Benton Resources Inc. (TSX-V:BEX) and its joint venture partner Nordmin Engineering Ltd. is pleased to release the results of an updated positive preliminary economic assessment. Included with this PEA update is the announcement on the advanced Environmental Assessment progress for its Cape Ray Gold Project, located approximately 20 kilometers northeast of Port aux Basques, Newfoundland.

The 2016 drilling program provided the team with numerous insights into the nature of this project. It allowed the team to revise the geologic and resource models to better represent the intrinsic nature of the mineral resource, and make a re-assessment to the overall approach and layout of the proposed mine design.

The updated results of the PEA include a pre-tax net present value at a 7 percent discount rate of $82.2 million with a pre-tax internal rate of return of 40 percent and a post-tax NPV at a 7 percent discount rate of $56.9 million with a post-tax IRR of 34 percent.

The PEA is based on the mineral resource estimate completed by Marc Jutras, P.Eng., M.A.Sc., outlined in the National Instrument 43-101 technical report update.

Highlights from the PEA, with the base-case gold price of $1,306 (U.S.) per ounce and an exchange rate of $1.26 CAD/USD, are as follows (all figures in Canadian dollars unless otherwise stated):

• Pre-production Capital is $54.5 million with a contingency of 10% included within the initial capital. Pre-production is for a 2 year period.
• Sustaining Capital $27 million for the Life of Mine.
• Pre-tax NPV (7%) of $82.2 million and internal rate of return of 40%.
• Post-tax NPV (7%) of $56.9 million and internal rate of return of 34%.
• Pre-tax Net Revenue of $146.8 million over 9 year LOM.
• Post-tax Net Revenue of $104.3 million over 9 year LOM.
• Positive Cash-flow is realized in year 2.
• 2.8 million tonnes of mill feed averaging a combined 3.3 g/t gold and 9.7 g/t silver.
• Mill operates at average tonnage of 1,000 tonnes per day.
• Total production of 291,000 ounces of gold and 553,000 ounces of silver.
• Gold recovery of 98% and Silver recovery 63%.

Chris Dougherty, P.Eng., President of Nordmin stated “the PEA Update is something we felt necessary given the extensive work we have completed in the last 6 months. The understanding developed through the completion of the 5000 metre drilling campaign in November has positively changed our overall knowledge and understanding of these zones”.

All of the economics are completed on Indicated and Inferred categories of the resource model.

The table below compares the change in IRR and NPV from the 2016 PEA and the 2017 revision.

Mineral Resources – Effective date of February 1, 2017

1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
2. The CIM definitions were followed for the classification of Measured, Indicated, and Inferred mineral resources.
3. The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.

“The receipt of a positive PEA demonstrating strong economics over the life of mine is a major milestone for Benton,” stated Stephen Stares, President and CEO of 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 feasibility 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, the joint partner, 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 prefeasibility study. Apart from further metallurgical studies, the work will include drilling and tailings characterization as well as 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.

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 an open-pit mine with starter pits for all the zones and one underground mining operation for the 51 zone. 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 both Open Pit and Underground Mining. Each zone will be campaigned separately with the use of contractors. The initial estimated mill feed will come from the 04 zone. Once the 04 pit is completed the 51 pit will commence to be mined followed by the 41 pit. The underground development for the 51 zone will start during the mining of the 41 pit. The start of the Window Glass pit will begin once the 41 pit is mined. The Window Glass pit and 51 underground zone will be mined simultaneously. All the zones will give a current mine life of 9 years combined at a milling through-put of 1,000 tonnes per day. 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.

* The mill feed tonnes in the mine plan include Inferred Resources. The reader is cautioned that Inferred Resources are considered too speculative geologically to have economic considerations applied to them that would enable categorization as Mineral Reserves. There is no certainty that Inferred Resources will ever be upgraded to Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Going forward, the team will be working on laying out the next 5000 metre drilling program that will commence this summer, which will also include some geotechnical drilling to support the pit designs and other work on site and continue to work towards environmental milestones to progress the project to the next phase.

About Benton Resources Inc. (TSX VENTURE:BEX)

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