Castle Mountain Mining's Preliminary Economic Assessment Delivers
Production Plans of 176,000 Ounces of Gold Annually Over 17+ Years
TORONTO, ONTARIO--(Marketwired - Apr 24, 2014) - Castle Mountain
Mining Company Limited ("Castle Mountain" or the "Company"
(TSX-VENTURE:CMM)): is pleased to announce receipt of a positive
Preliminary Economic Assessment ("PEA") for its 100% controlled
Castle Mountain Mine (the "Mine" or "Project") in San Bernardino
County, California. The study was completed by RPA Inc. with the
collaboration David Penswick, P. Eng., and the Castle Mountain
technical team. The PEA considered a base case and two sensitivity
cases summarized in Table 1 below:
Table 1 - Project Summary |
|
|
|
|
|
|
|
|
|
|
|
Static |
Base |
Unconstrained |
Recovered Au |
|
000 oz |
|
832 |
2,994 |
3,490 |
Annual Au |
|
000 oz |
|
119 |
176 |
291 |
All-In Sustaining Costs 2 |
|
US$/oz |
|
$919 |
$949 |
$801 |
Initial Capex |
|
US$ MM |
|
$98 |
$98 |
$421 |
Pre-Tax NPV 5% 1 |
|
US$ MM |
|
$173 |
$499 |
$831 |
Pre-Tax IRR 1 |
|
|
|
38.9% |
27.5% |
29.1% |
Post-Tax NPV 5% 1 |
|
US$ MM |
|
$122 |
$352 |
$576 |
Post-Tax IRR 1 |
|
|
|
29.7% |
20.1% |
21.7% |
|
|
|
|
|
|
|
Notes: |
1. |
Assumes flat long term Au price of $1300/oz |
2. |
All in Sustaining Costs is a non-GAAP measure presented as per WGC
guidelines |
- includes allowance of $2m pa for corporate G&A.
See Non-GAAP Measures. |
The economic analysis contained in the PEA is based, in part, on
Inferred Resources, and is preliminary in nature. Inferred
Resources are considered too geologically speculative to have
mining and economic considerations applied to them and to be
categorized as Mineral Reserves. There is no certainty that
economic forecasts on which the PEA is based will be realized.
Gordon McCreary, Castle Mountain's President & CEO stated
"We are extremely pleased to have completed this important
milestone on the path to re-opening of the Castle Mountain Mine.
The PEA has delivered all that we had anticipated: the scalability
of the Project, strong economics at various gold prices, with a
relatively low pre-production capex. With an average annual
production in excess of 176,000 ounces of gold, a pre-production
capex below $100 million, the key mining permit in hand and in a
stable jurisdiction, we believe that the Castle Mountain Mine is
amongst the best gold development projects in the world today. We
plan to continue to advance the Project through to Feasibility
Study stage before year end, which combined with the existing
mining permit show that this Project has a very short path to
production.
Castle Mountain has made significant progress since going public
less than one year ago. Producing first a NI 43-101 Mineral
Resource Report with over 3.1 million gold ounces of indicated and
1.1 million ounces inferred of heap leachable gold, and following
that the Company has continued to advance the Project now having
completed a NI 43-101 Preliminary Economic Assessment. This is a
testament to the quality of the Project and the growing management
team at Castle Mountain."
Summary of Study |
The PEA considered three cases: |
- Base Case: This scenario is based on a low capital start-up
with a subsequent capital investment and expansion to 8.1 Mtpa in
year three of operation. The Base Case remains within the
boundaries of the 3,910 acre Environmental Impact Statement (EIS),
but requires an amendment of the current mine and operations plan
during operations.
- Static Case: This scenario is limited to the current mine and
operations plan, which provides for a disturbance area of 1,375
acres. It is based on a low initial capital requirement for 6.4
Mtpa of leaching, no expansion capital, and no amendments to the
current mine permit.
- Unconstrained Case: This Scenario is unconstrained by either
capital or the current mine and operations plan. The Unconstrained
Case assumes an amendment of the mine permit to 18 Mtpa before the
commencement of production. This case remains within the boundaries
of the 3,910 acre EIS/EIR. This case includes increased capital
spending in order to minimize the operating cost structure.
Table 2 - Summary Metrics for PEA Cases |
|
|
|
|
|
|
|
|
|
|
|
Static |
Base |
Unconstrained |
Process Feed |
|
000 tonnes |
|
40,240 |
132,137 |
209,271 |
Waste |
|
000 tonnes |
|
173,530 |
912,135 |
835,001 |
Strip Ratio |
|
waste : ore |
|
4.31 |
6.90 |
3.99 |
Grade |
|
g/t |
|
0.84 |
0.85 |
0.62 |
Contained Au |
|
000 oz |
|
1,082 |
3,599 |
4,166 |
Recovered Au |
|
000 oz |
|
832 |
2,994 |
3,490 |
Recovery 1 |
|
|
|
76.9% |
83.2% |
83.8% |
Mine Life 2 |
|
years |
|
7 |
17 |
12 |
Annual Au |
|
000 oz |
|
119 |
176 |
291 |
All-In Sustaining Costs 3 |
|
$/oz |
|
$919 |
$949 |
$801 |
Initial Capex |
|
$
MM |
|
$98 |
$98 |
$421 |
Expansion Capex |
|
$
MM |
|
$0 |
$173 |
$0 |
Sustaining Capex |
|
$
MM |
|
$90 |
$250 |
$339 |
Closure4 |
|
$
MM |
|
$6 |
$22 |
$30 |
Total Investment |
|
$ MM |
|
$194 |
$543 |
$790 |
Pre-Tax NPV 0% 5 |
|
$
MM |
|
$239 |
$953 |
$1,366 |
Pre-Tax NPV 5% 5 |
|
$
MM |
|
$173 |
$499 |
$831 |
Pre-Tax IRR 5 |
|
|
|
38.9% |
27.5% |
29.1% |
Post-Tax NPV 0% 5 |
|
$
MM |
|
$177 |
$728 |
$1,012 |
Post-Tax NPV 5% 5 |
|
$
MM |
|
$122 |
$352 |
$576 |
Post-Tax IRR 5 |
|
|
|
29.7% |
20.1% |
21.7% |
Simple Payback - Initial Capital 5 |
|
months |
|
31 |
31 |
59 |
Simple Payback - Expansion Capital 5 |
|
months |
|
n/a |
46 |
n/a |
1. |
Includes recovery of 76.9% for crushed leach material and 95% for
milled material |
2. |
Excludes 3 years of rinsing pads following completion of mining
activities |
3. |
All in Sustaining Costs is a non-GAAP measure presented as per WGC
guidelines - includes allowance of $2m pa for corporate G&A.
