News Rodeo Will be mined in 2021 @AISC of just $843 oz
Golden Minerals PEA pegs Rodeo NPV at $22.46M (U.S.)
2020-04-15 07:22 ET - News Release
Mr. Warren Rehn reports
GOLDEN MINERALS ANNOUNCES PRELIMINARY ECONOMIC ASSESSMENT FOR RODEO GOLD PROJECT
Golden Minerals Company has released results from a preliminary economic assessment (PEA) completed for its Rodeo open-pit gold project located in Durango state, Mexico.
PEA Financial and Economic Highlights
Independent engineering firm Mineral Resources Engineering has prepared the PEA for the Company in accordance with Canadian National Instrument 43-101 "Standards of Disclosure of Mineral Projects" ("NI 43-101"). The resource used for this PEA was developed in accordance with Canadian NI 43-101 by the independent engineering firm Tetra Tech (report dated January 26, 2017: NI 43-101 Technical Report; Mineral Resource Estimate; Rodeo Project; Rodeo, Durango, Mexico).
The PEA assumes prices of $1,622/oz gold and $14.38/oz silver. Preliminary results of the economic analysis are shown in after-tax U.S. Dollars as highlighted below. The complete PEA will be published on SEDAR within 45 days of this press release.
After-tax net present value ("NPV"): (US)$22.5 million at an 8% discount rate Life of Mine ("LOM") after-tax free cash flow: $24.9 million
Pre-production development time: 1 quarter (3 months) LOM: 9 quarters Total pre-production costs, including capital and contingency: $1.5 million After-tax payback period:
during the first production quarter LOM contained production: 41 Koz Au; 118 Koz Ag LOM payable production : 34 Koz Au ; 89 Koz Ag LOM average gold grade: 3.31 grams per tonne ("g/t"); average silver grade: 9.65 g/t
Cash cost per Au oz, net of by-product credits: $798 All-in sustaining cash cost per Au oz, net of by-product credits: $843
Warren M. Rehn, Golden's President and Chief Executive Officer, notes, "We've purposely held onto the Rodeo project for several years, waiting for the right opportunity to monetize this asset by utilizing our existing infrastructure to process its gold and silver.
With the Hecla lease coming to an end this year, we intend to bring Rodeo into production in 2021.
This PEA indicates that Rodeo presents us with the opportunity to realize over $24 million of after-tax cash flow in two years' time with very low capital requirements, which will in turn support our work at Velardena and other exploration projects."
After-Tax Economic Results of the Project: Item Total LOM ($millions)Total LOM (per tonne) Gross Payable $ 55.67 $ 146.03 TCs, Freight, Ins, Etc. ($1.05) ($2.75) NSR $ 54.63 $ 143.28 Royalties ($1.37) ($3.58) Operating Costs Mining ($9.12) ($23.91) Processing Costs ($12.92) ($33.90) G&A and Head Office ($0.43) ($1.14) Contingency ($2.25) ($5.89) Operating Margin $ 28.54 $ 74.86 Capital Cost Mine Capital ($0.54) ($1.41) Pre-Production Costs ($0.81) ($2.14) Contingency ($0.16) ($0.42) Pre-Tax Cash Flow $ 27.03 $ 70.89 Pre-Tax NPV8% $ 24.36 Income Tax Provision ($2.14) After Tax Cash Flow $ 24.89 After-Tax NPV8% $ 22.46
Mine Planning
The strip ratio for the project is 1.7:1, and the processing plant's daily throughput is estimated to be 480 tpd (based on a 350-day operating year). The excavation of the Rodeo resource will be completed in three push backs starting in the highest-grade material closest to the surface.
The mining excavation will be completed using a regional contractor. Golden Minerals will supply overall project management and engineering, which includes in-pit technicians that will determine whether material is suitable for process or placement on the waste dump.
The Golden Minerals lab, located in Velardena, Durango will be used for the project's assaying requirements. Golden Minerals' oxide plant at Velardena, which will be used to process the mined material from Rodeo, is a typical agitated leach plant that can handle up to 550-tpd of throughput.
The plant is equipped with a modern dore refinery, and the attached tailings facility recently underwent a major expansion.
PEA Information and Cautionary Note Regarding Inferred Resources
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