Gold Standard Ventures Corp. (TSX: GSV) (NYSE AMERICAN: GSV) today announced positive results from the completion of the South Railroad Pre-Feasibility Study on its 100%-owned/controlled Railroad-Pinion project in Nevada’s Carlin Trend. The South Railroad project subset of the Railroad-Pinion Project, consisting of the Dark Star deposit and Pinion deposit, hosts one of the largest, undeveloped oxide gold reserves on the Carlin Trend. All references to the term “ore” contained in this press release refers to mineral reserves not mineral resources.
Key Highlights of the Base Case South Railroad PFS include (all currencies are shown in US dollars):
Jonathan Awde, CEO and Director of Gold Standard commented: “We are very pleased with this first iteration of this PFS which is needed now so that we can start the permitting process. We have many opportunities to improve on the base case which includes the goal to add mine life by potentially upgrading more of the existing resources within the PFS area and exploiting the other nearby deposits we have discovered. We also have some great opportunities to improve economics via trade-off studies which could reduce capital costs or improve recoveries. We will be looking to quantify these opportunities through further economic studies in the first half of 2020. Meanwhile, drilling is proceeding on some of our project’s best exploration targets.”
Completion of the positive PFS allows for the finalization of permit applications to the Bureau of Land Management (lead permitting agency on the South Railroad Project) for an environmental impact statement (EIS). Continued drilling is planned for the potential conversion of inferred resources to measured and indicated for addition to the mine plan at Dark Star, Pinion and the Jasperoid Wash deposit (“Jasperoid Wash”). Trade-off studies will be initiated to optimize economics.
1 See “Non-GAAP Financial Measures” at the end of this press release for a discussion of these measures.
South Railroad Project Opportunities
Additional South Railroad Project opportunities / considerations include:
Additional studies required to further de-risk the South Railroad Project include:
Resource Expansion and Exploration Opportunities
The 208 square kilometer Railroad-Pinion land package offers a district-scale opportunity for potential resource expansion, testing a pipeline of exploration opportunities, and providing sufficient room for additional infrastructure growth. These opportunities include (see August 6, 2019 news release):
The technical report for the PFS prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects includes oxide reserves at Dark Star and Pinion, minor sulfide reserves at Dark Star. The technical report also includes resource estimates for Dark Star, Pinion Jasperoid Wash and North Bullion. The South Railroad Project subset consisting of Dark Star and Pinion, hosts one of the largest, undeveloped oxide gold reserves on the Carlin Trend.
The PFS considers near surface open pit mining of 47.3 million tonnes of oxide and transitional ore at a processing rate of 5.9 million tonnes per year, over an initial 8-year open pit mine life. Ore from the pit will be processed either run of mine or through a high-pressure grind roll crusher and stacked on a heap leach pad and leached using a sodium cyanide solution. Pregnant solution will be processed through a dual train carbon-in-column plant, with gold and silver captured in an ADR plant.
Gold Standard is pleased to provide the results of the positive PFS along with the first mineral reserve estimate on its 100% owned/controlled Railroad Pinion Project in Nevada’s Carlin Trend. The PFS supports a technically straightforward open pit mine and heap leach operation, with rapid payback and strong financial return. The financial study was conducted using $1,400/oz gold and $17.11/oz silver. Reserves that provide the basis for the financial study were conducted at $1,250/oz gold and $15.30/oz silver.
Initial capital expenditures for the South Railroad Project are estimated at $194.0 million. Total capital for the life of the South Railroad Project, including initial, expansion, and sustaining are estimated at $302.7 million.
Operating costs are generally low and in line with local Nevada operations. Current life of mine projections are $1.93/tonne for mining of both waste and ore, $1.83/tonne for run of mine processing, and $4.87/tonne for HPGR processing. Operating costs for processing was determined by Kappes, Cassiday and Associates, while mining costs were determined by Mine Development Associates (“MDA”), both of Reno, Nevada. The average life of mine operating costs for the South Railroad Project is $11.49 per ore tonne.