See Non-GAAP Measures |
4. |
Net of salvage values of $2.7m (Static), $4.8m (Base) and $6.9m
(Unconstrained) |
5. |
Assumes flat long term Au price of $1300/oz |
The information presented above is based on preliminary mine
designs and processing criteria drawn from previous operating
performance. Mineral Resources are based on NI 43-101 Mineral
Resource estimate filed by the Company on SEDAR on December 11,
2013. Financial returns have been forecasted using an assumed long
term gold price of $1300/oz. All currency amounts in this press
release are denominated in US dollars ($) unless otherwise
noted.
Opportunities to Improve Results |
Opportunities to improve upon the results presented above that
will be investigated as the project is advanced include: |
- A significant tonnage of material currently classified as waste
within the pit shells has, in fact, not yet been drilled. The
presence of mineralization in these areas has the potential to
increase the tonnage of mineralization included in the mine plan
and/or materially reduce the strip ratio.
- The historic cut-off of approximately 0.5 g/t is well above the
current cut-off of 0.24 g/t for the Base Case (and 0.13 g/t for the
Unconstrained Case). Material below the historic cut-off was used
to backfill the JSLA Pit and will be excavated early in the mine
plan. There is potential to process and economically recover gold
from this material, which is currently classified as waste.
- It may be possible to recover additional gold from the existing
leach pad. There are plans to test this, with a focus on the cells
that were developed initially, where higher grade material was not
milled or treated with the gravity circuit. In addition, it may be
possible to use the leached material as construction aggregate -
particularly for lining the new leach pads - and thus reduce
capital expenditures.
- It may be possible to steepen wall slopes beyond the 48°
overall slope angles that have been assumed, which would reduce the
stripping ratio. The previously mined pits achieved inter-ramp
slope angles well in excess of 50° throughout the majority of pits
and most walls remain in excellent condition, more than 13 years
later. Geotechnical studies have been planned for the next round of
work.
Mineral Resources |
The PEA is based on the NI 43-101 compliant Mineral Resources
that was published in the technical report filed on SEDAR on
December 11, 2013 and is summarized in Table 3. |
|
Table 3 - Mineral Resources Estimate - Effective
November 21, 2013 |
|
|
|
|
Cut-Off |
Tonnage |
Grade |
Gold |
(g/t Au) |
(Mt) |
(g/t Au) |
(oz Au) |
Indicated |
0.34 |
84.5 |
0.94 |
2,560,000 |
0.26 |
112.5 |
0.78 |
2,820,000 |
0.17 |
148.8 |
0.64 |
3,074,000 |
0.14 |
165.1 |
0.6 |
3,150,000 |
Inferred |
0.34 |
27.5 |
0.94 |
828,000 |
0.26 |
38.6 |
0.75 |
934,000 |
0.17 |
52.3 |
0.61 |
1,030,000 |
0.14 |
57.8 |
0.57 |
1,060,000 |
Notes: |
1 |
CIM
definitions were followed for Mineral Resources. |
2 |
Totals may not add exactly due to rounding. |
3 |
Mineral Resources are estimated at a cut-off grade of 0.14 g/t
Au. |
4 |
Mineral Resources are contained within a Whittle pit shell,
generated using a gold price of US$1300/oz Au. |
5 |
Sample grades were capped at 34.29 g/t Au prior to compositing and
grade interpolation. |
6 |
The
mineral resource estimate may be materially affected by
environmental, permitting, legal, title, taxation, sociopolitical,
marketing, and other relevant issues. Refer to the Technical Report
for the key assumptions, parameters and risks associated with the
mineral resource estimate. |
Project Location and Description
The Project is located in the historic Hart Mining District, at
the southern end of the Castle Mountains, San Bernardino County,
California, approximately 112 km south of Las Vegas, Nevada. The
property comprises 1,298 acres of patented lode claims, 6,160 acres
of unpatented lode and millsite claims for an aggregate total of
7,458 acres. 3,910 acres are covered by the EIS/EIR and 1,375 of
these are permitted for disturbance. The property is located in the
high desert area near the Mojave National Preserve and is road
accessible and workable year round. The most recent mining activity
ended in 2001 with residual leaching ending in 2004. The mine has a
valid Mine and Reclamation plan that was recently extended to
December 31, 2025 by the county of San Bernardino as the lead
agency, which upheld the validity of the existing EIS/EIR.
Mining
The pit optimization was performed using NPV Scheduler software,
which utilizes the Lerchs-Grossmann (LG) algorithm. LG output
included the following six discrete pits for which engineering
designs were produced: Jumbo, Oro Belle, JSLA, Hart-South,
Hart-North and South Domes. A key element of the mine plan is that
pits will be mined sequentially - for instance, waste from Oro
Belle will be used to backfill Jumbo as soon as mining in that pit
is completed. In this way the surface footprint of the operation is
minimized, as are haulage profiles.
