Batero Gold Corp Announces Mineral Resource Update and Robust Preliminary Economic Assessment for the La Cumbre Project
Batero Gold Corp Announces Mineral
Resource Update and Robust Preliminary
Economic Assessment for the La Cumbre
Project
Vancouver, British Columbia--(Newsfile Corp. - October 6, 2022) - Batero Gold Corp. (TSXV: BAT) (FSE: 68B) (OTC
Pink: BELDF) ("Batero," "The Company") today announced the results of the Mineral Resource update and the
preliminary economic assessment ("PEA") of its 100% owned La Cumbre project located in the department of Risaralda,
Colombia.
Highlights include:
The present Mineral Resource update now include the Primary zone, which increase the resources in 113 Mt with
0.462 Au g/t and 1.7 Moz Au.
The project has two phases with different capital investments in order to reach the infrastructure requirements of
each phase. The first phase corresponds to the mining of the ore contained in the oxide and transition zones,
which will be agglomerated and processed in leach pads at a throughput of 15 ktpd. The second phase involves
the mining of the primary sulfide zone that will be processed in a flotation and gravimetry plant at a throughput of
30 ktpd.
Stage I will have an average annual production of approximately 75.4 koz Au and 96.4 koz Ag. The second stage
expands mining activities into the sulphide zone and extends the mine life to 14 years with average annual
production of approximately 131.7 koz Au and 230.1 koz Ag.
In the first stage, 452 koz Au and 578 koz Ag will be produced. In the second stage, 1.18 Moz Au and 2.15 Moz
Ag will be produced.
The estimate capital expenditure for phase one totals US$169.5 million of initial capital while phase two totals
US$248.3 million for the expansion.
The total operating cost including mining, processing, site G&A, treatment and refining adds to a total of
US$1,113 million. The C1 cash cost on a by-product basis over the life-of-mine totals US$684/oz of gold or
US$12.90/t milled.
The economic analysis was performed assuming a 5% discount rate. The pre-tax NPV discounted at 5% is
US$730 million; the IRR is 47.5%, and payback period is 1.9 years. On a post-tax basis, the NPV discounted at
5% is $481 million, the IRR is 32.1%, and the payback period is 2.5 years.
All dollar amounts are in US dollars, unless otherwise noted.
The valuation metrics presented in this news release are based on a preliminary economic assessment that includes an
economic analysis of the potential viability of the mineral resources. Mineral resources that are not mineral reserves do
not have demonstrated economic viability; however, given the advanced engineering detail of the components, this could
be considered as an advance estimate of potential Mineral Reserves. This preliminary economic assessment is
preliminary in nature, including resources inferred in the Mineral Resources Statement that are considered too
geologically speculative to apply the economic considerations that would allow them to be classified as mineral reserves.
However, for the estimation of the mine life and consequent economic evaluation, all material considered as an inferred
resource was considered as waste. See "Qualified Person and NI 43-101" below.
Successfully Executing an Alternative Strategy
Batero is carrying out all the processes related to activating the "proportionality test" with the Emberá Karambá indigenous
community with the objective that, together with the protocolization stage carried out with the Emberá Chami group, the
prior consultation process can be fulfilled with both indigenous biases, in order to file the environmental impact study
(EIS).
Discovering New Mineralization on Patented Mining Claims
Three intrusive centers have been identified within the mining property: Dos Quebradas, Mandeval-Centro and La
Cumbre. They are copper-poor gold porphyry-type systems in which the intermediate argillic conclusion locally overprints
an early potassic assemblage and stockwork of quartz veins, where gold is found in altered dioritic intrusions and contact
zones. The Dos Quebradas and Centro-Mandeval intrusives were verified with some drilling, pending their
characterization and development of the filling program to determine their mining potential. Additionally, to the south of the
property, epithermal-type mineralized structures and the presence of mineralized breccias have been found.
Expanding Private Land Package
Batero has been acquiring surface property that is within the area of influence of the pit and mining infrastructure. To date,
it has 67 properties corresponding to 250.51 Ha, which fully cover the area of influence of the pit and the area of influence
of the deposit of organic and waste material located north of the pit and, partially, the areas corresponding to the stockpile
and plant.
The pending properties are under evaluation of the state of titles and commercial appraisals.
