Rokmaster Resources Corp. (TSX-V: RKR) (Frankfurt: 1RR1) (OTC Pink: RKMSF) is pleased to announce positive results from the Preliminary Economic Assessment study prepared in accordance with National Instrument 43-101 by Micon International Limited, supported by Canenco Consulting Corp., Base Metallurgical Laboratories Ltd., Canadian Northern Mining Corp., and Knight Piésold Consulting, for the Revel Ridge polymetallic gold-silver Project located in the Revelstoke area of southeastern British Columbia.
The PEA demonstrates the Revel Ridge Project’s potential to become a long life, low cost, robust polymetallic gold-silver mine with strong project economics with a base case gold price of US$1,561/ounce gold. In addition to the PEA, Revel Ridge has significant upside potential to expand current resources through ongoing exploration diamond drilling down dip, up dip, along strike and on other occurrences, with more than 430 samples currently awaiting assay.
Revel Ridge 2020 PEA Highlights (reported in C$, except where noted) include:
|1.||Exchange Rate (US$/C$) of 0.77|
|2.||Cash costs are inclusive of mining costs, processing costs, and site G&A|
|3.||AISC includes cash costs plus estimated sustaining capital and closure costs|
|4.||Payable Gold Equivalent (AuEq) calculated by dividing net sales revenue by $1,556 (i.e., $1,561/oz Au less $5/oz Au refining costs).|
Rokmaster’s Chairman, Michael Cowin stated, “Revel Ridge is a remarkable property that has been worked on since 1912 to unlock its riches. After significant metallurgical, marketing and processing studies, this PEA demonstrates that Revel Ridge has a solid future ahead as a high-grade underground polymetallic gold-silver mine, utilizing conventional mining & processing equipment to produce a combination of saleable concentrates and gold-silver doré. The Project has the potential to produce an average of 124,000 gold-equivalent ounces per year with a diluted mill feed grade of 5.53 grams per tonne gold-equivalent. By selling zinc and lead-silver concentrates to reliable Canadian and offshore smelters and utilizing low risk onsite processing facilities, we are able to keep initial capital costs low and cut marketing risk both short and long term.”
John Mirko, President and CEO of Rokmaster commented “This is a very strong start to a project with significant exploration upside. As a historical exploration site, Revel Ridge benefits from tremendous infrastructure in the nearby area and on-site installed by the previous developers, in addition to its location in a favourable, mine-friendly jurisdiction. Rokmaster’s team has substantial experience with permitting, constructing and operating mines in the Kootenay region and has demonstrable history of supporting community through mine development with low environmental impact.”
The 2020 Revel Ridge PEA considers an underground mine with on-site treatment of the mined material by conventional milling, gravity and flotation to produce concentrates for sale to third-party smelters, in combination with on-site treatment of refractory gold concentrates to produce gold-silver doré. The mine will comprise an owner-operated, ramp developed, long hole stope underground mine.
The processing capacity of 2,300 tonnes per day will result in a production lifespan of 12 years. An additional 18 months of mine ramp access and development, and construction of the process plant and dry-stack tailings facility is planned prior to the Project becoming fully operational in Year 1. The PEA leverages Revel Ridge’s extensive existing infrastructure, including all-weather access roads, local hydroelectric facilities, 3 km of underground development, permitted waste rock storage facility, full camp facility and proximity to the City of Revelstoke with its skilled labour pool.
The PEA is derived from the Company’s NI 43-101 resource estimate (January 29, 2020), and does not include results from the recently initiated and ongoing 2020 exploration diamond drilling program. The effective date of the PEA is December 8, 2020 and a technical report will be filed on the Company’s website and on SEDAR within 45 days of this disclosure.
Mineral resources that are not mineral reserves do not have demonstrated economic viability. This PEA is preliminary innature and includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the results of this PEA will be realized.