|Total Reserve Ore Tons||47.344 M Tonnes|
|Average Grade||0.82 g Au/t Au; 4.70 g Ag/t Ag (Pinion)|
|Contained Gold / Silver Ounces||1.248 M oz Au; 2.705 M oz Ag|
|Average Recovery||69% ROM Au; 77% HPGR Au; 22% ROM Ag; 43% HPGR Ag|
|Average Annual Metal Placement||156,000 Ounces Au (Year 1-8); 541,000 Ounces Ag (Year 4-8)|
|Average Annual Metal Production||116,000 Ounces Au (Year 1-8), 205,000 Ounces Ag (Year 4-8)|
|Annual Tonnes Moved||24.3 Million Tonnes|
|Annual Reserve Ore Tonnes||5.9 Million Tonnes|
|Initial Capital Expenditures||$194.0M|
|Expansion Capital Expenditures||$88.3M|
|LOM Sustaining Capital Expenditures||$20.4M|
|Average Life of Mine Mining Costs||$1.93/Tonne|
|Average Life of Mine Processing Costs||$1.83/Tonne ROM
|G & A||$0.71 /ore Tonne|
|Life of Mine Pre-Tax Cash Flow||$409.7M|
|Life of Mine Pre-Tax Net Present Value (5%)||$302.1M|
|Life of MinePre-Tax IRR (Internal Rate of Return)||32.4%|
|Life of Mine Net Cash Flow After Tax||$337.1M|
|Life of Mine After Tax Net Present Value (5%)||$241.5M|
|Life of Mine After-Tax IRR||27.8%|
|Cash Costs After By-Product Credit1||$582/oz|
|Life of Mine||Initial 8 Years + prestrip (8 months)|
|Annual Total Mine Throughput||24.3 Million Tonnes/year|
|Annual Ore Throughput||5.9 Million Tonnes/year|
|Total Ore Tonnes||47.344 Million Tonnes|
|Run of Mine Ore Tonnes||18.435 Million Tonnes|
|HPGR Crusher Ore Tonnes||28.536 Million Tonnes|
|Sulfide Toll Mill||0.373 Million Tonnes|
|Average Grade||0.82 g Au/t
4.70 g Ag/t (Pinion only)
|Contained Ounces||1,248,000 oz Au
2,705,000 oz Ag (Pinion only)
|Payable Metals||931,000 oz Au
1,040,000 oz Ag (Pinion only)
Don Harris, Gold Standard’s General Manager commented, “The completion of the PFS is a big milestone for both the project and GSV. The positive financial results speak to an economic oxide heap leach mining project located in mining centric Nevada. The Company is looking forward to submitting permit applications on this project to various agencies shortly. Moving the project from PFS through permitting and towards production remains one of the top goals for GSV. In addition, ongoing exploration, engineering and optimization studies, and pipeline development will continue to work toward improving the PFS economics and expanding mine life.”
Sensitivity to Gold Price
The PFS base case was run on $1,400/oz Au and $17.11/oz Ag and evaluated on $50 increments above and below the base case to identify potential upside/downside effects on the South Railroad Project (refer to financial sensitivity table below) based on metal price. For every $50 increase or decrease in the price of gold and corresponding silver price (using 81.83 ratio), the after tax NPV changes by approximately +10 percent.
|Base +150||Base +100||Base +50||Base||Base -50||Base -100||Base -150|
|Pre Tax Cash Flow ($M)||$||549.499||$||502.887||$||456.276||$||409.665||$||363.054||$||316.442||$||269.831|
|Pre Tax Cash Flow Net Present Value (5%) ($M)||$||417.643||$||379.122||$||340.602||$||302.081||$||263.560||$||225.040||$||186.519|
|After Tax Cash Flow ($M)||$||448.117||$||411.150||$||374.181||$||337.113||$||299.765||$||261.495||$||222.851|
|After Tax Cash Flow Net Present Value (5%) ($M)||$||333.234||$||302.671||$||272.105||$||241.474||$||210.609||$||178.974||$||147.045|
|After Tax IRR (%)||34.7%||32.5%||30.1%||27.8%||25.3%||22.7%||19.9%|
|After Tax Payback (Years)||2.5||2.6||2.6||2.7||2.7||2.8||2.9|
Mineral Reserves and Resources
Dark Star is comprised of Carlin-style, sediment-hosted gold mineralization, while Pinion comprises Carlin-style, sediment-hosted gold and silver mineralization. Mineralization is almost completely oxidized to depths of approximately 330 meters. Dark Star contains small zones of unoxidized and transitional material above this level. The mineral reserve is divided into oxide/transitional heap leach and sulfide toll milling material.
