Feasibility study highlights:
- Solid output: Annual average gold production of 142,000 ounces over 11 years.
- High return: Pre-tax internal rate of return of 23.6%, net present value of $522
million and payback period of 3.6 years.
- Low production cost: Production cash costs of $720/oz (US$550/oz) and all-in-sustaining costs of $826/oz (US$630/oz).
- CAPEX: Initial capital expenditures of $464 million, including about $230 million for the mill and tailings facility.
- Strategic location: Mine infrastructure to be located on newly acquired land next to the Trans-Canada highway and
200 metres from the railway leading to all the main custom milling facilities.
- Strong exploration potential: Deposit largely underexplored at depth and along strike.
MONTREAL, Dec. 3, 2018 /CNW/ - MONARQUES GOLD
CORPORATION ("Monarques" or the "Corporation") (TSX: MQR) (OTCMKTS: MRQRF) (FRANKFURT: MR7) is pleased to report
positive results from the feasibility study ("FS") prepared by BBA
Inc. ("BBA") for the Wasamac Gold project, located 15 km west of Rouyn-Noranda, in Abitibi,
Quebec. The purpose of this FS was to complete a review and compilation of the resources
re-qualified in October 2017 by Roscoe Postle Associates Inc. ("RPA"), incorporate advanced mining
designs by integrating the Rail-Veyor® technology and a paste backfill system, investigate processing options,
tailings and water management facilities and assess the economics of this underground gold project. The technical report
summarizing the results of the FS can be found on the Monarques website via the following link: Wasamac 2018 feasibility
study.
The results of the FS show that Wasamac is an economically viable project that is expected to be a low-cost producing mine.
The FS also provides the basis for making a production decision and serves to fully support the permitting and financing
processes.
"As evidenced by these results, the Wasamac Gold project has the makings of a great gold mine," said Jean-Marc Lacoste, President and Chief Executive Officer of Monarques. "The feasibility study is based on a
top-down mining approach and the use of the Rail-Veyor® system through a twin-ramp access and haulage facility, which
eliminates the hefty initial capital expenditures associated with building a shaft, increases flexibility in mine planning,
shortens the timeline to production and allows us to significantly decrease the overall cost of the project. We also believe that
we will be able to extend the Wasamac mine life, as the deposit remains largely underexplored at depth and along strike.
"In the last few weeks, we have created a confidential virtual data room to provide access for those who have expressed an
interest in reviewing the data and participating in the project's development. We have since seen considerable interest from the
mining and investment community and are positive about the upside of these new results for Monarques."
"This feasibility study also leaves the door open to a potential custom milling option. Eliminating the cost of building a
mill and a tailings facility would reduce the initial CAPEX by about $230 million, which could
potentially increase the project's internal rate of return and decrease the payback period. Furthermore, the mine infrastructure
will be strategically located on our newly acquired land next to the Trans-Canada highway and 200 metres from the railway leading
to all the main regional custom milling facilities. We will study all possible options to put the Wasamac Gold project into
production in the best interests of our shareholders," concluded Mr. Lacoste.
FS HIGHLIGHTS
Description
|
Unit
|
Value
|
Long term gold price
|
US$/oz
|
1,300
|
Exchange rate
|
C$:US$
|
1.31
|
Total tonnes mined
|
M Tonnes
|
21.5
|
Average diluted gold grade
|
g/t
|
2.56
|
Average gold recovery rate
|
%
|
88.2
|
Total gold contained
|
koz
|
1,767
|
Total gold production
|
koz
|
1,558
|
Average annual gold production
|
oz per year
|
142,000
|
Mine life
|
year
|
11
|
Production cash costs
|
$/oz
|
720
|
Production cash costs
|
US$/oz
|
550
|
All-in sustaining costs (AISC)
|
$/oz
|
826
|
All-in sustaining costs (AISC)
|
US$/oz
|
630
|
Estimated capital expenditure
|
|
|
Total preproduction capital cost
|
$M
|
464
|
Sustaining capital
|
$M
|
175
|
Site restoration cost
|
$M
|
6
|
Salvage value
|
$M
|
(16)
|
Pre-tax summary
|
|
|
NPV (5%)
|
$M
|
522
|
IRR
|
%
|
23.6
|
Payback period
|
years
|
3.6
|
After-tax summary
|
|
|
NPV (5%)
|
$M
|
311
|
IRR
|
%
|
18.5
|
Payback period
|
years
|
3.9
|
SENSITIVITY ANALYSIS
The project's sensitivity to the price of gold shows that an increase of just 20% in the price of gold brings the pre-tax NPV
close to $900 million and the IRR above 30%. Concurrently, a drop in the price of gold of 20% would
keep the project comfortably above the break-even level of $925 and the IRR would still post a low
double-digit return.
