Denver/ RichardRe: Newstrike by Dale8 » Thu Sep 18, 2014 12:20 am Newstrike’s Ana Paula PEA Exceeded Expectations – CEO Richard Whittall By Alex Létourneau of Kitco News Wednesday September 17, 2014 11:25 AM Denver (Kitco News) - With its captive audience, the 25th Denver Gold Forum is not a bad time to put out a positive Preliminary Economic Assessment (PEA) as Newstrike Capital Inc. (TSXV:NES) discovered after releasing one for their Ana Paula project, located in Mexico’s Guerrero Gold Belt. “In some areas, it beat my expectations,” Richard Whitall, president and chief executive officer of Newstrike told Kitco News at the Denver Gold Forum. “We didn’t plan to have it released at the forum; it just worked out that way,” he said with a chuckle. Using a base case of $1,300 gold and $20 silver, the PEA shows pre-tax net present value (NPV) at 5% of $405.3 million, an internal rate of return (IRR) of 47.5% with a 2-year payback. The after-tax NPV at 5% of $232.1 million shows an IRR of 32.8% with a 2.4 year payback, the report stated. With a mine life of more than 8.2 years, the average annual production at the open pit mine is expected to total 116,000 gold ounces and 239,000 silver ounces. All-in sustaining costs are expected to total $567 per ounce of gold and $526 per ounce gold net of by-Product credits. “We would be in the lowest cost quartile globally, and that’s good,” Whittall said. “It’s not wildly expensive to build it at $163.9 million.” The company shows initial capital costs of $163.9 million for the total life of mine. The company said the $219.7 million capital figure includes sustaining and closure costs of $55.8 million and contingency costs of $36.2 million. Newstrike said the open pit mine is expected to process 6,000 tons per day using a gravity/flotation/CIL process plant. Whittall is most excited about the potential he believes Ana Paula is sitting on within the Guerrero Gold Belt. Newstrike’s project is located near Goldcorp’s Los Filos mine and Torex’s Morelos Project. Agnico Eagle recently joined the neighbourhood with its acquisition of Cayden Resources and its Morelos Sur project in the area. “Ana Paula, which is the baby in the area, is likely to expand,” Whittall said. “We have a huge underground potential.” He also said the company is looking to take Ana Paula through its next steps. “We’re doing the next round, we’ll be taking it into the pre-feasibility study stage – we’re really going to gear up and put this into development,” he said. “We’ll raise some capital between now and the end of the year and go the distance.”