For the Base and Unconstrained scenarios, NPV was maximized by
mining all six pits in the order listed above and to the limits of
the LG shell generated using a $1300/oz price. This suggests there
is potential that any additional resource discoveries at depth
below one or more of the pits would report to an economic mine
plan. Note that resources for many of the pits are open at
depth.
For the Static Case, where the footprint for impounding waste is
restricted to the 1,375 acres currently permitted for disturbance,
the mine plan includes the entire Jumbo pit and the initial phases
of the Oro Belle and JSLA pits only.
The pit optimizations targeted both Measured and Indicated (MI)
and Inferred resources. The percentage of contained gold classified
as each for the three different cases is as follows:
- Base Case = 3,599 koz total, 77% MI and 23% Inferred
- Unconstrained Case = 4,166 koz total, 76% MI and 24%
Inferred
- Static Case = 1,081 koz total, 92% MI and 8% Inferred
Note that cut-off grades have been selected based on maximizing
after-tax NPV5%. As a result, while the Base and Unconstrained
cases mine the same total material, the lower operating cost
structure of the Unconstrained Case results in a cut-off grade of
0.13 g/t while the cut-off for the Base Case varies between 0.24 -
0.31 g/t, depending on the specific pit being mined. The cut-off
for the Static Case also varies, from 0.24 - 0.34 g/t.
The Base and Static cases envisage the mine initially delivering
6.4 Mtpa of material to the leach pad. The Static Case maintains
this rate for the entire life of mine while the Base Case is
expanded to the currently permitted limit of 8.1 Mtpa processed
starting in year 3. The Unconstrained Case assumes permits for an
expanded operation would be obtained before start-up, and delivers
18.1 Mtpa to the process from the outset.
For all cases, heap leachable material would be mined using a
fleet of hydraulic excavators with 22 m3 dippers loading 170 t haul
trucks. For the Base Case, following expansion waste would be mined
using larger rope shovels and 290 tonne haul trucks that are more
cost effective. The Unconstrained case uses the larger fleet for
mining waste from the outset.
Metallurgical and Processing
The conceptual process design is based on historic operating
practices. The Base and Static cases assume all material will be
crushed to 100% minus 9.5 mm using a mobile crusher, and heap
leached using an adsorption-desorption-recovery (ADR) circuit for
gold recovery.
With the base case a modified milling circuit is added as part
of the expansion in year three. Material with a grade above 0.85
g/t is ground to 80% passing 150 microns in a ball mill using
cyanide solution. The ground material discharges to a gravity
recovery circuit. The gold recovery from the milling circuit is
estimated to be 50%. Tailings from the gravity process are then
agglomerated with cement, mixed with lower grade crushed material,
and placed on the leach pad, which eliminates the need for a
tailings storage facility. Over time, a recovery of 90% of the
remaining gold is expected, which brings the total recovery for
material processed in the milling circuit to 95%. The percentage of
process feed that is treated through the mill ranges from 10% -
15%, less than the 20% limit established by the previous operator,
based on maintaining the structural integrity of the leach
pads.
The Unconstrained Case is similar to the Base Case, though the
leaching operation starts up at its ultimate limit of 18.1 Mtpa and
the mill is also included at start-up. The mill for this scenario
is larger than the Base Case (5 ktpd vs the 3 ktpd Base Case),
however, it treats a smaller percentage of total process feed
(10%).
Infrastructure
The Project is located 35 km from Searchlight Nevada and 112 km
from Las Vegas Nevada. The nearest powerline, which supplied power
to the previous operation, is located 29 km from site along the
access road. The Base and Static cases assume the mine would
start-up using diesel powered generators, with the Base Case
converting to grid power as part of the expansion in year 3. The
Unconstrained Case assumes the power line would be constructed from
the outset.
Currently the only existing infrastructure on site is a laydown
yard, a 950 m3 tank for water and 2 operating water wells. It is
proposed that the following infrastructure be added for the initial
phase of the Project:
- Maintenance garage, warehouse and administration complex
- Fuel storage facilities
- Additional water wells
- Internal roads, gate house and weigh station and dumps
Operating and Capital Costs
A key element of the mine design is the sequential mining of
pits, with immediate backfilling of pits as they become depleted
with run-of-mine (ROM) waste from current mining. This strategy not
only minimizes the surface footprint of the operation but also
leads to short average one-way haulage distances of 2.0 km for the
Static Case and less than 3.0 km for both the Base and
Unconstrained Cases. This is a key factor allowing relatively low
mining costs to be achieved (Table 4). The estimates of processing
costs are based on the historical labour complement and consumption
rates for reagents and current prices for all consumables. The
estimates for G&A costs are based on the historical complement
and current labour rates, while estimates for taxes, insurance and
other administrative items are based on historical actual
expenditures escalated to present terms.
