Black Dragon Gold Corp. (ASX/TSX-V: BDG) (“Black Dragon” or the “Company”) is pleased to announce the positive results of the Preliminary Economic Assessment (“PEA”) completed on its 100% owned Salave Gold Project (“Salave” or “Project”) located in Asturias in northern Spain. The PEA is based on the recently completed Mineral Resource Estimate completed by CSA Global (See October 25, 2018 News Release). All figures are in United States Dollars unless otherwise stated.
The PEA demonstrates robust economics for an underground mining operation with a 14-year mine life.
Paul Cronin, Managing Director and CEO commented,
“The completion of the PEA is a major milestone on the path to development of the Salave Project and the metrics support our belief that Salave can potentially generate strong returns for shareholders. It forms the first step in our permitting process, presenting a new optimised process on a zero- discharge basis that minimises the visual and surface impact of the project.
The robust results of this PEA underline the potential economic viability of the current Salave resource to be mined over an initial 14 year mine life, and our successful drilling campaign last year indicates strong potential for growth in mine life at Salave.
This study supports that Salave can produce over 1.1Moz (560 kt of concentrate averaging over 59 g/t Au), providing a number of marketing options for export and refining, minimising the need for additional plant and equipment, and hence reducing the Projects footprint. The relatively low upfront capex also opens alternative financing opportunities which will ensure that both shareholders and the local community benefit from the success of this Project.”
KEY PEA OUTCOMES
- Pre-Tax NPV at 5% discount rate: US$ 296.2 million.
- Pre-Tax Internal Rate of Return (“IRR”): 28%
- After-Tax Internal Rate of Return (“IRR”): 25%
- After-Tax Payback: 3.8 years
- Pre-Production Capital Cost, including contingency: US$ 95.3 million
- Life of Mine (“LOM”) Sustaining Capital Cost: US$19.3 million
- Estimated Average LOM Total Cash Cost: $729/ounce (oz) Au
- Estimated Average LOM All-In Sustaining Costs (“AISC”): $752/oz Au
Notes: 1. Rounding may cause apparent discrepancies 2. Resource Estimate conducted by CSA Global of Perth Australia (“CSA”) with an effective date of October 22, 2018. Classification of the MRE was completed based on the guidelines presented by Canadian Institute for Mining (CIM, May 2014), adopted for Technical Reports which adhere to the regulations defined in Canadian NI 43-101. The Mineral Resource Estimate was also prepared in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (“2012 JORC Code”). 3. The Mineral Resource Estimate was first announced on 25 October 2018. Black Dragon confirms that it is not aware of any new information or data that materially affects the information in the previous announcement and that all material assumptions and technical parameters underpinning the Mineral Resource Estimate continue to apply and have not materially changed. 4. A cut-off grade of 2 g/t Au has been applied when reporting the Mineral Resource Estimate. 5. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability but do have reasonable prospects for eventual economic extraction. 6. The quantity and grade of reported Inferred Resources in this estimation are conceptual in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Resource. It is uncertain if further exploration will result in upgrading them to an Indicated or Measured Resource category, although it is reasonably expected that the majority of the Inferred Resources could be upgraded to Indicated Mineral Resources with further exploration. 7. The Mineral Resource Estimate underpinning the production targets in this announcement was prepared by a Competent Person under the 2012 JORC Code. 8. The title of the report is “Salave Gold Project Mineral Resource Update for Black Dragon Gold Corp.”, with an effective date of October 22, 2018, and it was authored by Ian Stockton, B.Sc (Geol)., MAusIMM, FAIG, Dmitry Pertel, MSc (Geol), MAIF, GAA, and Galen White, B.Sc, FAusIMM, FGS.
SOURCE: BLACK DRAGON GOLD
DATE: FEBRUARY 10, 2019