Auriga Gold Corp.
TSX VENTURE : AIA

Auriga Gold Corp.

February 22, 2012 13:21 ET

Auriga Gold Files Puffy Lake Mine PEA to SEDAR; Drilling at Nokomis, Maverick Gold Project

TORONTO, ONTARIO--(Marketwire - Feb. 22, 2012) - Auriga Gold Corp. (TSX VENTURE:AIA) ("Auriga Gold" or the "Company") today filed its updated Preliminary Economic Assessment ("PEA") report on the Combined Open Pit and Underground Operation at the Puffy Lake Mine, Maverick Gold Project, Flin Flon, Manitoba, to SEDAR (www.sedar.com) and to the Auriga Gold website (www.aurigagold.ca).

Highlights of the PEA:

  • A total of approximately 2,039,000 tonnes of mill feed would be produced from five open pits and the underground mine and processed at the to-be-refurbished existing mill at a rate of 750 tpd. The project would operate for 7.5 years and produce a total of about 348,000 oz Au for sale. The existing mill and infrastructure would be refurbished concurrently with the development of the initial open pit.
  • The Base Case is based on a gold price of US$1,400/Au oz (at Dec 31/11 the 12 and 24 month trailing averages were US$1,568/oz and US$1,396/oz respectively). The projected pre-tax NPV(8%) is $79.6M; pre-tax IRR is 84%; with pre-tax payback reached in 20 months of processing. It is projected that 50,000 tonnes of mill feed would be processed during mill ramp-up in the pre-production year.
  • The capital costs amount to $18.1M and include a 20% capital cost contingency. The projected life of mine sustaining capital costs including closure costs amount to $26.6M.
  • The projected average production cash cost is $950/oz Au. This cost includes $873/oz Au for operating costs and $77/oz Au for sustaining capital costs.

Richard Sutcliffe, Auriga Gold's President and CEO commented, "We are pleased to have the PEA report completed and filed, as we continue to drive our Maverick Gold Project forward. With the existing 1,000 tpd mill and related on-site infrastructure, this Project provides an opportunity to resume production at a rate of approximately 40,000 ounces per year, with relatively low capital requirements and robust economics."

In addition, the company is now drilling the Nokomis deposit located 8 km northeast of the Puffy Lake mine and mill on the Maverick Gold property. It is our intention to continue expanding the gold resources on the Maverick Project with particular emphasis on potential near surface mineralization.

Technical information related to the updated PEA contained in this news release has been reviewed and approved by David Orava, M.Eng., P.Eng., Associate Mining Engineer with A.C.A. Howe International Limited, who is an independent Qualified Person as defined by NI 43-101, with the ability and authority to verify the authenticity and validity of this data.

The updated PEA makes use of Inferred Mineral Resources which is considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources which are not mineral reserves do not have demonstrated economic viability.

About Auriga Gold

Auriga Gold Corp. is a Canadian mine development and exploration company focused on developing the Puffy Lake Mine and expanding gold resources on its Puffy Lake and Nokomis deposits (the "Maverick Gold Project"). The Company plans to upgrade and expand the resources at the Maverick Gold Project, initiate test mining, complete feasibility studies of mineral reserves, and bring the Puffy Lake Mine back into production. The Puffy Lake Mine includes a 1,000 tpd flotation mill, a developed underground ramp to 135 metres depth, is fully road accessible and close to existing mining infrastructure. The Maverick Gold Project is located in the Flin Flon Greenstone Belt of Central Manitoba.

Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks associated with mining exploration and development, volatility of prices, currency fluctuations, imprecision of resource estimates, environmental and permitting risks, access to labour and services, competition from other companies and ability to access sufficient capital. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. A feasibility study has not been completed and there is no certainty the disclosed targets will be achieved nor that the proposed operations will be economically viable. This press release is not and is not to be construed as an offer to buy or sell securities in the United States.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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