Unlocking District Potential
Following the success of exploration in the mining concessions, Batero began evaluating alternative design options to
generate value within this potential district. This included the reevaluation of the 2018 Mineral Resources, the
incorporation of new Mineral Resources from successful exploration results and the completion of metallurgical testing,
leading to a comprehensive review of the mine plan, the design of the process, mining infrastructure siting strategies, and
permitting requirements for the new project.
2022 PEA Summary
The La Cumbre Project contemplates a two-phases mine plan, the first phase reflects a 6-year mine life. Phase II extends
the mine life to 14 years through an expansion to the sulphide zone by gravimetry and flotation.
Phase I contemplates average annual production of up to 75.4 koz Au and 96.4 koz Ag over a 6-year mine life. Phase II
contemplates an expansion of the processing facilities which would increase average annual production up to 131.7 koz
Au and 230.1 koz Ag. over the remaining life of mine. The total operating cost including mining, processing, site G&A,
treatment and refining adds to a total of US$1,113 million. The C1 cash cost on a by-product basis over the life-of-mine
totals US$684/ oz of gold or US$12.90/t milled. 21. The estimate for phase one capital expenditure includes a contingency
of 12.8% and totals US$169.5 million of initial capital while phase two includes a contingency of 25% and totals US$248.3
million for the expansion.
The first stage, designed to treat the ore from the oxide and transition zones at a rate of 15,000 tons per day, has as its
principal process the extraction of gold by leaching with cyanide solution in dynamic pads with estimated recovery of
85.5% in 18 days of spraying. The second stage, designed to treat 30,000 tons per day of ore from the primary zone, aims
to concentrate the gold-bearing ore by gravimetric and flotation processes, with laboratory tests estimating a recovery of
84.9% between the two concentrates. Subsequently, the concentrates are leached by the CIL process, where a recovery
of 95% is estimated, giving an overall recovery of 80.6% gold.
With the inclusion of phase II and assuming a gold price of $1,750 per ounce, the pre-tax net present value of the total
project using a 5% discount rate is US$730 million; the IRR is 47.5%, and payback period is 1.9 years. On a post-tax
basis, the NPV discounted at 5% is $481 million, the IRR is 32.1%, and the payback period is 2.5 years.
According to the tables 1 and 2 the valuation metrics are highly sensitive to the gold price and at a price of $1,925 per
ounce, the post-tax net present value of LOM, using a 5% discount rate, increases to $609 million and the internal rate of
return in LOM increases to 38.4%.
Table 1
1NPV 5% at Various Scenarios
Variation Gold prices
(US$m)
Silver prices
(US$m) Opex (US$m) Initial capex
(US$m)
Sustaining capex
(US$m)
(20%) 223 476 586 535 486
(10%) 352 478 533 508 483
Base Case 481 481 481 481 481
10% 609 483 428 453 478
20% 737 486 375 426 475
1.Net present value and internal rate of return are shown on a post-tax basis.
Table 2
IRR at Various Scenarios
Variation Gold prices (%) Silver prices (%) Opex (%) Initial capex (%) Sustaining capex
(%)
(20%) 18.7% 31.9% 37.0% 41.8% 32.4%
(10%) 25.6% 32.0% 34.6% 36.5% 32.3%
Base Case 32.1% 32.1% 32.1% 32.1% 32.1%
10% 38.4% 32.3% 29.7% 28.5% 32.0%
20% 44.5% 32.4% 27.1% 25.5% 31.9%
A summary of key valuation, production and cost details from the PEA can be found below in Table 3. For further details,
including operating and cash flow metrics provided on an annual basis, please refer to Exhibit 1 and 2 at the end of this
news release. For further details regarding the nature of the PEA and its limitations, please refer to "Qualified Person and
NI 43-101" below.
