George Salamis, President of Rusoro Mining Ltd. ("Rusoro" the "Company") (TSX
VENTURE:RML) is pleased to provide an overview of the results of a recently
completed Preliminary Assessment (the "PA" or "the Study"). The PA, also known
in the mining industry as a Scoping Study, conducted by Micon International
Limited ("Micon") has examined a number of different gold production expansion
scenarios sourcing gold resources and reserves from the Choco 10 mine (95%
owned) and the near-by Increible 6 (100% owned) gold deposit.
The objective of the study was to evaluate the potential for expansion of the
project. In order to do this, the cash flow of the unexpanded (5,000 t/d) base
case and each of three expansion options has been forecast, enabling a
comparison to be made of the NPV of each option versus the base case. The gold
processing parameters studied the construction of a new 10,000 t/d mill and two
alternative 20,000 t/d mill cases: one involving a completely new mill and one
studying the achievement of 20,000 t/d milling capacity using a combination of
existing Choco 10 processing capacity run in parallel with newly constructed
milling facilities on the same site. Results in this press release are presented
for the optimal case (Case 2) which is comprised of the existing facility at
5,000 t/d plus an additional 15,000 t/d of new capacity.
The mining scenarios envisaged in the study, examined both owner-operated mine
haulage fleets and contract mining operations, with both aimed at open pit
mining on the extensive resources on both concessions. Open pit shell
optimizations used in the mine scheduling of estimated resources to be mined at
both projects used a gold price of $US 700/oz.
In summary, the results of the PA are highly encouraging and Rusoro remains
committed to bringing the project to feasibility by Q2, 2010. The Study shows
that over the first three years of production, an expanded Choco 10 Milling
Complex will average 545,500 oz Au/yr from 7,300,000 t/yr treated at an average
head grade of 2.58 g/t Au, with cash costs averaging $US 331/oz over the
life-of-mine (LOM).
Highlights and Conclusions
The following highlights are taken from Case 2 of the PA comprised of the
existing 5,000t/d processing facility plus an additional 15,000 t/d of new
capacity.
- Potential to increase existing steady-state production at Choco 10 to over
500,000 oz/yr over a 12 year mine life.
- The most robust financial outcome of the PA is derived from combining existing
hard-rock milling capacity at Choco 10 with a new 15,000 t/d mill construction,
for a total capacity 20,000 t/d.
- Contract mining generates better financial returns versus owner-operated mine
fleet arrangements in the PA.
- Gold production at the expanded mine and mill facility is forecasted to reach
a maximum of over 717,300 oz in Year 10, with an average rate of 558,200 oz/yr,
post expansion.
- LOM cash cost estimate is $US 331/oz.
- Expansion capital requirements estimated at $US 208.5 million plus
contingencies of $US 30.8 million and sustaining capital of $US 80.3 million
over the life of mine (12 years).
- Life-of-mine net revenue of $US 3.57 billion using $US 700 Au. Average annual
after-tax cash flow of $US 77 million at $US 700/oz Au,
- Payback, post commissioning of the expanded plant, is estimated at 2.1 years
(discounted at 8%), on a total mine-life of over 12 years.
- At a gold price of $US 700/oz, the PA estimates the NPV (8%) to be $US 449.7
million and after-tax IRR of 51.7%. Using a gold price of $US 850/oz, the
project generates an NPV (8%) of $US 741.9 million and an after-tax IRR of
120.7%.
- Upside: The table below shows the project sensitivities and upside of the
expansion to higher gold prices.
Economic Sensitivity to Gold Price(i)
-------------------------------------
-------------------------------------
Au Price NPV8 IRR
-------------------------------------
-------------------------------------
450 (58,555) 3.7
500 50,624 12.0
550 154,075 20.8
600 254,075 20.8
650 352,208 40.1
700 449,768 51.7
750 547,318 66.3
800 644,646 86.3
850 741,975 120.7
900 839,304 N/A
950 936,633 N/A
-------------------------------------
-------------------------------------
(i) In the PA the forecast gold price
is quoted net of applicable taxes.
