Benton Resources Inc. (TSX-V:BEX) and its joint venture partner Nordmin Engineering Ltd. are pleased to release the results of a positive preliminary economic assessment for their Cape Ray Gold Project, located approximately 20km northeast of Port aux Basque, Newfoundland. The results of the PEA include a pre-tax net present value at a 7% discount rate of $48.4 million with a pre-tax internal rate of return of 29% and a post-tax NPV at a 7% discount rate of $32.6 million with a post-tax IRR of 24%.

The PEA is based on the mineral resource estimate completed by Sibley Basin Group Ltd. in the National Instrument 43-101 report dated April 29, 2015 entitled “Mineral Resource Estimate Technical Report For The Cape Ray Property,04,41,51 and Windowglass Hill Deposits, Isle aux Morts Area, Newfoundland and Labrador, Canada” and amended in this report.

Highlights from the PEA, with the base-case gold price of $1,200 (U.S.) per ounce and an exchange rate of $1.25CDN/USD, are as follows (all figures in Canadian dollars unless otherwise stated):

• Pre-production Capital is $47.3 million with a contingency of $4.7 million included within the initial Capital. Pre-production is for a 2 year period.
• Sustaining Capital of $33.7 million for the Life of Mine.
• Pre-tax NPV (7%) of $48.4 million and internal rate of return of 29%.
• Post-tax NPV (7%) of $32.6 million and internal rate of return of 24%.
• Pre-tax Net Revenue of $88.4 million over 6 year LOM.
• Post-tax Net Revenue of $63.4 million over 6 year LOM.
• Positive Cash-flow is realized in year 3.
• 1,700,000 tonnes of mill feed averaging a combined 4.6 g/t gold and 4.8 g/t silver.
• Mill operates at average tonnage of 851 tonnes per day.
• Total production of 250,000 ounces of gold and 260,000 ounces of silver.
• Gold recovery of 97% and Silver recovery 45%.

Stephen Stares, President and CEO of Benton stated “the receipt of a positive PEA demonstrating strong economics over the life of mine is a major milestone for Benton. We see numerous opportunities to further enhance the economics through additional studies and exploration with a high probability for resource expansion and good potential for new discoveries across the property. We will now focus on advancing the Cape Ray project toward prefeasibility through additional exploration, environmental permitting and further studies.” 

Benton recognizes that this is an undeveloped area of Newfoundland. As such, protecting the environment is of great importance. To facilitate the development of a sustainable project, Nordmin has experts on staff to complete the necessary studies required concerning environmental monitoring, assessment and permitting matters.

The Company has initiated work towards firming up costs and preparing a Feasibility Study. Apart from environmental baseline studies, hydrology monitoring, flora and fauna studies. A NI 43-101 technical report for Cape Ray PEA will be filed on SEDAR (www.sedar.com) within 45 days.

The reader should be cautioned that the PEA is preliminary in nature. It contains 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. There is no certainty that the results of the PEA will be realized.

Resources:

All of the economics are completed on indicated and inferred categories of the resource model. A cut-off grade of 4.0 g/t Au was used for underground resources and a cut-off grade of 1.0 g/t Au was used for the open pit resources. Resource estimates by deposit are listed below:

1. Open Pit Cut-Off Grade
2. Underground Cut-Off Grade

CAPE RAY COMBINED OPEN-PIT AND UNDERGROUND MINE KEY ECONOMIC ASSUMPTIONS AND RESULTS

Capital and operating costs:

The Cape Ray Project has been envisioned as a combined open-pit and underground mining operation. Open-pit and underground mining are anticipated to be completed by contract mining companies. The equipment will be supplied by the contractor that is awarded the work.

Grid electrical power will provide the majority of the electrical power to the project over the life of the mine. The work force is expected to come from the Isle aux Morts area for the operation of the Mill. The rest of the workforce will be the responsibility of the contractor. 

TOTAL CAPITAL COST ESTIMATE:

Production and Processing:

Operations for the Cape Ray project is planned to have combined Open Pit and Underground Mining. Each deposit will be campaigned separately with use of contractors. The initial estimated mill feed will be 502,902 tonnes from 41 Deposit open pit operations. The underground mining operation at the 04 Deposit will produce 479,299 tonnes.

Once the 41 Deposit is completed, there will be a small underground resource below the pit containing the remaining potentially economic ore. The second open pit operation will produce 328,288 tonnes from the Windowglass Hill deposit. The 51 underground deposit will commence after the 04 Deposit is completed and will produce 347,144 tonnes.

The process plant includes conventional crushing, grinding, gravity, and whole ore cyanide leach. A gold and silver doré will be produced on site. Process reagents will be removed from the plant tailings prior to placement in a tailings management facility.

Mining Costs:

About Benton Resources Inc.

Benton Resources Inc is a well-funded Canadian-based junior with a diversified property portfolio in Gold-Silver, Nickel, Copper, and Platinum group elements.