Table 4 - Operating Cost Estimates by Scenario
(USD/tonne) |
|
|
|
|
|
|
|
Item |
|
units |
|
Static |
Base |
Unconstrained |
Mining total |
|
US$/tonne mined |
|
$1.84 |
$1.54 |
$1.47 |
less capitalized pre-strip1 |
|
US$/tonne mined |
|
$0.12 |
$0.02 |
$0.05 |
Mining expensed |
|
US$/tonne mined |
|
$1.72 |
$1.51 |
$1.42 |
Mining expensed |
|
US$/tonne process feed |
|
$9.14 |
$11.94 |
$7.09 |
|
|
|
|
|
|
|
Processing |
|
US$/tonne process feed |
|
$5.73 |
$4.87 |
$3.54 |
Milling |
|
US$/tonne mill feed |
|
$0.00 |
$6.70 |
$6.34 |
Leaching |
|
US$/tonne leach feed |
|
$5.73 |
$4.07 |
$2.91 |
|
|
|
|
|
|
|
G&A |
|
US$/tonne process feed |
|
$0.98 |
$0.73 |
$0.32 |
|
|
|
|
|
|
|
Total Site Operating Costs |
|
US$/tonne process feed |
|
$15.84 |
$17.55 |
$10.96 |
Notes: |
1. |
Prestrip of 14.9 Mt (Static and Base Cases) and 42.3 Mt
(Unconstrained Case) |
Estimated capital costs for the three scenarios are given in
Table 5 below. The Base and Static scenarios include the following
elements to achieve a low initial capital cost:
- The fleet of mine equipment includes available for-sale used
equipment
- New fleet purchases would be leased, using terms supplied by
OEMs operating in the region
- Mobile three-stage crushing would be utilized to achieve the
80% passing 9.5 mm crush size
- Crushed material would be trucked to the leach pad instead of
using 'grasshopper' conveyors that were employed historically
- Diesel generators would be employed instead of installing a
connection to the grid
The Base Cases includes implementation of the following
concurrent with expansion in year 3 to ensure the longer term
operating cost structure is attractive:
- Purchase of larger fleet (rope shovels and 290 tonne haul
trucks) for mining waste
- A power grid connection
- Addition of a second mobile crusher in order to achieve the
expanded production rate
- 'Grasshopper' conveyors to transport crushed material to the
leach pads
The Unconstrained Case includes these efficiency items from the
outset. The Unconstrained Case also assumes a fixed, three stage
crushing plant.
Closure costs assume that the operation's exemption from the
California obligation to backfill mined out pits will continue to
be maintained. The strategy of mining pits sequentially will
significantly mitigate any risks associated with this exemption
being revoked at some point in the future - the Base Case plan
results in 5 of the 6 pits being backfilled with ROM waste during
the course of normal operations.
Table 5 - Capital Cost Estimates by Scenario (Million
USD) |
|
|
|
|
|
|
|
Initial Capex1 |
|
units |
|
Static |
Base |
Unconstrained |
Mine2,3 |
|
US$ MM |
|
$41 |
$41 |
$107 |
Processing |
|
US$ MM |
|
$24 |
$24 |
$174 |
Infrastructure |
|
US$ MM |
|
$10 |
$10 |
$19 |
Sub-Total Directs |
|
US$ MM |
|
$74 |
$74 |
$300 |
|
|
|
|
|
|
|
Indirects |
|
US$ MM |
|
$11 |
$11 |
$57 |
Contingency |
|
US$ MM |
|
$14 |
$14 |
$64 |
Total Initial |
|
US$ MM |
|
$98 |
$98 |
$421 |
|
|
|
|
|
|
|
Expansion Capex |
|
units |
|
Static |
Base |
Unconstrained |
Mine3 |
|
US$ MM |
|
$0 |
$57 |
$0 |
Processing |
|
US$ MM |
|
$0 |
$57 |
$0 |
Infrastructure |
|
US$ MM |
|
$0 |
$9 |
$0 |
Sub-Total Directs |
|
US$ MM |
|
$0 |
$123 |
$0 |
|
|
|
|
|
|
|
Indirects |
|
US$ MM |
|
$0 |
$25 |
$0 |
Contingency |
|
US$ MM |
|
$0 |
$24 |
$0 |
Total Expansion |
|
US$ MM |
|
$0 |
$173 |
$0 |
|
|
|
|
|
|
|
Sustaining Capex |
|
units |
|
Static |
Base |
Unconstrained |
Mine3 |
|
US$ MM |
|
$71 |
$178 |
$230 |
Leach Pad & Conveyors |
|
US$ MM |
|
$8 |
$48 |
$85 |
Site General |
|
US$ MM |
|
$11 |
$23 |
$24 |
Total Sustaining |
|
US$ MM |
|
$90 |
$250 |
$339 |
|
|
|
|
|
|
|
Closure |
|
units |
|
Static |
Base |
Unconstrained |
Decommissioning |
|
US$ MM |
|
$5 |
$10 |
$15 |
Reclamation |
|
US$ MM |
|
$4 |
$17 |
$22 |
Sub-Total |
|
US$ MM |
|
$9 |
$27 |
$37 |
less Salvage4,5 |
|
US$ MM |
|
$3 |
$5 |
$7 |
Net Closure Costs |
|
US$ MM |
|
$6 |
$22 |
$30 |
|
Notes: |
1. |
Initial capital includes all expenditures prior to start-up of
process plant |
2. |
Static and Base include $6.6m for used fleet (4 x drill, 2 x
excavator, 2 x FEL and 5 x truck) |
3. |
New mining fleet leased, with 25% downpayment, 5 yr repayment and
5% interest rate |
4. |
Includes allowance for scrap plant of $0.1m (Static), $1m (Base)
and $2.5m (Unconstrained) |
5. |
Includes value of $200k for all drills, excavators, trucks and FEL
with life less than 40,000 hrs at end of mine life |
Project Economics
Table 6 provides summarized estimated production, costs and cash
flows for the Base Case. The following should be noted:
- The leach curve assumes a 3 year tail following the completion
of mining - annual output during the 'tail' has not been included
in the tables, but production and associated costs during the
'tail' years have been included in the life of mine totals
- Castle Mountain production includes recoverable quantities of
silver, with payable output based on the historic ratio of 0.3 oz
silver per 1.0 oz gold.
- The deposit is covered by a number of royalties. The current
interpretation of these royalties results in a weighted average of
approximately 2% of NSR and a range from 0% to 5%. A more detailed
interpretation of the royalties will be completed during the next
round of work.