Preliminary Assessment - Summary
In May 2008, Rusoro commissioned Micon to provide an independently generated
Preliminary Assessment, also commonly referred to as a Scoping Study, for the
Choco 10 (95% owned) and Increible 6 (100% owned) gold deposits, situated in the
El Callao District of Bolivar State, Venezuela. Rusoro purchased the Choco 10
mine from Gold Fields Ltd in November 2007, on the basis that production at the
active gold mine could be substantially expanded due to the size and
distribution of the gold resources underlying the concession. Also at the time
of purchase, the Company's view of the production expansion potential of the
Choco 10 mining and milling complex was further enhanced by the synergies borne
from the proximal location of its 100% owned Increible 6 gold project, situated
only 8 km from the Choco 10 mill.
In the PA, the Choco 10 and Increible 6 deposits were designed as open-pit
operations with a construction phase of approximately 2 years. With the current
resource base of the two projects, the anticipated life of the expanded mine is
12 years with an optimal mill throughput shown to be 20,000 tonnes per day. Gold
production averages 558,200 oz/yr, post expansion with an average total cash
cost of $US 331/oz.
Power and water services are readily available on site, as are roads and mine
site infrastructure.
Capital expenditures are estimated at $US 208.5 million including EPCM costs,
plus $US 80.3 million of sustaining capital injected over the life of the mine,
plus contingencies of $US 30.8 million, giving the project a capital expenditure
per recoverable ounce of gold of $US 55.65.
Mineral resources that are not mineral reserves do not have demonstrated
economic viability. The preliminary assessment is preliminary in nature, and
includes inferred mineral resources that are considered too speculative
geologically to have economic considerations applied to them that would enable
them to be categorized as mineral reserves, and there is no certainty that the
preliminary assessment will be realized.
Mining and Mineral Processing
Feedstock for the expanded mill will be provided by mined output from the
existing Choco 10 operation (comprising the presently operating Rosika, Coacia
and Pisolita open pits) and planned mine production from the Villa
Balazo-Karolina (VBK) pit at Choco 10 and from the Increible 6 concession which
is located 4 km northeast of Choco 10 and from the small Capia and Cerro Azul
deposits.
The stripping ratio is estimated at 5.73 to 1 over the life of mine, with pit
designs modeled at 40 degrees in saprolite and 47 degrees in hard-rock.
Mining costs for waste rock and mill feed have been estimated at an average of
$2.48/t mined, under the contract mining scenario.
The study envisages that the Choco 10-Increible 6 ores will be processed by
conventional means, consisting of primary crushing, two-stage milling, cyanide
leaching, carbon adsorption and elution, electro-winning and gold smelting. The
plant design is a conventional cyanidation and carbon in pulp plant with a
nominal throughput capacity of 20,000 t/d (7.3 Mt/yr) based on a 90 to 92% plant
availability, depending on ore type. Total gold recovery is expected to average
90% based on an average head grade of 2.72 g/t Au over the life of the mine for
design criteria. It should be noted that the study envisages the using the same
processing methodology, on an expanded basis, as is currently conducted at the
Choco 10 site.
The mineral processing costs for the 20,000 t/d case, including tailings
operations and power, are estimated at $US 4.34/t milled.
General and Administrative Operating costs are estimated to be $US 2.67/t, for
the Case 2 20,000 t/d case.
Study Parameters
The objective of the study was to evaluate the potential for expansion of the
project. In order to do this, the cash flow of the unexpanded (5,000 t/d) base
case and each of three expansion options has been forecast, enabling a
comparison to be made of the NPV of each option versus the base case.