Pre-tax NPV 5%
CAD:USD
|
Gold Price (US$/oz)
|
$1,000
|
$1,100
|
$1,200
|
$1,250
|
$1,300
|
$1,400
|
$1,500
|
$1,600
|
1.11
|
(109.2)
|
9.2
|
127.6
|
186.8
|
246.0
|
364.4
|
482.8
|
601.2
|
1.18
|
(39.6)
|
85.8
|
211.2
|
273.9
|
336.5
|
461.9
|
587.3
|
712.7
|
1.25
|
38.8
|
172.0
|
305.2
|
371.8
|
438.4
|
571.6
|
704.8
|
838.0
|
1.31
|
102.7
|
242.3
|
381.9
|
451.7
|
521.5
|
661.1
|
800.7
|
940.3
|
1.43
|
229.1
|
381.3
|
533.6
|
609.7
|
685.8
|
838.0
|
990.3
|
1,142.5
|
1.54
|
346.2
|
510.1
|
674.1
|
756.1
|
838.0
|
1,002.0
|
1,165.9
|
1,329.9
|
1.67
|
482.8
|
660.4
|
838.0
|
926.8
|
1,015.6
|
1,193.2
|
1,370.8
|
1,548.5
|
Pre-tax IRR
CAD:USD
|
Gold Price (US$/oz)
|
$1,000
|
$1,100
|
$1,200
|
$1,250
|
$1,300
|
$1,400
|
$1,500
|
$1,600
|
1.11
|
(0.2%)
|
5.4%
|
10.3%
|
12.5%
|
14.6%
|
18.6%
|
22.4%
|
25.9%
|
1.18
|
3.2%
|
8.6%
|
13.4%
|
15.6%
|
17.7%
|
21.7%
|
25.5%
|
29.1%
|
1.25
|
6.7%
|
11.9%
|
16.7%
|
18.9%
|
21.0%
|
25.1%
|
28.9%
|
32.5%
|
1.31
|
9.3%
|
14.5%
|
19.2%
|
21.4%
|
23.6%
|
27.7%
|
31.5%
|
35.2%
|
1.43
|
14.0%
|
19.2%
|
23.9%
|
26.2%
|
28.4%
|
32.5%
|
36.5%
|
40.3%
|
1.54
|
18.0%
|
23.2%
|
28.0%
|
30.3%
|
32.5%
|
36.8%
|
40.9%
|
44.8%
|
1.67
|
22.4%
|
27.6%
|
32.5%
|
34.9%
|
37.2%
|
41.6%
|
45.8%
|
49.8%
|
MINERAL RESOURCES
The mineral resources used as the basis for the FS study are summarized below.
Mineral Resource Statement – October 20, 2017
Resource Category
|
Tonnes (Mt)
|
Grade (g/t Au)
|
Contained Gold (oz)
|
Measured Resources
|
3.99
|
2.52
|
323,300
|
Indicated Resources
|
25.87
|
2.72
|
2,264,500
|
Total Measured + Indicated Resources
|
29.86
|
2.70
|
2,587,900
|
Inferred Resources
|
4.16
|
2.20
|
293,900
|
|
Notes:
|
1.
|
CIM (2014) definitions were followed for Mineral Resources.
|
2.
|
Mineral Resources are inclusive of Mineral Reserves.
|
3.
|
Mineral Resources are estimated at a cut-off grade of 1.0 g/t
Au.
|
4.
|
Mineral Resources are estimated using a gold price of US$1,500 per ounce,
and exchange rate of US$0.80 = C$1.00.
|
5.
|
A minimum mining width of four metres was used.
|
6.
|
A bulk density of 2.8 g/cm3 was used.
|
7.
|
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
|
8.
|
Numbers may not add due to rounding.
|
MINERAL RESERVES
Mineral reserves were classified complying with the CIM definition standards for mineral resources and mineral reserves.
Mineral reserves for the Wasamac deposit incorporate dilution and mining recovery factors based on the selected mining method and
design. Mineral reserve is the estimated tonnage and grade of ore that is considered economically viable for extraction.
The mineral reserve estimate for the Wasamac deposit is based on the resource block model provided by RPA to Monarques in
2017, along with the information in the Preliminary Economic Assessment study conducted by RPA in 2012 for the previous mine
owner, Richmont Mines Inc.
The price of gold is determined to be US$1,300/oz. The trailing average exchange rate of
1.31 C$/US$ is used in cut-off grade determination.
Mineral reserves were estimated from the resource block model provided from RPA, using software-generated optimized stopes
based on an estimated 1.0 g/t cut-off grade.