Table 3
LoM Financial Valuation and Parameters
Item Unit Open pit
Commodity Prices (Long term)
Gold Price US$/oz $1,750
Silver Price US$/oz $22.00
LoM Mine Plan Summary
Mine Life Years 14.0
Minable resource1 kt 106,594
Gold grade g/t 0.56
Silver grade g/t 1.57
Processing Rate tpd 15,000-30,000
LoM Processing Recovery (Oxide and Transitional Materials)
Gold Recovery % 85.5%
Silver Recovery % 46.9%
Item Unit Open pit
LoM Revenue
Net Revenue US$M $2,905.4
LoM Operating Cost
Mining $/t processed 3.66
Processing $/t processed 6.98
Site G&A $/t processed 0.22
Treatment, Refining, Freight $/t processed 0.13
By-product credits $/t processed (0.55)
C1 Cash Operating Cost US$/oz 684.22
AISC Cost US$/oz 770.89
Operating Costs US$M $1,171.5
Royalties US$M $92.5
LoM Cash Flow
EBITDA US$M $1,641.4
Net Cash Flow
Less: Cash taxes US$M ($352.4)
Less: Change in working capital US$M $0.0
Less: Capital expenditures US$M ($466.3)
Net Cash Flow US$M $822.7
Post-Tax NPV 5% US$M $480.6
Post-Tax IRR US$M 32.1%
Payback (1st phase) Years 2.5
1. Gold spot price 1575 US$/oz and silver spot price 20 US$/oz. Cut-off for leachable materials is 0.243 Au g/t and for mill
process is 0.20 Au g/t
Overview of Proposed Operation
Batero Gold's La Cumbre project is planned to be a traditional open pit truck and excavator operation with a flotation
sulphide gold processing plant and an oxide leach processing facility producing gold and silver doré bars.
The proposed ore haulage at the La Cumbre project is based on a conveyor belt system in addition to 35-tonne capacity
trucks. Minera Quinchia considers that possibility of using only trucks as transportation method would increase social risks
due to increased road traffic. Consequently, the ore will be transported by trucks to a temporary zone within the project
area, and from there, it is being planned to use conveyor belts to transport it to the interim stockpiles in the La Perla or
Matecaña sector. This re-handling is planned to be supported by load haul dump (LHD) equipment to the area assigned
for final heap leaching.
An additional benefit of using a belt conveyor system is the potential generation of electrical energy from the operations in
the favorable -549 m vertical distance over 2250 m in length. The overland belts have a descending path that allows
conceptualizing their regenerative nature, resulting in a possible economic advantage estimated at -0.09 $/ton compared
to truck system transport. These possibilities are still under study and have not been defined in this PEA.
The overall mining operation is expected to be a 2-phase open pit. Phase I will operate on land 100% owned by Batero
Gold and will last 6 years. This phase is focused on extracting ore from the oxide and transition zones and their recovery
through the leaching process. All waste and tailings will be disposed in dumps and pads located on private land owned by
Batero Gold. Phase II of the Project has exploration completed and will extend the life of the mine up to 14 years, all
permitting is supposed to be completed and the remaining land acquisition will be completed.
During phase I, 23% of commercial ounces will be obtained with the operation at a mining rate of 15,000 tons per day,
both the ore and the waste will be transported through the overland conveyor, which has an approximate capacity of
30,000 tons per day. Phase II will operate at a rate of 30,000 tons per day, waste dumps will be located north of the pit
and will be transported by mining trucks, during this phase the remaining 73% of planned ounces will be obtained.
The waste storage facilities (WSF) and tailings storage facility (TSF) for Batero are under conceptual design, in contrast to
the heap leaching area which is at an advanced stage of design (can be considered as PFS).
Mineral Resource Estimate
The mineral resource estimate has an effective date of December 31, 2021, that is the cut-off date for information used in
the estimate. Mineral resources that are not reserves do not have demonstrated economic viability. Table 4 summarizes
the mineral resource estimate for the La Cumbre deposit.
Table 4
Total Mineral Resource Statement for All Mineral Zones - December 31, 2021:
Resource Volume Density Tonnage Au g/t Au oz Ag g/t Ag oz
Measured 49,317,902 2.624 129,421,866 0.509 2,117,649 1.52 6,336,330
Indicated 2,411,421 2.606 6,283,667 0.383 77,476 0.45 91,432
Meas. + Ind. 51,729,322 2.623 135,705,533 0.503 2,195,124 1.47 6,427,763
Inferred 356,987 2.533 904,088 0.413 12,005 1.32 38,472
Notes to accompany La Cumbre Mineral Resource tables:
1. Mineral Resources have an effective date of December 31, 2021. The Qualified Person for the estimate is Mr.
Walter La Torre, CP and MAusIMM.
2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
3. Mineral Resources are reported within a conceptual optimized pit that uses the following input parameters: Au
price: US$1,750/troy oz and US$22.0/troy oz Ag, mining cost: US$1.95/t, process cost (including G&A):
US$9.08/t processed, gold selling cost: US$47.00/troy oz and overall slope angle of 38°.
4. Gold recovery in the oxide and transitional zones was fixed at 85.5%. Gold recovery in the primary zone was fixed
at 84.1%.
