Bralorne Gold Mines Ltd.

Bralorne Gold Mines Ltd.

October 17, 2012 09:00 ET

PEA Demonstrates a NPV of $6.4 Million for the Bralorne Operation, and the Potential for a NPV of $29.7 Million and an IRR of 50.43% if Increased to 250 TPD

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 17, 2012) - Bralorne Gold Mines Ltd. (TSX VENTURE:BPM)(OTCQX:BPMSF)(FRANKFURT:GV7)("Bralorne or the Company") announces positive results of a Preliminary Economic Assessment of its Bralorne project located near Gold Bridge, British Columbia, where the Company is exploring and developing its gold mining operation.

Beacon Hill Consultants (1988) Ltd. (Beacon Hill) has completed a National Instrument 43-101 Preliminary Economic Assessment (PEA) of the current Bralorne operation and devised a plan to expand production of the mine from the present 85tpd to 250tpd. The study team included staff and associates of Beacon Hill Consultants (1988) Ltd., W. P. Stokes, P.Eng., Mr. G. Kirkham, P.Geo., Mr. F. Wright, P.Eng., and personnel from EBA Environmental Consultants Ltd., Mr. S. Martin, P.Eng, SGS Canada Inc., Mr. P. Bhatia, P.Eng., and Kaehne and Associates, Mr. J. Kaehne.

Since 2007, the Company has concentrated on exploration, drifting, raising, rehabilitation and purchase of equipment. These exploration activities continued to locate mineralized zones and development was done to define an inventory of measured and indicated resources on which a mine plan can be formulated. As a result measured and indicated resources have been delineated totaling 154,750 tonnes grading 9.11 g/tAu (0.266 ozAu/t) and in addition 246,835 tonnes grading 8.78 gAu/t (0.256 ozAu/t) classified as inferred resources.

Present Operations

The Bralorne mine was placed back into operation in April 2011 and has been operating at a nominal rate of 85 tpd since that time on which the PEA evaluation has been completed using a mine life of 4.3 years. Based on present known measured and indicated resources the mine has a life of some five to six years and potentially 14 years if inferred resources are included. Based on this plan the PEA shows that the Company's present operations is estimated to have a positive net present value discounted at 5% of $6.4 million using gold prices of US$1650/oz for 2012 and US$1500/oz for succeeding years, thus providing an acceptable return on investment.

Postulated Case of Increasing Operations to 250 tpd, with the increase in production beginning in fiscal 2015

In order to assess the potential of expanding operations a plan was developed to increase production from 85 tpd to 250 tpd operation. This plan will require additional resources to be delineated above that required for the current operations from exploration activities below the 800 level down to 1000 level. In the economic analysis, a resource equivalent to that currently described above the 800 level is assumed to be available from 800 level to 1000 level. Preliminary estimates have been made for both the capital and operating costs based upon this plan and an economic analysis completed for the increased 250tpd scenario. This case is designated as a postulated due to the fact that sufficient resources have not yet been delineated and the plan is speculative in nature.

The postulated case will be subject to an initial capital expenditure of $17.6 million and preliminary schedules indicate that an increase in production could be achieved in year 2015. The overall production schedule covers a 10 year mine life. The mining grade used reflects the average of that produced to date since operations commenced in 2011. Ongoing capital has been estimated at $10.6 million with average operating costs $223.77/ton mined, equivalent to $932.28/oz gold. The PEA economic analysis for this case shows that the Company is expected to have a positive net present value discounted at 5% of $29.8 million with an IRR of 50.43% based on gold prices of US$1650/oz for 2012 and US$1500/oz for succeeding years.

It is concluded that if the mine is further developed and a mining rate of 250tpd is achieved at a mining grade equal or better than presently processed, considerable improvements will occur to the economic viability of the project.

Executive Statement

"This analysis shows that the present operation is economical and validates the recent efforts of the Company to build a new gold mine; it also indicates the upside potential economic benefit of expanding the operation. Although sufficient resources for expansion have not been fully defined yet, the Company strongly believes that on-going exploration and development at the property will produce the required results. The Company is also pursuing ways to improve the current operation recovery and throughput with minimal capital infusion through minor modifications in the mill," commented Company President and COO, Dr. Matt Ball.

Cautionary Statement

It should be clearly understood that;

  • Due to the uncertainty that may be attached to an inferred mineral resource, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured resource as a result of continued exploration.
  • No resources have been delineated below 800L and there is no guarantee that any resources will be found and that an exploration program is required to define those resources should they exist. However, in the authors' opinion (Beacon Hill) there is the potential for additional resources to be delineated below 800L at the Bralorne mine since historical information clearly indicates the potential for such resources to exist. However, there is no certainty that additional resources are in fact below this level and anyone reading this report should assume that there may be no viable resources below 800L until such time as they have been proven and verified.

For a full review of the 2012 Preliminary Economic Assessment on the Bralorne Gold Mines Property please click this link below: Hill 2012.pdf

For more information, please visit our website at:


William Kocken, Chief Executive Officer

This release contains statements that are forward-looking statements and are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

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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