Magistral PEA and Mineral Resource Estimate

Magistral Project NI 43-101 Technical Report on Preliminary Economic Assessment

PEA Highlights

The Magistral PEA and Mineral Resource Estimate was completed by Ausenco Engineering.

Ausenco was engaged in February 2021 to conduct a PEA for the Magistral Project including additional metallurgical test work to determine the final flow sheet design and what modifications could be made to the existing facility to maximize gold recoveries and reduce operating costs.

The most notable highlights include:

  • Projected average annual gold production of 16,000oz + copper concentrate

  • Cash operating costs of $648/oz and AISC of $705/oz Au, net of copper and silver by-product credit.

  • Pre-tax IRR of 120% and post-tax IRR of 85% at $1600/oz Au.

  • Pre-tax annual free cash flow of $15.3M USD ($19.3M CAD) in peak years

Read the full PEA news release

Preliminary Economic Assessment Metrics

  • Initial capital costs of $11.1M USD and after-tax payback in 1.0 years
  • Development timeline of 12 months
  • Cash operating costs of $648/oz and AISC of $705/oz Au, net of copper and silver credits

  • Pre-tax IRR of 120% and after-tax IRR of 85% at base case prices of $1600/oz gold, $22/oz silver, and $3.40/lb copper

  • Pre-tax annual free cash flow of $15.3M USD ($19.3M CAD) and post-tax cash flow of $11.3M USD ($14.3M CAD) during years of full-rate production

  • LOM of 3.4 years with total production of 53,900oz Au, 75,800oz Ag and 1.9Mlbs Cu

Envisioned Mining Scenario

The development case presented in the PEA is a 1,000tpd tailings reprocessing operation. The tailings material will be mined by excavator and delivered to the mill using 20T trucks with one-way hauling distances of 100-500m. The existing Magistral processing facility will be used to slurry, grind and leach the feed material. Pregnant cyanide solution will be sent to a new SART (sulphidation, acidification, recycling, and thickening) circuit for recovery of copper and silver into a concentrate and then on to the existing Merrill Crowe circuit for gold recovery.

Diluted head grade of the tailings material is expected to average 1.87g/t Au, 3.1g/t Ag, and 0.17%Cu with total recoveries of gold, silver and copper estimated at 80.7%, 68.4% and 46.2%, respectively.

The forecasted life-of-mine (“LOM”) for processing of the Magistral tailings resource is 3.4 years. Management is exploring the possibility of sourcing additional local tailings that could extend out the LOM.

Project Economics

The project's key economic metrics are summarized in Table 1 with additional metrics and assumptions used in the PEA summarized in Table 2.

Readers are cautioned that the PEA is preliminary in nature. It includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Table 1 â€“ Key Economic Metrics

Table 2 - Other Project Metrics and Assumptions

View the complete PEA results


Mineral Resource Estimate

The Mineral Resources for the project are reported at a 0.50 g/t Au cut-off grade within a constraining shell. The mineral resources are summarized in Table 8 and the resource classifications are defined by the CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM Council. The effective date of the Mineral Resources is 15 November 2021