The mineral reserve estimate for Dark Star and Pinion (South Railroad Project) is based on an open pit mine plan and production schedule developed by MDA. All mineral reserves are located on Gold Standard controlled land and support an initial 8-year mine life. The table below presents the mineral reserve estimation for the South Railroad Project. Proven and Probable reserves amount to 47.3 million tonnes at a 0.82 g Au/t and 4.70 g Ag/t (Pinion only) average grade for 1.248 million contained gold ounces and 2.705 million contained silver ounces (Pinion). The mineral reserve is based on a gold price of $1,250 per ounce and a silver price of $15.30 per ounce. The mineral reserves have an effective date of September 10, 2019.
|Dark Star||K Tonnes||g Au/t||K Ozs Au|
|P & P||29,456||0.93||884|
|Pinion||K Tonnes||g Au/t||K Ozs Au||g Ag/t||K Ozs Ag|
|P & P||17,887||0.63||364||4.69||2,705|
Consolidated Gold Reserves
|Total||K Tonnes||g Au/t||K Ozs Au|
|P & P||47,344||0.82||1,248|
As part of the PFS gold and silver resource estimates for Dark Star, Pinion, North Bullion, and Jasperoid Wash were prepared in accordance with NI 43-101. The estimates were completed by MDA of Reno, Nevada (Dark Star, Pinion, and Jasperoid Wash) and Apex Engineering of Edmonton, Canada (North Bullion). The mineral resource estimate is based on a gold price of $1,500 per ounce for Dark Star, Pinion and Jasperoid Wash. The mineral resource estimate for North Bullion has not changed since the mineral resource estimate disclosed on February 19, 2018 because there has been no new drilling and is based on a gold price of $1,350 per ounce. The reported resources are dated September 10, 2019. Resources are inclusive of reserves reported in this document.
$1,500 Resource Table
|Tonnes||g Au/t||Contained Oz Au||g Ag/t||Contained
|Measured and Indicated||Variable||32,717,000||0.88||921,000|
|Measured and Indicated||0.14||28,925,000||0.58||544,000||4.22||3,929,000|
|North. Bullion||Indicated Oxide||0.14||2,920,000||0.96||90,100|
|Inferred Near Surface Sulfide||1.25||2,050,000||2.60||171,400|
|Inferred Underground Sulfide||2.25||5,550,000||3.29||587,700|
|South Railroad Project Total||Measured and Indicated||64,562,000||0.78||1,555,100||4.22||3,929,000|
The PFS Technical Report will be prepared by M3 Engineering & Technology Corporation and filed on SEDAR within 45 days following the date of this news release. Dr. Art Ibrado, PE, Project Manager, and Matthew Sletten, PE, with M3 are the qualified persons responsible for the scientific and technical information in this news release as defined by NI43-101. Thomas L. Dyer, PE, and Principal Engineer with MDA, is the qualified person for the reserve estimate and mine planning in this news release, as defined by NI 43-101. Steve Ristorcelli, CPG #10257, Principal Geologist with MDA is the qualified person responsible for the Pinion and Jasperoid Wash resource estimates in this news release, as defined by NI 43-101. Michael Lindholm, CPG #11477, Senior Geologist with MDA is the qualified person responsible for the Dark Star resource estimates in this news release, as defined by NI 43-101. Carl Defilippi, Registered Member SME (#775870) and Project Manager with Kappes, Cassiday and Associates is the qualified person responsible for process capital and process operating expenditures. Gary Simmons, BSc Metallurgical Engineering (MMSA-01013QP) is the qualified person responsible for metallurgy recovery projections. Michael Dufresne, P. Geol. (Alberta License #48439) and P. Geo. (British Columbia License #370074), Principal Geologist and President with APEX Geoscience Ltd.; and Steven Nicholls, MAIG (#3555), Principal Geologist and Managing Director with APEX Geoscience Ltd. (Australia), are the qualified persons responsible for the North Bullion resource estimate in this news release. Dr. Ibrado, Mr. Sletten, Mr. Dyer, Mr. Ristorcelli, Mr. Defilippi, Mr. Simmons, Mr. Dufresne and Mr. Nicholls are independent of Gold Standard.
Don Harris, Registered Member SME (#04146776) and General Manager for Gold Standard; Steven Koehler, AIPG (CPG-10216) and Manager of Projects for Gold Standard; and Mark Laffoon, PE and Project Director are the qualified persons, as defined by NI 43-101, Standards of Disclosure for Mineral Projects, who supervised the preparation of certain technical information in this release.
The PFS Technical Report will include contributions from the following independent mining industry consultants including:
|M3||PFS lead; general site arrangement and infrastructure design; financial modeling; overall report preparation|
|MDA||Mineral resource and reserve estimation; mine plan schedule, mining operating and capital costs|
|Stantec Consulting Services Inc., In-Situ Inc.||Material characterization; hydrology and groundwater model|
|Kappes, Cassiday & Associates; GL Simmons LLC||Column, bottle roll and HPGR test work; metallurgical interpretation, process operation and capital costs|
|The Mines Group Incorporated||Leach pad and pond design and layout|
|EM Strategies||Lead for permitting activities|
|Golder Associates Inc.||Pit slope stability investigations and design|
|Barr Engineering||Blast fragmentation studies|
|NV Energy||Electrical power supply analysis and costing|
Non-GAAP Financial Measures
The Company has included certain non-GAAP financial measures in this press release, including cash costs and all-in sustaining costs (AISC) per ounce of gold sold. These non-GAAP financial measures do not have any standardised meaning. Accordingly, these financial measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards.