- The cash flow model assumes surety equal to the total closure
liability would be required from the start of operations. It has
been further assumed that the surety would be borrowed and the cash
flow model includes the carrying cost of this loan.
Table 6 - Cash Flow for Base Case |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
units |
Total1 |
Yr -1 |
Yr 1 |
Yr 2 |
Yr 3 |
Yr 4 |
Yr 5 |
Ore |
kt |
132,137 |
0 |
5,874 |
6,350 |
8,029 |
8,165 |
8,165 |
Waste |
kt |
912,135 |
14,881 |
25,922 |
39,203 |
24,322 |
61,664 |
67,353 |
Total Mined |
kt |
1,044,273 |
14,881 |
31,796 |
45,553 |
32,350 |
69,829 |
75,517 |
|
|
|
|
|
|
|
|
|
Refined Au |
koz |
2,994 |
0 |
106 |
134 |
163 |
206 |
186 |
|
|
|
|
|
|
|
|
|
Cash Flow |
units |
Total |
Yr -1 |
Yr 1 |
Yr 2 |
Yr 3 |
Yr 4 |
Yr 5 |
NSR2 |
US$ MM |
$3,899 |
$0 |
$138 |
$174 |
$212 |
$268 |
$242 |
|
|
|
|
|
|
|
|
|
Mine Opex |
US$ MM |
$1,578 |
$0 |
$55 |
$74 |
$54 |
$101 |
$112 |
Process Opex |
US$ MM |
$644 |
$0 |
$35 |
$37 |
$38 |
$39 |
$39 |
G&A Opex |
US$ MM |
$97 |
$0 |
$6 |
$6 |
$6 |
$6 |
$6 |
C1
Cash Costs |
US$ MM |
$2,319 |
$0 |
$96 |
$118 |
$97 |
$146 |
$157 |
|
|
|
|
|
|
|
|
|
Royalty3 |
US$ MM |
$74 |
$0 |
$1 |
$2 |
$2 |
$3 |
$2 |
Interest4 |
US$ MM |
$10 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Total Operating Expenses3,4 |
US$ MM |
$2,403 |
$0 |
$98 |
$120 |
$99 |
$148 |
$159 |
|
|
|
|
|
|
|
|
|
Cash Taxes |
US$ MM |
$225 |
$0 |
$8 |
$9 |
$25 |
$22 |
$12 |
|
|
|
|
|
|
|
|
|
Initial Capex |
US$ MM |
$98 |
$98 |
$0 |
$0 |
$0 |
$0 |
$0 |
Expansion Capex |
US$ MM |
$173 |
$0 |
$16 |
$151 |
$6 |
$0 |
$0 |
Sustaining Capex |
US$ MM |
$250 |
$0 |
$4 |
$2 |
$35 |
$60 |
$52 |
Closure |
US$ MM |
$22 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Total Investment |
US$ MM |
$543 |
$99 |
$20 |
$152 |
$41 |
$60 |
$52 |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
US$ MM |
$728 |
($99) |
$13 |
($107) |
$46 |
$37 |
$19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
units |
|
Yr 6 |
Yr 7 |
Yr 8 |
Yr 9 |
Yr 10 |
Yr 11 |
Ore |
kt |
|
8,165 |
8,165 |
8,165 |
8,165 |
8,165 |
8,165 |
Waste |
kt |
|
68,438 |
39,153 |
25,981 |
35,754 |
58,579 |
84,634 |
Total Mined |
kt |
|
76,603 |
47,317 |
34,145 |
43,919 |
66,744 |
92,798 |
|
|
|
|
|
|
|
|
|
Refined Au |
koz |
|
228 |
177 |
148 |
150 |
123 |
215 |
|
|
|
|
|
|
|
|
|
Cash Flow |
units |
|
Yr 6 |
Yr 7 |
Yr 8 |
Yr 9 |
Yr 10 |
Yr 11 |
NSR2 |
US$ MM |
|
$297 |
$231 |
$192 |
$196 |
$160 |
$280 |
|
|
|
|
|
|
|
|
|
Mine Opex |
US$ MM |
|
$121 |
$72 |
$59 |
$74 |
$102 |
$122 |
Process Opex |
US$ MM |
|
$39 |
$39 |
$39 |
$39 |
$38 |
$39 |
G&A Opex |
US$ MM |
|
$6 |
$6 |
$6 |
$6 |
$6 |
$6 |
C1
Cash Costs |
US$ MM |
|
$166 |
$117 |
$104 |
$119 |
$145 |
$167 |
|
|
|
|
|
|
|
|
|
Total Operating Expenses3,4 |
US$ MM |
|
$170 |
$120 |
$106 |
$121 |
$148 |
$172 |
|
|
|
|
|
|
|
|
|
Cash Taxes |
US$ MM |
|
$22 |
$19 |
$13 |
$10 |
($4) |
$13 |
|
|
|
|
|
|
|
|
|
Initial Capex |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Expansion Capex |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Sustaining Capex |
US$ MM |
|
$40 |
$22 |
$13 |
$1 |
$1 |
$4 |
Closure |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Total Investment |
US$ MM |
|
$40 |
$22 |
$13 |
$1 |
$1 |
$4 |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
US$ MM |
|
$66 |
$70 |
$60 |
$63 |
$15 |
$92 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production |
units |
|
Yr 12 |
Yr 13 |
Yr 14 |
Yr 15 |
Yr 16 |
Yr 17 |
Ore |
kt |
|
8,165 |
8,165 |
8,165 |
8,165 |
8,165 |
5,744 |
Waste |
kt |
|
110,192 |
73,172 |
58,038 |
63,186 |
38,731 |
22,934 |
Total Mined |
kt |
|
118,356 |
81,336 |
66,202 |
71,351 |
46,895 |
28,678 |
|
|
|
|
|
|
|
|
|
Refined Au |
koz |
|
175 |
169 |
171 |
231 |
218 |
178 |
|
|
|
|
|
|
|
|
|
Cash Flow |
units |
|
Yr 12 |
Yr 13 |
Yr 14 |
Yr 15 |
Yr 16 |
Yr 17 |
NSR2 |
US$ MM |
|
$228 |
$220 |
$223 |
$300 |
$284 |
$232 |
|
|
|
|
|
|
|
|
|
Mine Opex |
US$ MM |
|
$155 |
$119 |
$103 |
$114 |
$81 |
$60 |
Process Opex |
US$ MM |
|
$39 |
$39 |
$39 |
$39 |
$39 |
$28 |
G&A Opex |
US$ MM |
|
$6 |
$6 |
$6 |
$6 |
$6 |
$4 |
C1
Cash Costs |
US$ MM |
|
$200 |
$163 |
$148 |
$159 |
$126 |
$92 |
|
|
|
|
|
|
|
|
|
