Nordgold Announces Positive Bankable Feasibility Study for Montagne d’Or Project in French Guiana
London, United Kingdom, 23 March 2017 - Nord Gold SE (“Nordgold” or the “Company”), an internationally diversified gold producer, is pleased to announce the results of the independent Bankable Feasibility Study (“BFS”) prepared in accordance with National Instrument 43-101 for the Montagne d’Or Gold project ("Montagne d’Or" or the "Project") located in French Guiana.
- After-tax Net Present Value of US$370 million (at a 5% discount rate)
- After-tax IRR of 19% at a gold price of US$1,250 per ounce (“oz”).
- Proven and Probable Mineral Reserves of 2.7 million ounces (“Moz”) of gold (54.1 million tonnes at 1.58 g/t gold) (1).
- Measured and Indicated Mineral Resources of 3.9 Moz of gold (85.1 million tonnes at 1.41 g/t gold) (2).
- Inferred Resources located within the pit shell of 960,000 oz of gold (20.2 million tonnes at 1.5 g/t gold) (3).
- Average annual production of 237 thousand ounces (“koz”) in first ten years at an average grade of 1.73 g/t gold with an average all-in sustaining costs (“AISC”) of US$749/oz.
- Life of mine ("LOM") production of approximately 2.57 Moz of gold; 214 koz per year, over a 12-year mine life, using an average overall gold recovery of 93.8% that results in an average LOM AISC of US$779/oz.
- Total net initial capital costs (including pre-stripping and contingency, less surplus tax credit refunds) of US$361 million (please see below table for capex breakdown).
- After-tax Payback Period of 4.1 years, and LOM sustaining capital costs of US$231 million. LOM contingency rate of 9.5% is included in the estimate.
- Estimated employment during the peak of construction of 900 jobs, and the creation of 658 permanent direct jobs, not counting service providers’ personnel working exclusively for the Project, and up to an estimated 3,000 indirect jobs during operation. Most of the mine personnel will be employed from within French Guiana.
Nikolai Zelenski, Chief Executive Officer, Nordgold commented:
The Montagne d’Or is world class high grade ore body and the work we have now completed show a project with robust economics. It meets our criteria for project development as it benefits from straight forward metallurgy, excellent recovery rates and moderate stripping ratio. The mine will be a major employer in the region and generate significant revenues for the country when fully operational. Montagne d’Or is a core part of our long term growth pipeline and we look forward to progressing through the permitting process.
Nordgold and Columbus (“Partners”) believe the following improvements to the Project can be made:
- Certain capital costs can be optimised, subject to sourcing improved budget quotations from suppliers.
- Infill drilling has the potential to convert some of the Inferred ounces to higher resource classification. Partners are considering undertaking 4,300 meters (“m”) of infill drilling, at an estimated cost of US$1.5 million. The drilling is being assessed for commencement in Q2 2017 subject to obtaining the required drilling permits.
- There is a potential to lower the CoG used for reserves if gold prices increase, and with optimisation of operating costs used in the CoG calculations. This has the potential to convert some additional Measured and Indicated Resources within the current designed pit into Proven and Probable Reserves.
- Columbus is looking into opportunities to refine the pit designs which could have the potential to increase reserves.
- On February 13, 2017, Columbus announced commencement of an exploration drilling programmes at Montagne d’Or. The programmes consists of 36 core holes, for a total of 5,520 m, designed as a first pass investigation of exploration targets on strike of, and in very close proximity of the currently defined reserves. Four targets will be tested: 1) four widely-spaced drill hole fences will test the west strike extent of the deposit up 1.25 kilometers west of the current resource; 2) the Gustave geochemical anomaly located 500 m east of the Montagne d’Or deposit where a historical drill hole intersected 3.5 m of 31.94 g/t; 3) potential mesothermal quartz-gold vein systems within 1,000 m north of the deposit; and, 4) one hole under the deposit to test the down-dip extent of the principal mineralized zones.
- (1) Proven and Probable Reserves were estimated using a US$1,200/oz gold price at varied cut-offs (“CoG”) dependent on lithological rock types, economics and estimated metallurgical recovery. Felsic Tuffs have CoG of 0.617 g/t Au, Granodiorites have a CoG of 0.622 g/t Au, Mafics have a CoG of 0.665 g/t Au, Saprolite and Saprock have a Cog of 0.552 g/t Au.)
- (2) Mineral Resources were estimated within pit shell that is defined by an US$1,300/oz price and CoG of 0.4 g/t Au.
- (3) Inferred Resources were estimated using a US$1,300/oz price and CoG of 0.4 g/t Au.