiled. The mining will be completed in eight years at an average mining rate of 22Mtpa.  A low-grade stockpile (average 0.71g/t) will be created which enables processing of higher-grade ore for the first 7 years of the mine life with an average grade of 1.49g/t. The stockpiled ore will be treated over the last 6.6 years.

 

77.3MT @ 1.07g/t will be mined from the GSS group of pits adjacent the processing plant. 2.6Mt @ 2.36g/t will be mined from the Wadi Doum satellite deposit and trucked 65km to the processing plant during the first five years of the mine life.

 

 

  LOM ($/oz) LOM ($/tonne)
Mining 237 6.94
SP Re-handle 15 0.44
Processing 311 9.12
G & A 59 1.72
Refining 6 0.18
Silver Credit (9) (0.26)
Royalties 88 2.57
Total Cash Costs 707 20.69
Sustaining Capital 72 2.11
Closure 4 0.12
All-in Sustaining Costs1 783 22.92
1. Quoted All-in Sustaining Costs are presented as defined by the World Gold Council and include Total Cash Costs, G&A, Sustaining Capital and Closure Costs
2. Operating costs are based on assumed fuel prices of $0.70/l for diesel and $0.525/l for HFO380. LOM power costs used equate to $0.136/kWhr

 

 

The site layouts (Figures 1 & 2), which can be found at the end of the release, for GSS and Wadi Doum show the location of the open pits, waste dumps, stockpiles process plant and infrastructure.

 

Production Profile:

 

 

    Total -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Mined Mt 79.9 0.4 7.5 9.8 9.9 10.3 12.2 12.2 13.1 4.6            
Grade Au g/t 1.11 1.38 1.10 1.08 1.13 1.14 1.15 1.06 1.08 1.18            
                                   
Processed Mt 79.9   4.8 5.8 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 3.3
Grade Au g/t 1.11   1.43 1.44 1.45 1.51 1.64 1.48 1.49 1.14 0.74 0.68 0.68 0.62 0.55 0.49
                                   
Recovered Au koz 2,341   193 229 230 235 251 227 232 175 116 109 109 100 89 47
  Ag koz 1,195   26 79 122 164 168 129 124 100 60 69 68 53 27 6

 

 

Economic Profile:

 

 

USD Million Total -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Pre-Production CapEx (328.2) (9.7) (120.4) (198.1)                              
Sustaining CapEx (180.8)       (21.8) (25.4) (34.5) (26.1) (21.2) (6.0) (6.8) (3.5) (8.2) (3.5) (7.7)   (3.9) (8.8) (3.3)
Revenue 2,932.6       240.1 285.9 287.6 294.7 315.2 284.6 290.5 219.3 145.2 137.0 136.9 125.8 111.2 58.7  
Selling Costs (14.1)       (0.9) (1.2) (1.4) (1.6) (1.7) (1.4) (1.4) (1.1) (0.7) (0.7) (0.7) (0.6) (0.5) (0.2)  
Royalties (205.3)       (16.8) (20.0) (20.1) (20.6) (22.1) (19.9) (20.3) (15.4) (10.2) (9.6) (9.6) (8.8) (7.8) (4.1)  
Op Costs – Mining (559.4)     (5.0) (57.0) (64.8) (76.5) (97.1) (97.2) (75.2) (66.6) (20.1)              
Op Costs – Process (Fix & Var) (728.8)       (41.7) (49.9) (53.8) (53.9) (55.3) (55.3) (58.2) (59.6) (61.1) (53.5) (54.2) (55.2) (50.1) (26.8)  
Op Costs – G&A (137.6)       (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (10.2) (5.7)  
Operating Profit 1,257.4       113.1 139.4 125.3 110.7 128.4 122.3 133.2 110.0 57.9 57.8 57.0 45.8 37.5 19.0  
Net Cash Flows, before tax 748.4 (9.7) (120.4) (198.1) 91.3 114.0 90.9 84.7 107.3 116.3 126.4 106.5 49.7 54.3 49.2 45.8 33.6 10.1 (3.3)
Depreciation (520.9)       (33.7) (42.3) (46.2) (50.3) (56.9) (51.9) (53.8) (40.6) (27.8) (26.2) (27.5) (25.3) (25.0) (13.2)  
Taxes Payable (104.4)       (11.9) (14.0) (11.4) (8.5) (10.2) (10.0) (11.4) (9.9) (4.0) (4.2) (3.9) (3.1) (1.9)    
Net Cash Flows, after tax 644.0 (9.7) (120.4) (198.1) 79.3 99.9 79.5 76.1 97.1 106.3 115.0 96.6 45.7 50.1 45.3 42.7 31.7 10.1 (3.3)
NPV Post Tax 403                                    
IRR Post Tax (%) 24.2%                                    
Cash cost Au ($/oz) 707       657 634 698 772 732 705 669 615 745 714 722 788 823 841  
All-in sustaining cost Au ($/oz) 783       773 748 851 886 819 734 701 638 819 750 797 792 871 848  

 

 

Gold Price Sensitivity Analysis:

 

 

     
  After Tax NPV IRR
Discount Rate 5% (Millions) %
Au

Price

$1,100 193 14.8
$1,200 333 21.2
$1,250 403 24.2
$1,300 473 27.1
$1,400 612 32.9
$1,500 752 38.4

 

 

Feasibility Study Engineers:

 

The Feasibility Study was completed by Lycopodium Minerals Pty Limited, Australia, with inputs from discipline specific Qualified Persons (QPs). The QPs are independent and have reviewed and approved this news release. The areas of responsibility for each QP involved in preparing the Feasibility Study are:

 

 

Project Manager QP:  
   
Study Manager:                                Dr. Geoff Duckworth: Lycopodium Minerals Pty. Ltd.
   
Discipline Specific QPs:  
   
Mineral Resource:           Nicholas Johnson: Consulting Geologist, MPR Geological Consultants Pty Ltd.
Mining:                                 Chris Reardon: Consultant, Deswik Europe Ltd.
Metallurgy:                         Mike Hallewell: Consultant, MPH Minerals Consultancy Ltd.
Hydrogeology:                  Pieter Labuschagne: Consultant, GCS (Pty) Ltd.
Environment:                    Carl Nicholas: Consultant, Mineesia Ltd.
Tailings:                                Tim Rowles: Consultant, Knight Piésold Pty. Ltd.

 

 

ABOUT ORCA GOLD INC.

 

Orca Gold Inc. is a Canadian resource company focused on exploration and development opportunities in Africa, where it is currently developing the 70%-owned Block 14 gold project in the Republic of the Sudan and the Morondo gold project in the West African country of Cote d’Ivoire. The Company has an experienced board of directors and management team and a strong balance sheet.

 

Posted November 8, 2018

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