The expansion options considered have total plant throughputs of 10,000 t/d and
20,000 t/d, as follows:
- Case 1: A new plant operating at 10,000 t/d
- Case 2: The existing plant (5,000 t/d) plus a new plant at 15,000 t/d, for a
total of 20,000 t/d
- Case 3: A new plant with two new lines at 10,000 t/d each, for a total of
20,000 t/d.
The analysis has been undertaken in United States constant dollars of January
2009 value, i.e., without provision for inflation.
The PA base case valuation assumes a constant gold price of $US 700/oz over the
full project life. Capital and operating costs have been estimated at an overall
accuracy of +30%, which is considered appropriate for preliminary assessment of
a mining project of this nature. As part of its sensitivity analysis, Micon
tested a range of prices and costs 30% above and below the base case values.
The table below show a summary of the life-of-mine (LOM) cash flow projections
and economic results for each of the production rate scenarios considered in the
study.
LOM Cash Flow Projections ($ millions) - Using $US 700/oz gold
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Item Base Case 2
Case Case 1 5,000 Case 3
5,000 10,000 +15,000 2x10,000
t/d t/d t/d t/d
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Net Sales Revenue 2,930.6 3,564.9 3,564.7 3,564.7
---------------------------------------------------------------------------
Total Cash Operating Costs 1,763.9 1,990.5 1,829.0 1,829.0
---------------------------------------------------------------------------
EBITDA 1,166.7 1,574.4 1,735.7 1,735.7
---------------------------------------------------------------------------
Total Capital Expenditure 93.8 305.3 307.5 362.4
Initial 42.5 184.9 208.4 251.3
Contingency 2.9 27.5 30.8 39.5
Sustaining 60.5 105.0 80.3 83.7
Working Cap. Movement (12.0) (12.0) (12.0) (12.0)
---------------------------------------------------------------------------
Taxation Payable 361.2 431.5 485.7 467.1
---------------------------------------------------------------------------
Net Cash Flow after Tax 711.7 837.6 942.5 906.2
---------------------------------------------------------------------------
NPV 215.1 264.8 449.8 417.1
---------------------------------------------------------------------------
IRR N/A 34% 52% 41%
---------------------------------------------------------------------------
LOM (years) 27.0 21.0 12.0 12.0
---------------------------------------------------------------------------
Payback Period (years, undisc.) N/A 1.8 1.7 2.4
---------------------------------------------------------------------------
Payback period (years, disc at 8%) N/A 2.2 2.1 2.9
---------------------------------------------------------------------------
Operating Cost ($/t) 37.7 28.3 26.0 26.0
---------------------------------------------------------------------------
Operating Cost ($/oz) 388.5 360.2 331.0 331.0
---------------------------------------------------------------------------
Profitability Index 4.7 1.2 1.9 1.4
---------------------------------------------------------------------------
For Case 2, LOM average cash operating costs are estimated at $US 26.00/t milled
or $US 331/oz of gold produced. For Case 2, at a discount rate of 8%/yr, the NPV
(NPV8) of project cash flows is $US 450 million over a mine life of 12 years.
The undiscounted payback period for invested capital is 1.7 years. Case 2 was
selected as the case for presentation in this press release.
The following Figure shows the main elements of the LOM cash flow for the
expansion to 20,000 t/d under Case 2.
To view this Figure, please click on the following link:
http://media3.marketwire.com/docs/rml519a.jpg
Study Sensitivity and Upside to Gold Price Above $US 700/oz
The results of sensitivity analysis at a discount rate of 8% per year are
summarized in the table below. Sensitivity to gold price is also presented in
the following Figure, showing the NPV8 and IRR for Case 2 over a range of $US
250/oz above and below the base case forecast of $US 700/oz. Generally speaking,
the project shows the most sensitivity to gold price, with lower sensitivities
shown to operating costs and CAPEX.