Cash costs are reflective of the cost of production. The Company reports cash costs on an ounces of gold sold basis. Other companies may calculate these measures differently and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Cash costs reported by Gold Standard includes mining, processing, transport, refining, general administration costs of the mine operations and royalties, but are exclusive of amortization, reclamation, capital and exploration costs and net of any value of the by-products.
All-in Sustaining Costs
This news release refers to expected AISC per ounce which is a non-GAAP measure however is a measure the Company believes more fully-defines the total costs associated with producing gold. This measurement has no standardized meaning under IFRS, accordingly there may be some variation in method of computation of “all-in sustaining costs” as determined by the Company compared with other mining companies. AISC reported by Gold Standard includes mine cash costs, land access payments, royalties, and sustaining capital expenditures, but excludes non-sustaining capitalized stripping and end of life reclamation costs. The life of mine AISC of $657/oz increases to $686/oz if end of mine life reclamation costs are included in accordance with the World Gold Council guidance on AISC.
The “qualified persons”, as such term is defined in NI 43-101, responsible for the preparation of the PFS have verified the data disclosed in this news release, including sampling, analytical, and test data underlying the information contained in this news release. Geological, mine engineering and metallurgical reviews included, among other things, reviewing mapping, core logs, and re-logging existing drill holes, review of geotechnical and hydrological studies, environmental and community factors, the development of the life of mine plan, capital and operating costs, transportation, taxation and royalties, and review of existing metallurgical test work. In the opinion of the qualified persons responsible for the preparation of the PFS, the data, assumptions, and parameters used to estimate mineral resources and mineral reserves, the metallurgical model, the economic analysis, and the preliminary feasibility study are sufficiently reliable for those purposes. The PFS, when filed, will contain more detailed information concerning individual responsibilities, associated quality assurance and quality control, and other data verification matters, and the key assumptions, parameters and methods used by the Company.
ABOUT GOLD STANDARD VENTURES
Gold Standard is an advanced-stage gold exploration company focused on district scale discoveries on its Railroad-Pinion Project, located within the prolific Carlin Trend. Gold Standard’s successful exploration of Pinion and Dark Star has created potential near-term development option and further consolidates the Company’s premier land package on the Carlin Trend.
Pinion has a resource estimate prepared in accordance with NI 43-101 consisting of an Measured and Indicated Mineral Resource of 28.93 million tonnes grading 0.58 g/t Au and 4.22 g/t Ag, totaling 544,000 ounces of gold and 3,929,000 ounces of silver, and an Inferred Resource of 10.81 million tonnes grading 0.64 g/t Au and 3.80 g/t Ag, totaling 224,000 ounces of gold and 1,322,000 ounces of silver, using a cut-off grade of 0.14 g/t Au and constrained by a $1,500/Au ounce LG Cone.
The Dark Star deposit has a resource estimate prepared in accordance with NI 43-101 consisting of an Measured and Indicated Mineral Resource of 32.72 million tonnes grading 0.88 g/t Au, totaling 921,000 ounces of gold and an Inferred Resource of 2.48 million tonnes grading 0.70 g/t Au, totaling 56,000 ounces of gold, using a cut-off grade of 0.14 g Au/t and constrained by a $1,500/Au ounces LG Cone.
North Bullion has a resource estimate prepared in accordance with NI 43-101 consisting of an Indicated Mineral Resource of 2.92 million tonnes grading 0.96 g/t Au, totaling 90,100 ounces of gold and an Inferred Resource of 10.97 million tonnes grading 2.28 g/t Au, totaling 805,800 ounces of gold, using a cut-off grade of 0.14 g Au/t for near surface oxide and 1.25 to 2.25 g Au/t for near surface sulfide and underground sulfide respectively.
Jasperoid Wash has a resource estimate prepared in accordance with NI 43-101 consisting of an Inferred Resource of 10.57 million tonnes grading 0.33 g/t Au, totaling 111,000 ounces of gold, using a cut-off grade of 0.14 g Au/t and constrained by a $1,500/Au ounces LG Cone.
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