Table 1: Revel Ridge 2020 PEA Detailed Parameters and Outputs
|Gold Price (US$/oz)||$1,561|
|Silver Price (US$/oz)||$20.55|
|Zinc Price (US$/lb)||$1.07|
|Lead Price (US$/lb)||$0.91|
|Exchange Rate (US$/C$)||0.77|
|Contained Metals in Mill Feed|
|Contained Gold Ounces (koz)||1,280|
|Contained Silver Ounces (koz)||15,934|
|Contained AuEq Ounces (koz)||1,785|
|Mine Life (Years)||12|
|Main Zone LOM production (MT, diluted)||9.39|
|Average Diluted Gold Grade (g/T)||4.24|
|Average Diluted Silver Grade (g/T)||49.8|
|Average Diluted Zinc Grade %||2.62|
|Average Diluted Lead Grade %||1.63|
|Yellow Jacket Zone LOM production (Mt, diluted)||0.65|
|Average Diluted Gold Grade (g/T)||0.06|
|Average Diluted Silver Grade (g/T)||43.00|
|Average Diluted Zinc Grade %||7.47|
|Average Diluted Lead Grade %||1.90|
|Processing Throughput (TPD)||2,300|
|Total Mill-feed Tonnage (MT)||10,04|
|Average revenue per tonne treated (C$/T)||300.25|
|Average Diluted Gold Equivalent Grade (g/T AuEq)||5.53|
|LOM Gold Production (koz)||1,068|
|LOM Silver Production (koz)||8,282|
|LOM Zinc Production (Mlbs)||450|
|LOM Lead Production (Mlbs)||255|
|LOM Gold Equivalent Production (koz AuEq)||1,490|
|LOM Average Annual Gold Production (koz)||89|
|LOM Average Annual Silver Production (koz)||690|
|LOM Average Annual Gold Equivalent Production (koz)||124|
|Mining Cost (C$/T Milled)||$62.42|
|Processing Cost (C$/T Milled)||$65.07|
|G&A Cost (C$/T Milled)||$7.59|
|Total Operating Cost (C$/T Milled)||$135.08|
|Cash Costs and AISC|
|LOM Cash Cost (US$/oz Au) Net of Silver-Zinc-Lead By-Products||$362|
|LOM Cash Cost (US$/oz AuEq) Co-Product||$700|
|LOM AISC (US$/oz Au) Net of Silver-Zinc-Lead By-Products||$560|
|LOM AISC (US$/oz AuEq) Co-Product||$842|
|Pre-Production Capital Expenditures (C$M)||$396|
|Sustaining Capital Expenditures (C$M)||$274|
|Reclamation Cost (C$M)||$6.5|
|After-Tax NPV (5.0%) (C$M)||$423|
|After-Tax NPV (7.5%) (C$M)||$345|
|After-Tax NPV (10.0%) (C$M)||$279|
|After-Tax Payback Period, base case discounted at 7.5% (Years)||2.7|
|After-Tax NPV7.5:CAPEX Ratio||0.9:1|
|Pre-Tax NPV (5.0%) (C$M)||$689|
|Pre-Tax NPV (7.5%) (C$M)||$578|
|Pre-Tax NPV (10.0%) (C$M)||$484|
|Pre-Tax IRR (%)||39.6|
|Pre-Tax NPV7.5:CAPEX Ratio||1.5:1|
|Average Annual After-Tax Free Cash Flow (Year 1-5) (C$M)||$160|
|LOM After-Tax Free Cash Flow (C$M)||$630|
|1.||Cash costs are inclusive of mining costs, processing costs, and site G&A|
|2.||AISC includes cash costs plus corporate G&A, sustaining capital and closure costs|
|3.||Payable Gold Equivalent (AuEq) calculated by dividing net sales revenue by $1,556 (i.e., $1,561/oz Au less $5/oz Au refining costs).|
Base case NPV7.5% remains positive for changes of 25% in revenue drivers (commodity prices, grade, and recovery), capital expenditure or operating costs. After-tax economic sensitivities to commodity prices are presented in Table 2 illustrating the effects of varying gold price as compared to the base-case. Additional Project sensitivities will be presented in the Technical Report.
Table 2: After-Tax NPV and IRR Sensitivities to Commodity Prices
|Gold Price (US$/oz)||$1,400||$1,561||$1,700|
|After-Tax NPV (5.0%) (C$M)||307||423||523|
|After-Tax NPV (7.5%) (C$M)||242||345||433|
|After-Tax NPV (10.0%) (C$M)||187||279||358|
|After-Tax IRR (%)||23.6||29.5||34.4|
|After-Tax Payback discounted at 7.5% (Years)||3.2||2.7||2.4|
|Average Annual After-Tax Free Cash Flow (Years 1-5) (C$M)||140||160||177|
Revel Ridge Mineral Resource Estimate
The Company’s current Mineral Resource Estimate; please refer to the technical report entitled “Updated Technical Report on the Revel Ridge Property (formerly J&L Property), Revelstoke Mining Division, British Columbia, Canada” dated February 25, 2020 with an effective date of January 29, 2020) completed by P&E Mining Consultants forms the basis for this PEA. The MRE does not include drilling results from the Company’s recently initiated and ongoing 2020 exploration diamond drill program.
Table 3: Mineral Resources reported at CAD 110/t NSR cut-off (effective date: January 29, 2020):
|Meas & Ind||4,200||5.59||755||53.4||7,216||1.87||3.43||8.07||1,089|
|1)||Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.|
|2)||The Inferred Mineral Resource in this estimate has a lower level of confidence than that applied to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be upgraded to an Indicated Mineral Resource with continued exploration.|
|3)||The Mineral Resources in this estimate were calculated using the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), CIM Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council.|
|4)||The following parameters were used to derive the NSR block model cut-off values used to define the Mineral Resource:|
|Dec 31, 2019 US$ two-year trailing avg. metal prices:|
|– Pb $0.96/lb, Zn $1.24/lb, Au $1,331/oz, Ag $15.95/oz|
|– Exchange rate of US$0.76 = CDN $1.00|
|– Process recoveries of Pb 74%, Zn 75%, Au 91%, Ag 80%|
|– Smelter payables of Pb 95%, Zn 85%, Au 96%, Ag 91%|
|– Refining charges of Au US$10/oz, Ag US$0.50/oz|
|– Concentrate freight charges of C$65/t and Smelter treatment charge of US185/t|
|– Mass pull of 5% and 8% concentrate moisture content.|
|5)||NSR cut-off of CDN$110 per tonne was derived from $75/t mining, $25/t processing, $10/t G&A.|
|6)||AuEq= Au g/t + (Ag g/t x 0.011) + (Pb % x 0.422) + (Zn % x 0.455)|
|7)||Above parameters derived from 2012 PEA and other similar benchmarked projects.|
An underground mining scenario is the basis for this PEA. The owner-operated and leased mining fleet will utilize conventional trackless haulage and long-hole stoping with backfill using process tailings (paste) and waste rock.