Total Operating Expenses3,4 |
US$ MM |
|
$204 |
$173 |
$156 |
$170 |
$137 |
$100 |
|
|
|
|
|
|
|
|
|
Cash Taxes |
US$ MM |
|
($3) |
$0 |
$7 |
$20 |
$22 |
$26 |
|
|
|
|
|
|
|
|
|
Initial Capex |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Expansion Capex |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
Sustaining Capex |
US$ MM |
|
$3 |
$1 |
$1 |
$2 |
$3 |
$2 |
Closure |
US$ MM |
|
$0 |
$0 |
$0 |
$0 |
$13 |
$0 |
Total Investment |
US$ MM |
|
$3 |
$1 |
$1 |
$2 |
$16 |
$2 |
|
|
|
|
|
|
|
|
|
Free Cash Flow |
US$ MM |
|
$25 |
$45 |
$59 |
$108 |
$109 |
$103 |
|
|
|
|
|
|
|
|
|
Notes: |
1. |
Includes revenues and associated costs from 17 koz Au recovered
during rinsing of pads post- mine closure |
2. |
Based on $1300 Au and includes contribution from by-product Ag and
deductions for refining |
3. |
Includes royalties that vary from 0% - 5% of NSR |
4. |
Includes interest on borrowings to satisfy requirement for post
closure bond |
Metal Price Sensitivities
As can be seen in Tables 7 and 8 below, a $10/oz increase in the
long term gold price has the following impact on the Base Case:
- NPV5% is increased by $19m (pre-tax) or $13m (post-tax)
- IRR is increased by 0.8% (pre-tax) or 0.6% (post-tax)
- Simple Payback is reduced by approximately 1.3 months (both
pre-tax and post-tax)
Table 7 - Pre-Tax Sensitivities
Gold Price |
|
units |
$1,200 |
$1,250 |
$1,300 |
$1,350 |
$1,400 |
$1,450 |
$1,500 |
|
|
|
|
|
|
|
|
|
|
NPV 5% |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
$109 |
$142 |
$176 |
$209 |
$243 |
$276 |
$310 |
Base Case |
|
US$
MM |
$323 |
$417 |
$510 |
$603 |
$696 |
$789 |
$882 |
|
|
|
|
|
|
|
|
|
|
NPV 0% |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
$161 |
$202 |
$243 |
$285 |
$326 |
$367 |
$408 |
Base Case |
|
US$
MM |
$677 |
$824 |
$970 |
$1,117 |
$1,264 |
$1,411 |
$1,558 |
|
|
|
|
|
|
|
|
|
|
IRR |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
27.0% |
33.3% |
39.5% |
45.6% |
51.6% |
57.5% |
63.3% |
Base Case |
|
US$
MM |
19.5% |
23.7% |
28.0% |
32.4% |
36.9% |
41.4% |
46.1% |
|
|
|
|
|
|
|
|
|
|
Simple Payback |
|
|
|
|
|
|
|
|
|
Static |
|
months |
32 |
29 |
27 |
24 |
23 |
21 |
20 |
Base Case |
|
months |
76 |
68 |
61 |
52 |
45 |
42 |
39 |
Table 8 - Post-Tax Sensitivities
Gold Price |
|
units |
$1,200 |
$1,250 |
$1,300 |
$1,350 |
$1,400 |
$1,450 |
$1,500 |
|
|
|
|
|
|
|
|
|
|
NPV 5% |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
$75 |
$100 |
$124 |
$149 |
$173 |
$196 |
$219 |
Base Case |
|
US$
MM |
$220 |
$289 |
$359 |
$427 |
$493 |
$558 |
$622 |
|
|
|
|
|
|
|
|
|
|
NPV 0% |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
$119 |
$150 |
$180 |
$210 |
$239 |
$268 |
$296 |
Base Case |
|
US$
MM |
$520 |
$628 |
$740 |
$846 |
$949 |
$1,052 |
$1,154 |
|
|
|
|
|
|
|
|
|
|
IRR |
|
|
|
|
|
|
|
|
|
Static |
|
US$
MM |
20.5% |
25.4% |
30.2% |
34.8% |
39.3% |
43.7% |
47.9% |
Base Case |
|
US$
MM |
14.5% |
17.4% |
20.4% |
23.4% |
26.3% |
29.3% |
32.3% |
|
|
|
|
|
|
|
|
|
|
Simple Payback |
|
|
|
|
|
|
|
|
|
Static |
|
months |
49 |
34 |
31 |
29 |
27 |
25 |
23 |
Base Case |
|
months |
93 |
83 |
76 |
70 |
65 |
61 |
54 |
Risks
Risks associated with the Project include:
- The metallurgical performance of different process feeds. The
Base Case mine plan includes processing of 3,599 koz contained
gold. Of this total, 1,791 koz (50%) is located within the Jumbo,
Oro-Belle and JSLA pits previously mined and above the deepest
horizon of historic activity, 158 koz (4%) is located within the
same pits but below the deepest horizon of historic activity, 482
koz (13%) is located within the Hart Tunnel pits that are
immediately adjacent to the three previously mined pits and the
remaining 1,188 koz (33%) is located within the South Domes pit
that is offset from the other five by approximately 500 m. There is
some confidence that the 50% of material located in the pits and
horizons mined previously will perform similar to material
processed previously. There is less confidence regarding the
metallurgical performance of the remaining material. The next round
of work will include metallurgical testing that aims to improve the
confidence in recovery estimates for all material planned to be
processed.
