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Columbus Gold Announces Positive PEA Results on Montagne d’Or Gold Deposit; Production of 273,000 Oz/yr and AISC of US$711/Oz

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Columbus Gold Announces Positive PEA Results on Montagne d’Or Gold Deposit; Production of 273,000 Oz/yr and AISC of US$711/Oz

 

 

 

 

 

Columbus Gold Corporation (TSX-V:CGT) (OTCQX:CBGDF) is pleased to announce the results of the NI 43-101 compliant, Preliminary Economic Assessment at the Montagne d’Or gold deposit, Paul Isnard Project, French Guiana, conducted by SRK Consulting (U.S.), Inc.
 

Montagne d’Or PEA Highlights

 

 
 
--  After-tax NPV (at 8%) of US$324 Million 
--  After-tax IRR of 23%, at a gold price of US$1200 per ounce ("Oz") 
--  Initial Capital Cost of US$366M, including US$44M contingency 
--  All-in Sustaining Costs ("AISC") of US$711/Oz 
--  Life of Mine ("LOM") Production of 3.05 million ounces 
--  Average Annual Gold Production 273,000 Oz in years 1-10 
--  Milling Capacity of 12,500 tonnes per day, with an average gold grade
    2.0 g/t in years 1-10
 

 

 

Robert Giustra, Chairman & CEO of Columbus Gold, commented: “The advancement of the Montagne d’Or Gold Deposit to the PEA stage achieves a significant milestone that clearly indicates the potential to develop a low CAPEX gold deposit with scale and good grade, at below industry average cash costs.” Mr. Robert Giustra further stated: “The Montagne d’Or PEA is planned to deliver a solid average grade of 2 g/t over a 10 year production period, and with additional drilling and continued refinement of operating costs, including various energy proposals in the upcoming feasibility study, a potential reduction in overall costs may be possible.”
 

Analysis
 

The Montagne d’Or deposit could potentially support an open pit mine with conventional carbon-in-leach processing technology, and with a moderate strip ratio of 5:1 waste/ore. While the PEA allows for inclusion of Inferred Mineral Resources, more than 94% of in-pit resources are in the Indicated Mineral Resource category. The processing plant, with an annual capacity of 4.5 Mtpa, will include three stage crushing, ball milling, gravity gold recovery circuit, 9 CIL tanks, and cyanide detoxification circuit. Gold recovery in the plant is anticipated to exceed 94%, and processing of lower-grade stockpiles is scheduled for years 12 to 13.
 

The PEA utilizes power supply from on-site generation at a cost of US$0.20/kWh as the base case, however a connection to the power grid located 125 km away at the port of Saint-Laurent-du-Maroni would reduce the cost to US$0.11/kWh. This option is currently at an advanced stage of study. Due to a low Ball Mill Work Index of only 12 kWh/t, the mine is anticipated as having competitive processing cost in either power supply scenario.

 

 
 
                                                                            
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                              Technical Summary                             
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Life of Mine                                                        13 years
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In-pit Resources                                             3.23 Million Oz
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Strip Ratio                                                              5:1
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LOM Average Annual Production                                     235,000 Oz
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LOM Average Grade                                                    1.8 g/t
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Total Payable Gold Produced                                  3.05 Million Oz
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Capital Costs                                                           US$M
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Pre-stripping                                                             27
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Mining                                                                    54
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Processing                                                               137
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Tailings                                                                  19
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Infrastructure                                                            71
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Owners Cost                                                               15
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Contingency                                                               44
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Total Initial Capital Cost                                               366
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Sustaining Capital Cost                                                  216
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Mine Closure Cost                                                         25
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LOM Total Capital Cost                                                   608
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Operating Costs (US$/tonne of ore processed)                       US$/tonne
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Mining Cost                                                             11.4
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Processing Cost                                                         14.6
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Tailings                                                                 0.5
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SG&A                                                                     5.4
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        After-tax Financial Results at $1,200/Oz Price of Gold (US$)        
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NPV at 8%                                                              $324M
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IRR                                                                      23%
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AISC                                                                 $711/Oz
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Payback Period From Start of Production                            3.5 years
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Free Cash Flow                                                         $756M
----------------------------------------------------------------------------
 

 

 

Outlook
 

Columbus Gold intends to start the Feasibility Study in Q3 2015 and targets completion in Q4 2016. The Preliminary Environmental and Social Impact Assessment and terms of references have been completed, and delivery of the Final ESIA is anticipated by Q4 2016.
 

The FS work is being funded by Nord Gold N.V. (LSE:NORD LI) as part of a minimum US$30 million exploration and development program pursuant to which they can earn a 50.01% interest in Montagne d’Or and the Paul Isnard mineral titles. Earn-in also includes completing a Feasibility Study no later than March, 2017. Spending in 2014 was $16 million, and is budgeted at US$10 million for 2015 which will include in-fill drilling to increase confidence in the resource and conversion of the Indicated resources to the Measured category, condemnation drilling of the proposed infrastructure sites, geotechnical and hydrogeological investigations, and advanced metallurgical test work to support processing plant design.

Posted July 9, 2015

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