As expected, a NR is released:
Orex's Goldboro PEA expects initial 21,000 oz Au/year
2014-04-16 09:59 ET - News Release
Mr. Willie McLucas reports
OREX: PRELIMINARY ECONOMIC ASSESSMENT-POSITIVE REPORT
Orex Exploration Inc.'s board of directors has received the preliminary economic assessment (PEA) on the Goldboro gold project undertaken by MineTech International Ltd. of Halifax, N.S. MineTech reviewed the Boston Richardson and the East and West Goldbrook deposits at Goldboro which collectively hold a measured resource of 27,900 ounces of gold (149,000 tonnes at 5.8 grams per tonne (g/t) gold) and indicated resource of 358,700 ounces (1,436,000 tonnes at a grade of 7.8 g/t gold) using a three g/t cut-off grade. The deposits also contain inferred resources of 343,400 ounces gold (1,537,000 tonnes at 6.95 g/t gold) as disclosed in the Feb. 11, 2013, Mercator National Instrument 43-101 report.
The preliminary economic assessment 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 preliminary economic assessment will be realized.
The board of directors has reviewed the document and has approved the release of the report, which will be posted on SEDAR shortly.
Highlights from the report:
- The PEA expects a mechanized underground mine, with cash cost of production forecast at $500 (U.S.) per ounce over the life of the mine. Initial output of 21,000 ounces of gold per yearh (after mill recovery and NSR) is expected to rise to over 30,000 ounces per year (after mill recovery and NSR) following the planned expansion in year three. Peak production in years seven and eight is forecast at over 40,000 ounces per year (after mill recovery and NSR).
- An expenditure of $24.3-million (U.S.) is needed for preproduction and first year capital, including a 20-per-cent contingency. An additional $3.7-million (U.S.) is needed for working capital. Expansion from 350 tonnes per day to 500 tonnes per day is estimated to cost $8.8-million (U.S.) during years two and three including the expansion of the milling capacity. The sustaining capital over the life of mine is forecast to be $13.4-million (U.S.) or approximately $2.2-million (U.S.) per year, commencing in year four.
- The mine life is estimated to be 11 years and the associated table illustrates the net present value of the Goldboro project based on a range of gold prices and discount rates. The base case used by MineTech during modelling was $1,200 (U.S.) per ounce.
GOLDBORO MINE NET PRESENT VALUE Gold price in U.S. dollars per ounce $1,200 $1,250 $1,300 $1,350 $1,400 $1,450 Discount rate Net present value after tax (NPV) (in millions) 5.0% $98 $107 $116 $124 $133 $142 7.5% $80 $88 $95 $103 $110 $118 10.0% $66 $72 $79 $85 $92 $99
- Underground mining will initially be carried out using a single-drill jumbo. At this time no surface mining is planned.
- Metallurgical testwork showed that 70 per cent of the gold can be recovered using a simple gravity separation process. A flotation concentrate will recover another 20 to 23 per cent. It is planned to treat concentrate on-site and produce dore bars.
- Mining would commence using the existing portal and developed areas, which will mean that only minor development work is required to access the first two years of production.
- An initial estimated work force of 85 people will be required and that up to 120 long-term jobs will be created in the area.
- The corporation intends to continue to explore at the Goldboro property with a view to increasing the size of the deposit at depth and to the eastern boundary of the property. It is also planned to carry out infill drilling in an effort to convert some of the current inferred and indicated resources into measured resources.
- The property boasts excellent resource expansion potential in all directions which could extend the current estimated mine life.
It is anticipated that an environmental study capable of complying with world-recognized Equator Principles will be undertaken.
Technical information pertaining to the preliminary economic analysis contained in this news release was reviewed by Patrick Hannon, MASc, PEng, of MineTech International Ltd., who is an independent qualified person as defined under National Instrument 43-101.
Commenting on this development, Willie McLucas, president and chief executive officer, said: "When I first visited the Goldboro property in August, 2013, I was excited by the opportunity and I am very pleased that the results shown in the PEA confirm my optimism. The recent increase in interest in gold projects in Nova Scotia can only be of benefit to our cause. Your board will now actively commence the search for a debt funding package of this project in order to minimize dilution to existing shareholders."
We seek Safe Harbor.