Mineral Reserve Statement by Category – December 1,
2018
|
Tonnes
(000 t)
|
Grade
(g/t Au)
|
Contained Gold
(000 oz)
|
Proven
|
1,028
|
2.66
|
88
|
Probable
|
20,427
|
2.56
|
1,679
|
Total Proven and Probable
|
21,455
|
2.56
|
1,767
|
CAPITAL AND OPERATING COSTS SUMMARY
Project capital cost summary
Cost description
|
Pre-production
capital cost ($M)
|
Sustaining
capital cost ($M)
|
Total cost ($M)
|
General administration (owner's costs)
|
9.7
|
0.0
|
9.7
|
Underground mine
|
137.6
|
170.5
|
308.1
|
Surface infrastructure
|
50.7
|
(5.3)
|
45.4
|
Filter press plant
|
39.1
|
0.0
|
39.1
|
Process plant
|
131.8
|
0.0
|
131.8
|
Tailings and water management
|
21.2
|
1.5
|
22.6
|
Indirect
|
42.6
|
0.0
|
42.6
|
Contingency
|
31.2
|
7.9
|
39.1
|
Total
|
464.0
|
174.5
|
638.5
|
Site reclamation and closure
|
0.0
|
6.1
|
6.1
|
Salvage value
|
0.0
|
(15.8)
|
(15.8)
|
Total - forecast to spend
|
464.0
|
164.8
|
628.8
|
Project operating cost summary
Cost description
|
LOM
($M)
|
Annual average
cost ($M)
|
Average LOM
($/tonne milled)
|
Average LOM
($/oz)
|
OPEX
(%)
|
Underground mining
|
573.2
|
52.1
|
26.72
|
368.15
|
53
|
Process plant
|
381.7
|
34.7
|
17.79
|
245.18
|
35
|
Tailings and water management
|
47.2
|
4.3
|
2.20
|
30.33
|
4
|
General & administration
|
75.8
|
6.9
|
3.53
|
48.66
|
7
|
Total
|
1,077.9
|
98.0
|
50.24
|
692.31
|
100
|
OPPORTUNITIES FOR IMPROVEMENT
There are significant opportunities that could improve the economics and the timetable of the Wasamac project. The major
opportunities identified at this time are summarized in Table 25-4 of the FS. Further information and assessments are needed
prior to including these opportunities in the economic evaluation of the project.
ESTIMATED SCHEDULE AND WORKFORCE REQUIREMENTS
Pending the completion of all studies and receipt of the required permits and financing, the process plant construction is
scheduled to begin in Q4 2020 with full capacity production achieved by Q4 2022.
The preliminary on-site workforce requirement for construction, including infrastructure, process plant, and development of
the underground mine is expected to average 250 construction personnel, peaking at approximately 420 individuals in Q3 2021. It
is anticipated that around 300 employees (staff and labour, peaking at 319 in year 2024) will be required for the operations over
the life of mine.
INDEPENDENT QUALIFIED PERSONS
The FS was prepared for Monarques under the direction of BBA, by leading independent industry consultants, all of whom are
qualified persons ("QP") under National Instrument 43-101. The QPs have reviewed and approved the content of this news release.
Independent QPs from BBA and RPA who have prepared or supervised the preparation of the technical information relating to the FS
include:
- Carl Caumartin, P.Eng., BBA Inc.
- Alain Dorval, P.Eng., BBA Inc.
- John Henning, P.Eng., BBA Inc.
- Richard Jundis, P.Eng., BBA Inc.
- Luciano Piciacchia, P.Eng., BBA Inc.
- Tudorel Ciuculescu, M.Sc., P.Geo., Roscoe Postle Associates Inc.
The technical and scientific content of this press release has been reviewed and approved by Marc-André Lavergne, P.Eng., the
Corporation's qualified person under National Instrument 43?101.
ABOUT MONARQUES GOLD CORPORATION
Monarques Gold Corporation (TSX: MQR) is an emerging gold mining company focused on pursuing growth through its large
portfolio of high-quality projects in the Abitibi mining camp in Quebec, Canada. The Corporation
currently owns close to 300 km² of gold properties (see map), including
the Wasamac deposit (measured and indicated resource of 2.6 million ounces of gold), the Beaufor Mine, the Croinor Gold (see
video), McKenzie Break
and Swanson advanced projects and the Camflo and Beacon mills, as well as other promising
exploration projects. It also offers custom milling services out of its 1,600 tonne-per-day Camflo mill.
Forward-Looking Statements
The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors
that may cause Monarques' actual results, performance and achievements to be materially different from the results, performance
or achievements expressed or implied therein. Neither TSX nor its Regulation Services Provider (as that term is defined in the
policies of the TSX accepts responsibility for the adequacy or accuracy of this press release.
View original content to download multimedia:http://www.prnewswire.com/news-releases/monarques-golds-wasamac-feasibility-study-shows-positive-pre-tax-23-6-irr-and-production-cash-costs-of-720-per-ounce-us550-per-ounce-300758581.html
SOURCE Monarques Gold Corporation
View original content to download multimedia: http://www.newswire.ca/en/releases/archive/December2018/03/c7034.html