Intrepid provides E. java gold project preliminary economic assessment results
Wednesday, April 20 2011 - 02:32 AM WIB
The PEA was prepared by Kappes Cassiday, of Reno, Nevada, based upon column leach and other metallurgical tests performed at their laboratory.
The heap leach PEA is based on the Company?s December 2010 resource estimate of the near surface oxide resource at Tujuh Bukit (see the Company?s announcement of 14 December 2010) - which is separate from the far larger, underlying porphyry resources -and produced a positive conceptual economic analysis for the project.
Significantly, the PEA, based on conservative assumptions, demonstrated a life of project annual average production of 143,000 recovered ounces of gold for 9 years at a cash cost of US$376 per ounce, net of silver credits at US$16.50 per ounce. The project delivers a post-tax cumulative cashflow of US$445 million, an NPV (at a 10% discount rate) of US$180 million and an IRR of 31%, at a gold price of US$1,050 per ounce (Table 1). The production and financial numbers are reported on a project basis (Intrepid Mines Ltd holds an 80% economic interest in the project).
The study also shows the deposit has considerable leverage to metal prices. At a gold price of US$1,450 per ounce and silver price of US$38 per ounce, post-tax cumulative cashflow increases to US$942 million (a NPV (10%) of US$446 million and an IRR of 54%).
The project has further significant potential with respect to increased resource tonnages at heap leach cut off grades and increases to silver recovery with a dedicated grinding circuit for material grading plus l00g/t silver.
The Company?s board has approved immediate progress towards commencement of a pre-feasibility study, comprising in-fill drilling, metallurgical test work, engineering design and financing evaluation, with the forestry approval process to be conducted in parallel.
Brad Gordon, the Company?s Chief Executive Officer, stated: ?The Tujuh Bukit Oxide PEA demonstrates the viability of an extremely robust, low capital intensity and low operating cost stand-alone gold project. There is significant potential to improve the economics of this initial study through further project refinements as to production rate, the possibility of a small grinding circuit and the conversion of waste to resources as in-fill drilling is completed. The merits of these options will be analysed during the pre-feasibility stage of the study process. I am pleased to announce that Intrepid is now proceeding to the oxide PFS stage.?
The resource estimate used in the PEA was prepared by independent consultants Hellman and Schofield. The resource block model was used in conjunction with Whittle 4D software to create an optimised pit shell as a guide for the working pit designs. A mining study including a practical pit design was created by independent consultants Australian Mine Design and Development Pty Ltd, placing access ramps and catch berms into the slopes while keeping as close as possible to the same volume and waste to mill feed tonnes ratio as the Whittle shell. The Whittle shell used the abovementioned input criteria, as well as a wall slope assumption of 45 degrees. The life of mine design focused on maximising grade delivered to the heap in the early years, while minimising waste haulage profile. The PEA considered a conventional cyanide heap leach followed by Merrill Crowe precipitation and smelting to produce a gold-silver dore on site.
The Company cautions that this PEA is preliminary in nature, and is based on technical and economic assumptions which will be evaluated in the Pre-feasibility Study. The PEA is based on the February 2011 oxide resource model, which is an inferred resource. The current basis of project information is not sufficient to convert the in-situ mineral resources to Mineral Reserves, and mineral resources that are not mineral reserves do not have demonstrated economic viability.
Accordingly, there can be no certainty that the results estimated in this PEA will be realized. The PEA results are only intended as an initial, first-pass review of the potential project economics based on preliminary information. (romel)
Tujuh Bukit Oxide Gold Project - Heap Leach PEA - Summary (100%)
| Life of Mine Production: | 57Mt at 0.86 g/t gold and 23 g/t silver. (based on unoptimised pit at US$ 1,050 per ounce gold and US$16.50 per ounce silver) |
| Annual average gold production: | 143,000 gold ounces per year |
| Life of mine mining rate: | 20,000 mill feed tonnes per day |
| Mining cost: | US$5.76 / processed tonne; (US$ 2.74 / tonne mined) |
| G&A cost: | US$0.80 per processed tonne |
| Total operating cost: | US$10.82 per processed tonne; US$376 per ounce gold (after silver credits) |
| Pre-production capital cost: | US$204M (including working capital and pre-production mining) |
| Company Tax: | 25% |
| Rayalties: | 3.75% on sale price |
Capital cost estimates to first production, as prepared by Kappes Cassiday, are:
| Directs Costs | ? | ? |
| Mining | ? | $7M |
| Heap leach and solution ponds | $32M | ? |
| Reclaim and stacking | $25M | ? |
| Crushing | $17M | ? |
| Other | $29M | ? |
| Contingency | $22M | $125M |
| Sub total - direct costs | ? | $132M |
| ? | ? | ? |
| Indirect Costs | ? | ? |
| Plant | ? | $4M |
| Working capital | ? | $13M |
| Owner's costs | ? | $20M |
| Initial fill | ? | $1M |
| Sub total - indirect costs | ? | $38M |
| EPCM | ? | $16M |
| VAT | ? | $17M |
| ? | ? | ? |
| Capital to first production | ? | $204M |
| Total Phase 2 | ? | $9M |
| Total | ? | $212M |