- A sustained and significant reduction in gold prices. As noted
above, financial returns are sensitive to the gold price. To an
extent, downside risk is mitigated by the plan that includes mining
of six discrete pits, which provides operators with considerable
flexibility in responding to short term fluctuations in price. The
NPV5% breakeven price is $1050/oz.
- Capital cost overruns. As with all mining projects, financial
returns are sensitive to capital costs. For Castle Mountain, risks
associated with capital costs are mitigated by the relative
simplicity of the design (the initial project intends to
essentially replicate the previous successful design). Risks
associated with capital costs are also mitigated by the permitting
status - subject to obtaining the requisite project finance,
construction will be able to start in the near term - and the
current non-inflationary environment within the mining
industry.
- Operating cost overruns. The project is more sensitive to
operating costs. For Castle Mountain, risks associated with
operating costs are mitigated by following the historic design,
which proved the viability of operating concepts. Risk will be
further mitigated by the current non-inflationary environment
within the mining industry and expected short path to production.
In particular, it is expected that skilled personnel are available
to staff the project.
- Water. Historically the operation successfully processed
approximately 3.6 million tonnes per year over a ten year period
with continued leaching for several years after mining ceased. This
PEA projects a higher processing rate which will require more water
and the work has not yet been done to show there is enough water
for the projected rate. The Company plans to start hydrogeological
work on the project in the very near term.
- Permitting. While the Company has the key Mining and
Reclamation permit required for operation, other permits are still
required. There are no assurances that these permits will be
granted. The Base and Unconstrained Cases also envision using land
which while inside the approved EIS/EIR boundary is outside of the
area currently permitted for disturbance. There are no assurances
the Company will be able to amend the Mine Plan to include
additional areas of disturbance.
- Mineral Resources. This PEA is based on MI&I Resources,
there are no assurances that this material will all be converted to
Reserves
- Further risk factors are set out in the Company's continuous
disclosure documents filed on SEDAR.
Next Steps
Castle Mountain is in possession of the key permit required to
re-start operations. It is expected that the remaining permits will
be acquired in parallel with the feasibility study and that,
subject to the availability of project finance, it would be
possible to start construction during 2015.
Key elements of work that will be completed as part of the
Feasibility study include:
- Hydrogeological studies to determine the quantity of water
available for process operations. This will include near-term
testing of the aquifer for recharge since operations ceased in
2004.
- Geotechnical studies will be conducted to confirm the open pit
slope angles that can be achieved, and also confirm the design
criteria for the various impoundments.
- Metallurgical studies will be conducted to improve confidence
in the recovery that can be achieved from the different pits, along
with confirming the expected consumption of various reagents.
- Step out drilling will be conducted to test undrilled areas
within the current pit shells that, in the absence of data, are
currently classified as waste. Infill drilling will be conducted to
upgrade inferred resources that are included in the early years of
the mine plan.
Detailed Report
The entire Preliminary Economic Assessment will be available
within 45 days of this press release at www.sedar.com and on the
Company's corporate website www.castlemountainmining.com.
Note: This Preliminary Assessment Study is conceptual in nature
as in addition to the indicated resource it is also based on the
inferred resource, which at this stage does not have a high enough
geostatistical level of confidence to provide the economic basis
for a production decision. The Company is in the process of
completing its infill drilling program to advance the Project to
the Feasibility Study level.
Independent Qualified Persons ("QPs")
QPs who have prepared or supervised the preparation of the
technical information relating to the Preliminary Economic
Assessment include:
• |
Kathleen Altman, P.E., Ph.D. (RPA) |
• |
Jason Cox, P.Eng. (RPA) |
• |
David Penswick, P.Eng. (Independent) |
• |
Reno Pressacco, P.Geo. (RPA) |
All four authors are "independent qualified persons" as
that term is defined in National Instrument 43-101. They have each
reviewed and approved the contents of this press release. |
Conference Call
A conference call to discuss Castle Mountain and the PEA will be
held at 11:00 am EDT (Eastern Daylight Time) on April 24, 2014.
Interested parties are invited to participate by connecting to the
call using one of the following dial-in numbers:
Dial in Number: North American Toll-Free: (877) 223-4471
or |
Local / International: (647) 788-4922 (use outside of North
America) |
Conference ID: 34196771 |
Replay
A digital recording of the conference call will be available for
replay two hours after the call's completion. To access the
recording, use the dial-in number and then the conference ID number
shown below:
Replay Dial In: (800) 585-8367 |
Conference ID: 34196771 |
About Castle Mountain Mining Company
Subject to certain obligations, Castle Mountain Mining has 100%
of the right, title and beneficial interest in and to the Castle
Mountain Venture, a California general partnership, which owns the
Castle Mountain property in San Bernardino County, California. The
Castle Mountain heap leach gold mine produced over one million
ounces of gold from 1992 to 2001, when mining was suspended due to
low gold prices.
