Compagnie Miniere Esperance

Compagnie Miniere Esperance

January 14, 2016 09:01 ET

Compagnie Miniere Esperance Announces Positive PEA Results on Esperance Gold Mine Concession; Production of 169,000 Oz/yr and AISC of US$786/Oz

CAYENNE, FRENCH GUIANA--(Marketwired - Jan. 14, 2016) - La Compagnie Miniere Esperance ("CME" or the "Company") is pleased to announce the results of the NI 43-101 Preliminary Economic Assessment (PEA) at the Esperance Gold Mine Concession, French Guiana, conducted by GoldMinds Geoservices Inc.(Canada).

Esperance PEA Highlights (*)

  • After-tax NPV (at 6%) of US$200.8 Million at a gold price of US$1085 per ounce
  • After-tax IRR of 22% at a gold price of US$1085 per ounce
  • After-tax NPV (at 6%) of US$336.7 Million at a gold price of US$1200 per ounce
  • After-tax IRR of 30% at a gold price of US$1200 per ounce
  • Initial Capital Cost of US$250M, including US$42M contingency
  • After-tax Payback of 3.6 years with gold price of 1080US$
  • All-in Sustaining Costs (AISC) of US$786/Oz
  • Life of Mine (LOM) Production of 2.7 million ounces of Gold over 16 years
  • Average Annual Gold Production of 169,000 Oz
  • Milling Capacity of 10,000 tonnes per day, with an average grade of 1.68 g/t over the life of the mine including the first 3 years at 2.08g/t with mill recovery of 95%.
  • Stripping ratio of 4.78 to 1

Carol Ostorero, CEO of Compagnie Minière Espérance, and her brothers stated: "The completion of this positive PEA according to NI 43-101 regulations is an important step for the company. Our continuous efforts over the years have come to fruition. We at CME always knew we had an important gold project in our hands. The fact that this deposit is located on a concession, ready to be mined and with significant potential for expansion, makes it a highly attractive project."

The study

The actual Esperance Gold Mine could potentially support an open pit mine with conventional process units that are standard to the mining-milling industry, including: crushing, grinding, gravity concentration,cyanide leaching, activated carbon gold adsorption, carbon desorption, electrowinning, refining and carbon reactivation with cyanide destruction for the tails of the CIL circuit. The processing plant, with an annual capacity of 3.6 Mtpy rated at 3.3Mtpy for the PEA. The Gold recovery of the mill is anticipated to exceed 95%. No provision has been made to process the existing tailings of the historical 10 years of operation by gravity. The corporate tax rate on profit used in this PEA is 33.33%.

The actual scenario utilizes power supply from on-site generation at a cost of US$0.21/kWh. The average Ball Mill Work Index of 16.6 kWh/t is used as mineralized material is from fresh rock as well as Saprolite since mineralized fresh rock is readily accessible at Esperance.

Technical Summary
Life of Mine 16 years
In-pit Resources 52.8Mt
Average Gold grade 1.68 g/t
Strip Ratio 4.78:1
Process tonnage per year 3.3Mt
LOM Average Annual Production 169,000 Oz
Total Payable Gold Produced 2.709 Million Oz
Capital Costs US$M
Pre-stripping 0
Processing Plant 155.2
Tailings Pond 1 5.0
Infrastructure 35.525
Owners Cost 12.675
Contingency 41.68
Total Initial Capital Cost 250.08
Operating Costs (by tonne processed) US$/tonne
Mining Cost 15.91
Environmental cost 1.00
Water management 0.30
Exploration (resource renewal) 0.20
Camp & transport 0.30
Waste rock valuation 0.20
Tailing Dam Reinforcement 0.35
General & Administration fees 3.17
After-tax Financial Results at $1,085/Oz Price of Gold (US$)
NPV at 6% $200.8M
IRR 22 %
AISC $786/Oz
Payback Period From Start of Production 3.6 years
Free Cash Flow $365.7M
Tax rate applied 33.33 %
After-tax Financial Results at $1,200/Oz Price of Gold (US$)
NPV at 6% $336.7M
IRR 30 %
Payback Period From Start of Production 2.8 years
Free Cash Flow $573.3M

The in-pit resources all categories stand at 52.8Mt @ 1.68 g/t. The in-pit resources are derived from the Total mineral resource estimation using model blocks size 05 E x 05 N x 05 Z (Hard rock with density of 2.73 and saprolite Blocks with density of 1.61 t/m3 - rounded numbers - Capping of 30 g/t with Cut-off grade above 0.5 g/t)

Resource Classification Au Volume Tonnes Ounces
Measured_Hard Rock 1,60 3 459 250 9 443 000 484 600
Measured_Saprolite 1,38 150 125 241 000 10 700
Total Measured_Hard Rock & saprolite 1,59 3 609 375 9 684 000 495 300
Indicated_Hard Rock 1,48 6 616 500 18 063 000 859 500
Indicated_Saprolite 1,30 473 625 762 000 31 900
Total Indicated_Hard Rock & saprolite 1,47 7 090 125 18 825 000 891 400
Total Measured + Indicated_Hard Rock & saprolite 1,51 10 699 500 28 511 000 1 386 800
Inferred_Hard Rock 1,22 23 645 000 64 550 000 2 540 600
Inferred_Saprolite 1,02 1 935 000 3 115 000 102 300
Total Inferred_Hard Rock & saprolite 1,24 25 580 000 67 665 000 2 642 900
Esperance Total Mineral Resource Estimates January 16th 2016

(*) NI 43-101 Cautionary Statement: Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The PEA is preliminary in nature and 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. There is no certainty that the conclusions reached in the PEA will be realized.

The technical content of this press release was prepared and reviewed by Claude Duplessis P Eng. geological engineer GoldMinds Geoservices Inc., an Independent Qualified Person as defined in NI 43-101 standards.

The technical report will be made available to groups having signed the Confidentiality Agreement once available. Other interested parties may contact us to have access to the Technical Report.

About CME

CME is a private Guyanese company owner of two mining sites:

  • ESPERANCE in the town of Apatou
  • SAINT ELIE in the town of Saint Elie; the mining title is held by SMSE (Societe des Mines de Saint Elie) 100% subsidiary of CME. This concession was acquired from Golden Star.

For more information on CME visit: www.esperancegoldmine.com/

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