• August 30, 2020

Velocity Announces Positive Pre-Feasibility Study Results for the Rozino Gold Project, Southeast Bulgaria

Published on August 30th, 2020

Vancouver, British Columbia Velocity Minerals Ltd. (TSXV: VLC) (“Velocity” or the “Company”) announces the results of an independent Prefeasibility Study (“PFS”) on its Rozino gold project (“Rozino” or the “Project”) located in southeast Bulgaria.  The PFS establishes the Rozino deposit as supporting an economic open pit mine operation with gold recovery by a combination of on-site concentration in a flotation plant (“Flotation Plant”) and further processing to produce a gold-silver doré in the existing and operating processing plant (“Processing Plant) located in Kardzhali, 85 km by road from Rozino, where  doré would be produced.  The PFS financial model base case returns an after-tax Net Present Value at a 5% discount rate (“NPV5%”) of CAD $163 million and an after-tax internal rate of return (“IRR”) of 27.4%.

Rozino is located within the Tintyava prospecting and exploration licence owned by Tintyava Exploration AD (“Tintyava”), in which Velocity has 70% ownership.

“We are pleased to report results of the Rozino prefeasibility study, which further de-risks the project and provides opportunities for additional project enhancements as we advance the project towards production,” stated Keith Henderson, Velocity’s President and CEO, “The prefeasibility study presents financial results for the Rozino gold deposit as currently defined.  Exploration work is ongoing aiming to discover and define additional mineralization within the 145 km2 exploration licence and at Velocity’s other option properties in the region, which could potentially fit into a Hub and Spoke development model.  Over the coming 12 months, Velocity will continue to aggressively explore the exploration properties in the surrounding area, aiming to discover and define mineral resources as part of this strategy.”

All amounts are reported in United States dollars (US$) unless otherwise specified.

Prefeasibility Study1 Highlights

  • After-Tax Financials:  After-tax NPV5% of CAD$163 ($123) million and after-tax IRR of 27.4% using a base case gold price of $1,500 per ounce.
  • Life of Mine Earnings:  $293 million before interest, taxes, and depreciation.
  • Cash Cost:  All-in sustaining cost2 of $755 per ounce of gold and cash cost3 of $699 per ounce of gold.
  • Capital Costs:  Total estimated capital costs of $94.8 million and pre-production capital costs of $87.1 million (including an 11% contingency).
  • Mineral Resource: Indicated Mineral Resource at a 0.3 g/t gold cut-off grade of 20.5 Mt at 0.87 g/t gold, for contained gold of 573,000 ounces and an Inferred Mineral Resource at a  0.3 g/t cut-off of 0.38 Mt at 0.8 g/t gold for 10,000 ounces4.
  • Initial Mineral Reserve: Probable Mineral Reserve at a 0.5 g/t gold cut-off grade of 11.8 Mt at 1.22 g/t gold for 465,000 ounces.
  • Mining:  Open pit with 0.5 g/t gold cut-off grade (COG), low strip ratio of 2.2 and 1.22 g/t life of mine (“LOM”) gold grade.
  • Conventional Process Flow Sheet: Returns 79.3% gold recovery to doré at the operating Processing Plant.
  • Processing:  On-site flotation producing gold-bearing pyrite concentrate assaying from 15 to 40 g/t and transportation to the Processing Plant (located 85 km from the Project) for processing to produce doré.
  • Low Environmental Risk:  Small project footprint with benign, non-acid generating and non-hazardous waste and tailings material.
  • Opportunities for Project Enhancement:  The Rozino gold deposit is open to the southeast and exploration is ongoing.  Additional pit tailings storage capacity exists to accommodate potential increases in ore production.

(1)  Base case parameters assume a gold price of US$1,500/ounce and an exchange rate (CAD$ to US$) of 0.75. Financial results on 100% equity basis.
(2)  All-In Sustaining Cost (AISC) is defined as all cash costs related to production costs such as mining, processing, refining, site administration, and NSR royalty to final product (direct and indirect), and mine closure and rehabilitation. Sustaining capital costs related to continuing the business including development and equipment required to sustain production are included. Taxes, working capital, M&A, disposals, and acquisitions as well as new mine development capital costs are excluded.  See “Use of Non-IFRS Financial Performance Measures” below.
(3) Cash Costs include production costs such as mining, processing, refining, site administration, and NSR royalty, divided by gold ounces sold to arrive at a cash cost per gold ounce sold. See “Use of Non-IFRS Financial Performance Measures” below.
(4)  Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  Inferred Mineral Resources are considered too speculative geologically in nature to enable them to be categorized as Mineral Reserves and there can be no certainty that all or any part of an inferred mineral resources will ever be upgraded to Indicated Mineral Resources or Measured Mineral Resources.  

The PFS was prepared by CSA Global, an international mining consultancy with experience in Bulgaria, in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).  A technical report prepared pursuant to NI 43-101 on the Project will be filed on SEDAR within 45 days of the date of this news release.

Velocity’s strategy is to develop a low cost “Hub and Spoke” operation in southeast Bulgaria whereby multiple gold projects produce gold concentrates for trucking to an existing, central processing plant for the production of doré.  Other than Rozino, the projects referred to in the “Hub and Spoke” development model do not have defined resources nor is there is any guarantee that resources will be defined. These projects are not included in the PFS.  We refer to the risks and assumptions set out in our Cautionary Statement regarding Forward-Looking Information located at the end of this release.


The PFS represents the best available estimates of operating and financial parameters of the Rozino Project.  CSA Global recommend that the Company progress to complete a Feasibility Study for the Project, which will aim to resolve key project parameters with greater certainty. It is recommended that ongoing exploration drilling be completed prior to commencement of the Feasibility Study so that any additional discoveries can be integrated therein.


The proposed open pit mining operation at Rozino is considered low to medium risk from a technical standpoint.

CSA Global were able to determine that mineralization can be adequately modelled for its diluted, recoverable grade properties assuming a selective mining unit (SMU) of 4 x 6 x 2.5 m using the multiple indicator Kriging (MIK) methodology.  No further dilution or mining loss was considered appropriate.  Key to this recommendation is that the operational and technical mining team, mine management, and key operators to be well trained and attentive to dilution and ore loss controls and consistently apply best practices in mineral handling.

The small pit size and requirement for there to be six to eight working locations may result in ore and waste scheduling constraints. Detailed short-term planning will identify the stress points and enable mitigation.
Concentrate transport will require approximately 12 X 20 t trucks per day transporting concentrate to the existing Processing Plant located at Kardzhali (85 km by road). Although considered a low risk, public safety and concentrate supply continuity will be areas of focus during the mine life.

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SOURCE: Velocity Minerals
DATE: 30 August, 2020

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