Mariana PEA is out : Postiive IRR of 153%....! Hot Maden High Grade Gold-Copper Project- PEA Results with a Positive IRR of 153%
Mariana Resources Limited ('Mariana' or 'the Company'), the TSX.V and AIM (MARL) listed exploration and development company with projects in Turkey, South America, and Ivory Coast, is pleased to announce a highly favourable outcome for a Preliminary Economic Assessment ("PEA" or the "Study") of the high grade Hot Maden gold-copper project in NE Turkey. The PEA was prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") by independent mining consultant firm RungePincockMinarco Limited ("RPM").
Highlights of the Study (100% Project Basis)
- Conceptual development for Hot Maden assumes an all underground mining operation from a decline and utilizing mechanized transverse and longitudinal long hole open stoping with engineered fill mining methods. Mining and processing rates of 0.8 million tonnes per annum ("Mtpa"), 1.0 Mtpa, and 1.2 Mtpa were considered, with the base case mining scenario being established at 1.0 Mtpa.
- Total metal production of 2.6 Million ounces ("Moz") of gold and 142,000 tonnes ("t") of copper over a total project life of 9 years for the base case mining scenario. Metallurgical testwork, through flotation and concentration, completed to date on the high grade Main Zone mineralisation has indicated high recoveries of both gold and copper. A variable processing recovery, dependant on grade, has been applied in the PEA resulting in a project weighted average recovery of 88% Au and 90% Cu. The current Hot Maden plant flow sheet assumes the production of two concentrates on site - one standard copper-gold concentrate, and a second gold-bearing pyrite concentrate.
- Post-tax discounted NPV for the base case mining scenario (1.0 Mtpa) of US$1.37 billion ("B") excluding pre-development exploration costs (8% discount rate).
- Post-tax IRR for the base case mining scenario of 153% excluding acquisition costs.
- Total Capex (Initial + Sustaining) of US$261M
Note that the PEA is preliminary in nature as 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. Mineral resources that are not mineral reserves do not have demonstrated economic viability, and as such there is no certainty that the preliminary assessment and economics will be realized. A NI-43-101- technical report for the Hot Maden PEA will be filed on SEDAR (www.sedar.com) within 45 days and also be posted on Mariana's website (www.marianaresources.com).
The Hot Maden project is 70:30 Joint Venture between Turkish partner Lidya Madencilik Sanayi ve Ticaret A.S. ("Lidya") and Mariana Resources Ltd.
Chief Executive Officer Glen Parsons today commented:
"The potential value is finally revealed from the high grade Au-Cu Hot Maden project with these PEA results from RPM. We have always believed Hot Maden to be a world class deposit and, with a potential post-tax NPV for the base case mining scenario of $1.37B and post-tax IRR of 153%, this is certainly proven correct. The high grade nature of this resource and relatively low capital (CAPEX) and operating (OPEX) costs should result in the delivery of considerable cashflow and a short payback period (around 2.1 years, including underground mine development) on initial investment.
Despite Hot Maden's rapid advancement from discovery to PEA in just 20 months, the decision by the Lidya/Mariana (70/30) joint venture to rapidly move to development is justified with the value of the project for shareholders reflected in the significant cash flow generative ability through the life of this initial current resource. The result is expected to be a low cost, low environmental footprint, but highly profitable mine.
A further 20,000m of drilling is budgeted and planned for this new year and we must remember that exploration drilling continues to focus on the discovery of new gold-copper resources at Hot Maden, especially to the south of the Main Zone within the old "Russian Mining Area.
The Joint Venture will also continue to work on the technical studies and optimisations required to underpin the Preliminary Feasibility Study ("PFS"), which is anticipated to be completed during Q3, 2017. The PFS will provide higher confidence level mine designs, mineral processing scenarios, and costings for the Hot Maden Project. Therefore this result could change over time based on the updated prices, resource and assumptions.
I look forward to updating the market on developments, as 2017 will continue to be a busy period for Mariana."