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.
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