The mine designs and scheduling were engineered to provide 840 kt per year of mineralization to the 2,300 TPD process plant. A total of 10.04 Mt of diluted mill feed comprising of Main Zone mineralisation with 9.39 MT averaging 4.24 g/t Au, 49.8 g/t Ag, 2.62 % Zn, 1.63 % Pb (diluted) and Yellow Jacket Zone mineralisation of 0.65 MT averaging 7.47% Zn, 1.90% Pb, 43.0 g/t Ag and 0.06 g/t Au (diluted) is expected to be processed over the LOM. Mill feed will be trucked from underground to the process facility located proximal to the main portal. Waste rock that cannot be accommodated within the mine as backfill will be stored together with dry-stack tailings in a facility constructed adjacent to the process plant. Underground mining dilution has been accounted for in the minimum 2.5 m width of stope shapes, with an additional allowance for overbreak. Total dilution in the Main zone is estimated at 32.1% and in the Yellow Jacket Zone at 38.7%.
To support this PEA, recent metallurgical test work was supervised by Canenco Consulting Corp. and flowsheet developmental test work was undertaken at Base Metallurgical Laboratories Ltd. using samples from the Main Zone, which represent a significant proportion of the mine plan. The 2020 metallurgical program has focused on optimizing sulphide flotation, resulting in similar recoveries but lower mass pulls than was indicated by earlier studies. Overall recoveries to payable product in the PEA are 83.5%, 52.0%, 70.0% and 69.2% for gold, silver, lead and zinc respectively.
Run-of-mine material is crushed and screened before dense media separation (DMS) to remove gangue. The beneficiated material reports to the milling, gravity and flotation circuits where lead and zinc sulphide concentrates are separated and dewatered for sale while the refractory sulphides are collected and treated by pressure oxidation (POX) to facilitate extraction of gold and silver by conventional CIL, electrowinning and smelting to doré bars.
Concentrate Marketing Studies
Multiple marketing assessments have been completed to support this PEA which confirm that Revel Ridge zinc and lead-silver-gold concentrates are readily saleable. At the same time, it became apparent that the economic returns from treating refractory material on site are significantly better, and reduces marketing risk, than those of entering into offtake agreements utilizing Asian smelters and third party POX plants.
Table 4: Project Capital Cost Estimates (C$M) (totals may differ due to rounding):
|Mining Equipment leases||$4.62||$89.38||$94.00|
|Crushing, grinding, DMS||$13.19||–||$13.19|
|Dewatering, tailings, paste||$7.68||–||$7.68|
|Site prep, buildings||14.50||–||$14.50|
|TSF, Water Supply & Treatment||$16.14||$63.14||$79.28|
|Total excluding contingency||$333.57||$264.87||$598.44|
|Sub-total including contingency||$395.96||$273.82||$669.78|
Environmental and Permitting Considerations
Revel Ridge represents an existing exploration site with existing permits for mine discharge and waste disposal. The site has been maintained in good standing and environmental monitoring has been ongoing during operations and since the site was last active in 2012. There is a substantial database of environmental information for the site and region spanning almost 37 years. To accommodate the mine design contemplated by the PEA, updated environmental assessment and mine permits will be required. The Company is currently performing an analysis of existing environmental data to identify additional data needs with the intent of carrying out environmental baseline studies to advance the permitting process.
Rokmaster team members have maintained a long-standing historical relationship with several local communities and First Nations during past exploration, development and mining operations in the region since 1986.
Conclusion and Recommendations
The 2020 PEA clearly demonstrates that Revel Ridge has the potential to become a commercially viable project. Additional opportunities and next steps include:
All Qualified Persons have contributed to their corresponding sections in Interpretation and Recommendations of the Technical Report, and have reviewed and approved the scientific, technical and economic information contained in this news release.
The Company strictly adheres to CIM Best Practices Guidelines in conducting, documenting, and reporting the exploration and development activities on its projects.
Rokmaster’s focus is on exploring for base and precious metals, and its flagship asset is its option to earn 100% of the Revel Ridge polymetallic precious metals project situated in the prolific Kootenay Arc. Please refer to the technical report titled “Updated Technical Report on the Revel Ridge Property (formerly J&L Property), Revelstoke Mining Division, British Columbia, Canada” dated February 25, 2020 with an effective date of January 29, 2020, which the Company has filed on SEDAR.
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