5. Mineral Resources (Oxide) are reported using a 0.218 Au g/t cut off grade.
6. Mineral Resources (Transitional) are reported using a 0.218 Au g/t cut off grade.
7. Mineral Resources (Primary) are reported using a 0.179 Au g/t cut off grade.
8. Totals may not sum due to rounding as required by reporting guidelines.
Qualified Persons
Mr. Walter La Torre, MAusIMM (CP), is a Qualified Person under National Instrument 43 101 Standards of Disclosure for
Mineral Projects of the Canadian Securities Administrators. Mr. La Torrre reviewed and approved the scientific or
technical disclosure in this release and has verified the data disclosed.
About Batero Gold
Batero Gold Corp. is a precious and base metals advanced exploration company. The company's objective is to develop
the La Cumbre deposit. La Cumbre is located within the Company's 100% owned Batero-Quinchia Gold Project, which
sits within Colombia's emerging and prolific Mid Cauca gold and copper belt, which has measured and indicated
resources of about 2.2 million ounces of gold and 6.4 million ounces of silver. In pursuing these objectives, Batero plans
to leverage its secure treasury position, strong regional relationships, experienced management team, and long-term
financial partners. Shares of the Vancouver-based company trade on the TSX-Venture Exchange under the symbol
"BAT".
For further information please visit the Batero Gold Resource website at http://www.baterogold.com or contact:
Gonzalo de Losada President and CEO Batero Gold Corporation
Email: [email protected]
www.baterogold.com
Tel: + 57 6046041948
Exhibit 1: Mine Plan and processing schedule
Table 5
Life of Mine Plan
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 LoM
Ore
Leach
kt
3,844 5,400 5,400 5,400 1,293 571 193 232 492 834 550 0 0 0 24,209
Ore Mill
kt 65 94 223 34 3,563 6,800 7,534 8,883 10,800 10,800 10,800 10,800 10,800 1,187 82,384
Waste
kt 1,605 1,281 1,190 770 2,392 1,948 3,007 6,482 11,952 7,777 7,129 4,163 2,485 9 52,191
Leach
Au g/t 0.61 0.81 0.77 0.70 0.52 0.60 0.50 0.42 0.39 0.33 0.30 0.00 0.00 0.00 0.68
Leach
Ag g/t 1.46 1.55 1.73 1.72 1.45 1.45 1.94 1.34 1.56 1.23 0.92 0.00 0.00 0.00 1.58
Mill Au
g/t 0.52 0.66 0.69 0.74 0.78 0.84 0.65 0.63 0.48 0.44 0.45 0.42 0.42 0.42 0.53
Mill Ag
g/t 1.42 1.44 1.49 1.70 1.67 1.73 1.82 1.54 1.45 1.73 1.52 1.37 1.51 1.42 1.57
Note: Leach include oxide and transitional ore. Mill is referred as Flotation-Gravimetry plant and include only primary
sulfide ore.
Table 6
Processing Schedule
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14
Heap Leaching
Processing ore Mt 3.80 5.40 5.40 5.40 1.30 2.90
Au g/t 0.61 0.81 0.77 0.70 0.52 0.40
Ag g/t 1.46 1.55 1.73 1.72 1.45 1.33
Flotation
Processing ore kt 4.00 6.80 7.50 8.90 10.8 10.80 10.80 10.80 10.80 1.20
Au g/t 0.78 0.84 0.65 0.63 0.48 0.44 0.45 0.42 0.42 0.42
Ag g/t 1.67 1.73 1.82 1.54 1.45 1.73 1.52 1.37 1.51 1.42
Note: Processing ore include leach and sulfide ore. Leach include oxide and transitional ore. Mill is referred as Flotation-
Gravimetry plant and include only primary sulfide ore. Treatment plan is a conceptual plan from the strategic mine plan at
PEA level prepared by Batero's staff.
Exhibit 2: Detailed Cash Flow Model and Key Assumptions
A detailed cash flow model containing annual production and cost information is shown below. Overall assumptions for
commodity prices, marketing parameters, operating costs and capital costs are also provided.