The Castle Mountain Venture land holdings (7,458 acres total)
include patented claims (1,298 acres), and unpatented claims (6,160
acres). On December 11, 2013, the Company filed the Technical
Report for its maiden NI 43-101 mineral resource estimate, that is
available both on SEDAR at www.sedar.com and on the Company's
website at www.castlemountainmining.com.
Castle Mountain Mining Company Limited, through its wholly owned
subsidiaries including Castle Mountain Venture, is focused on the
exploration and, if warranted, development of deposits in San
Bernardino County, California. The principal gold mineralization
identified to date within the Project are below and surrounding the
historically mined pits on the property including the Oro
Belle-Hart Tunnel, Jumbo, and Lesley Anne-Jumbo South Pits, as well
as in the South Domes area.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
Non-GAAP Measures
"All-in sustaining costs" per ounce are presented in accordance
with the guidance announced in 2013 from the World Gold Council,
Castle Mountain believes this non-GAAP measure provides further
transparency into costs associated with producing gold and will
assist analysts, investors and other stakeholders of the Company in
assessing the project's expected operating performance, ability to
generate free cash flow and its overall value. This data is
furnished to provide additional information and is a non-GAAP
measure. All-in sustaining costs presented do not have a
standardized meaning under GAAP and may not be comparable to
similar measures presented by other mining companies. It should not
be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP and is not necessarily
indicative of operating costs presented under GAAP.
Forward-Looking Statements
Statements contained in this press release that are not
historical facts are "forward-looking information" or
"forward-looking statements" (collectively, "Forward-Looking
Information") within the meaning of applicable Canadian securities
legislation and the United States Private Securities Litigation
Reform Act of 1995. Forward Looking Information includes, but is
not limited to, disclosure regarding the economics and project
parameters presented in the PEA, including, without limitation,
IRR, all-in sustaining costs, NPV and other costs and economic
information, possible events, conditions or financial performance
that is based on assumptions about future economic conditions and
courses of action; the timing and costs of future development and
exploration activities on the Company's properties; success of
development and exploration activities; permitting time lines and
requirements; time lines for technical reports and further studies,
including a feasibility study; planned exploration and development
of properties and the results thereof; and planned expenditures and
budgets and the execution thereof. In certain cases,
Forward-Looking Information can be identified by the use of words
and phrases such as "plans", "expects" or "does not expect", "is
expected", budget", "scheduled", "suggest", "optimize",
"estimates", "forecasts", "intends", "anticipates", "potential" or
"does not anticipate", believes", "anomalous" or variations of such
words and phrases or statements that certain actions, events or
results "may", "could", "would", "might" or "will be taken",
"occur" or "be achieved". In making the forward-looking statements
in this press release, the Company has applied several material
assumptions, including, but not limited to, the assumptions
inherent to the PEA, that the current development, exploration and
other objectives concerning the Castle Mountain Project can be
achieved and that its other corporate activities will proceed as
expected; that the current price and demand for gold will be
sustained or will improve; that general business and economic
conditions will not change in a materially adverse manner and that
all necessary governmental approvals for the planned exploration on
the Castle Mountain Project will be obtained in a timely manner and
on acceptable terms; the continuity of the price of gold and other
metals, economic and political conditions and operations.
Forward-Looking Information involves known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the Forward-Looking Information. Such risks
and other factors include, among others, risks inherent to the
preliminary nature of the PEA, risks related to permitting, water
availability, operating cost overruns, and capital cost overruns;
risks related to a sustained and significant reduction in gold
prices; risks that the metallurgical performance of different
process feeds are not as anticipated; risks related to the
availability of financing on commercially reasonable terms and the
expected use of proceeds; operations and contractual obligations;
changes in development and exploration programs based upon results
of exploration; availability of third party contractors;
availability of equipment; failure of equipment to operate as
anticipated; accidents, effects of weather and other natural
phenomena and other risks associated with the mineral exploration
industry; environmental risks, including environmental matters
under U.S. federal and California rules and regulations; impact of
environmental remediation requirements and the terms of existing
and potential consent decrees on the Company's planned development
and exploration on the Castle Mountain Project; certainty of
mineral title; community relations; delays in obtaining
governmental approvals or financing; the Company's dependence on
one mineral project; the nature of mineral development, exploration
and mining and the uncertain commercial viability of certain
mineral deposits; the Company's lack of operating revenues;
governmental regulations and the ability to obtain necessary
licenses and permits; risks related to mineral properties being
subject to prior unregistered agreements, transfers or claims and
other defects in title; currency fluctuations; changes in
environmental laws and regulations and changes in the application
of standards pursuant to existing laws and regulations which may
increase costs of doing business and restrict operations; risks
related to dependence on key personnel; and estimates used in
financial statements proving to be incorrect; as well as those
factors discussed in the Company's public disclosure record and
annual information form for the year ended December 31, 2013 which
is available on SEDAR at www.sedar.com.
Although the Company has attempted to identify important factors
that could affect the Company and may cause actual actions, events
or results to differ materially from those described in
Forward-Looking Information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. There can be no assurance that Forward-Looking
Information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
Forward-Looking Information. Except as required by law, the Company
does not assume any obligation to release publicly any revisions to
Forward-Looking Information contained in this press release to
reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.
Castle Mountain Mining CompanyGordon McCrearyPresident and
CEOTel: (416) 572-0152E-mail:
gmccreary@castlemountainmining.comwww.castlemountainmining.comFraser
BuchanVP Corporate DevelopmentTel: (416) 640-1933E-mail:
fbuchan@83yonge.com
Canabo Medical (delisted) (TSXV:CMM)
過去 株価チャート
から 5 2024 まで 6 2024
Canabo Medical (delisted) (TSXV:CMM)
過去 株価チャート
から 6 2023 まで 6 2024