To view the Figure discussed in the above paragraph, please click on the
following link: http://media3.marketwire.com/docs/rml519b.jpg
"Simply put, this is the reason why Rusoro purchased the Choco 10 mine; not for
what it produces today - on average 120,000 oz/yr - but for what we think it can
produce in the near future, over half a million ounces per year. The expansion
project benefits from immense synergies resulting from the existing
"brown-fields" infrastructure at the mine site, given that the Choco 10 mine
itself has been in existence for over 4 years. This study further underscores
our view of the immense value to be unlocked from our world-class gold deposits,
Choco 10 and Increible 6", stated George Salamis, President, adding "We will
continue to strive toward our goal of making Rusoro the next intermediate gold
producer on an international scale".
Andre Agapov, CEO of Rusoro, commented "There are surprisingly few gold projects
remaining in the world today showing the qualities highlighted in the PEA:
significant annual gold production, lower quartile on operating costs and a
relatively long mine life. The production levels estimated in this study, would
place the expanded Choco 10 - Increible 6 in a category within the top 25 gold
producing mines, worldwide. Rusoro, being the only foreign mining Company who
has thus far demonstrated an ability to produce gold in Venezuela, on a large
scale, has the means and management to successfully develop such a mine on a
grand scale."
Future Studies and Development
The Company is working to complete a Definitive Feasibility Study and the
Environmental Impact Assessment by Q2, 2010. Additional infill drilling for the
Choco 10 and Increible 6 gold deposits is scheduled to begin in the next few
months. Updated measured and indicated resource estimates for both Choco 10 and
Increible 6 are to be released before the end of Q4, 2009. Subsequently upon
final pit design, mineral reserve estimates will be completed as part of a
Definitive Feasibility Study.
George Salamis, President stated: "We have an aggressive plan to move the Choco
10 expansion to production by the end of 2012. During the next nine months we
will be focused on completing the Definitive Feasibility Study, optimizing the
capital program and will be seeking the necessary permits for this four fold
production expansion."
Detailed Report
Within the next 45 days, the entire Preliminary Assessment Study will be
available at www.sedar.com and on the Company's corporate website at
www.rusoro.com
Note: This Preliminary Assessment Study is conceptual in nature as it is based
partially on inferred resources at both Choco 10 and Increible 6, which at this
stage do not have a high enough level of confidence to provide the economic
basis for a production decision. The Company plans to complete its infill
drilling program and additional study, which if positive, may advance the
Project to the Definitive Feasibility level.
Qualified Person
The Preliminary Assessment Study was prepared by Micon International Limited.
Qualified Person: Mr. Gregory Smith, P.Geo, the Vice-President Exploration of
the Company, is the Qualified Person as defined by National Instrument 43-101,
and is responsible for the accuracy of the technical information contained
within this news release.
About Rusoro
Rusoro is a gold production, development and exploration company operating in
Venezuela and is the only foreign gold miner in the country. The Company
controls a large land position in the prolific Bolivar State region of
Venezuela, operating on its own at the Choco 10 Mine and in a JV with the
Venezuelan Government at the Isidora Mine. Ore from both mines is processed
through the Choco 10 mill facility near the town of El Callao. The Company
produced approximately 100,000 ounces of gold in 2008 and is working towards
advancing two new gold mining operations in Venezuela.
ON BEHALF OF Rusoro Mining Ltd.
George Salamis, President
Forward-looking statements: This document contains statements about expected or
anticipated future events and financial results that are forward-looking in
nature and as a result, are subject to certain risks and uncertainties, such as
general economic, market and business conditions, the regulatory process and
actions, technical issues, new legislation, competitive and general economic
factors and conditions, the uncertainties resulting from potential delays or
changes in plans, the occurrence of unexpected events, and the Company's
capability to execute and implement its future plans. Actual results may differ
materially from those projected by management. For such statements, we claim the
safe harbour for forward-looking statements within the meaning of the Private
Securities Legislation Reform Act of 1995.
Rusoro Mining (TSXV:RML)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Rusoro Mining (TSXV:RML)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024
