- Why is the Company completing another PEA?
- What are the next steps?
- Given the Company's resouce has a relatively low average grade, is it fair to assume that it requires a much higher gold price in order to be economically feasible?
- Does the metallurgical recovery process prove to be a challenge in recovering gold from the resource?
- Does the mine tailing accident near your project area create big hurdles in permitting for your project?
1. Why is the Company completing another PEA?
We have defined a large (and growing) resource, which comes with great development flexibility. It is far more effective to assess all the development options with PEAs or scoping studies before moving on to pre-feasibility or feasibility studies. Going by the improvements we have seen with each new PEA, we believe we are moving in the right direction.
2. What are the next steps?
With a supportive gold price environment and funding secured, we are ready to advance our project on a sustained basis! The project is now fully funded to pursue the dual objectives of fast tracking Phase 1 of the Project to be “shovel ready” and actively expanding the mineral resource. With the extensive work we have done over the years, we believe we can achieve our both our objectives with a compressed timeline and a modest budget. We will announce our project work and progress on a regular basis.
3. Given the Company’s resource has a relatively low average grade, is it fair to assume that it requires a much higher gold price in order to be economically feasible?
This is a popular assumption: resources with lower average grade require high metal price to be economic. This is only a half truth! Yes, lower grade means lower “revenue” per tonne of resource. But economic returns must also factor in the “cost” side of the equation. Our many studies have demonstrated our project’s cost advantage given our excellent infrastructure and proximity to labour, suppliers and grid power. As evidence, our strategic approach demonstrated in the latest PEA shows there is plenty of profitability within our large resource. Phase I operations have a very low AISC (all-in-sustaining cost) per ounce given the combination of “high-grade” within the resource and our project’s low operating cost.
4. Does the metallurgical recovery process prove to be a challenge in recovering gold from the resource?
Not at all. We have completed detailed confirmatory testwork in our project’s recovery process. In fact, we have managed to improve the process in each round of testing. The project has a simple flowsheet with conventional milling that has low power cost and reagent consumption. We are completely confident with the high overall recovery of 91%.
5. Does the mine tailing accident near your project area create big hurdles in permitting for your project?
We have a long history of community engagement and transparency in operating our business. Community members have direct access to senior management to express any concerns they have about our project. We have not received any negative feedback regarding our project or the way we run our business in the aftermath of the accident. More importantly we believe that there are many significant differences in our proposed tailing design and water/ discharge management so that community’s concerns can be adequately addressed. Our studies have always incorporated our proposed design and water management strategy. At this point, changes in the permitting process in light of the accident do not appear to have materially impacted our project.