Table 7
Financial Model Summary
Item Units Year -
1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year
8
Year
9
Year
10
Year
11
Year
12
Year
13
Year
14
Total
LoM
Gold price US$/oz 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750 1750
Silver price US$/oz 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22 22
Mining t ore kt - 3,909 5,494 5,623 5,434 4,856 7,371 7,727 9,115 11,292 11,634 11,350 10,800 10,800 1,187 - 106,594
Mining t
waste rock kt - 1,605 1,281 1,190 770 2,392 1,948 3,007 6,482 11,952 7,777 7,129 4,163 2,485 9 - 52,191
Strip Ratio W:O - 0.41x 0.23x 0.21x 0.14x 0.49x 0.26x 0.39x 0.71x 1.06x 0.67x 0.63x 0.39x 0.23x 0.01x - 0.49x
Processing t
ore kt - 3,844 5,400 5,400 5,400 5,273 6,800 7,534 8,883 10,800 10,800 13,672 10,800 10,800 1,187 - 106,594
Gold Grade % - 0.61 0.81 0.77 0.7 0.72 0.84 0.65 0.63 0.48 0.44 0.44 0.42 0.42 0.42 - 0.56
Silver Grade % - 1.46 1.55 1.73 1.72 1.62 1.73 1.82 1.54 1.45 1.73 1.48 1.37 1.51 1.42 - 1.57
Payable
Gold koz - 64 120 114 104 102 153 131 151 140 129 161 121 122 14 - 1,627
Payable
Silver koz - 82 123 137 136 135 190 222 222 253 302 321 239 264 27 - 2,651
Gold
revenues US$m - 113 211 200 182 179 268 230 264 245 226 282 212 214 24 - 2,847
Silver
revenues US$m - 2 3 3 3 3 4 5 5 6 7 7 5 6 1 - 58
Total
Revenue US$m - 114.3 213.4 202.7 184.8 182 271.7 234.6 269.1 250.1 232.4 289.5 217 219.4 24.2 - 2,905.40
(-)
Downstream
costs
US$m - -0.5 -0.9 -0.9 -0.8 -0.8 -1.2 -1.1 -1.2 -1.2 -1.1 -1.4 -1 -1.1 -0.1 - -13.4
Net
Revenue US$m - 113.8 212.4 201.8 184 181.2 270.5 233.5 267.9 249 231.3 288.1 216 218.3 24.1 - 2,892.00
(-) Mining
costs US$m - -13.6 -16.7 -16.8 -15.7 -18.8 -23.5 -26.8 -38 -55.6 -46.7 -44.6 -36.4 -32.5 -4.9 - -390.6
(-)
Processing
costs
US$m - -31.7 -43.9 -43.9 -43.9 -37.5 -45.5 -50.2 -58.9 -71.3 -71.3 -93.8 -71.3 -71.3 -9.4 - -743.9
(-) G&A US$m - -1.5 -1.5 -1.5 -1.5 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 - -23.6
(-) Royalties US$m - -3.6 -6.8 -6.5 -5.9 -5.8 -8.7 -7.5 -8.6 -8 -7.4 -9.2 -6.9 -7 -0.8 - -92.5
EBITDA US$m - 63 144 133 117 117 191 147 161 112 104 139 100 106 7 - 1,641
EBITDA
Margin % - 55% 67% 66% 63% 64% 70% 63% 60% 45% 45% 48% 46% 48% 30% - 56%
C1 cash
cost US$m - 45.5 60.3 60.1 59 55.9 67.8 75 95 124.2 114.2 134.5 105.2 100.8 15.6 - 1,113.20
AISC US$m - 49.2 67.1 76.1 64.8 61.7 88.3 82.4 103.6 143.5 121.6 143.7 112.1 107.8 16.3 15.8 1,254.20
C1 cash
cost US$/oz - 707.7 501.3 527.1 567.3 546.7 443.5 571.1 629 888.8 885.2 833.1 869.6 826.2 1,152.3 - 684.2
AISC US$/oz - 764.3 557.8 667.3 624 603.4 577.9 628 685.8 1,026.4 942.6 890.3 926.7 883.5 1,209.4 - 770.9
(-) Cash
taxes US$m - -13.6 -40.2 -36.9 -29.5 -27.9 -47.9 -33.8 -35.9 -18.1 -15.7 -21.9 -14.3 -16.1 -0.5 - -352.4
(-) Change
in working
capital
US$m - -16.1 -12.9 1.3 2.3 0.5 -11.7 4.3 -5.1 1.1 2.6 -7.9 10.2 -0.1 27.9 3.7 -
(-) Capital
expenditures US$m -169.5 - - -9.5 -149 -99.3 -11.9 - - -11.3 - - - - - -15.8 -466.3
Unlevered
Free Cash
Flow
US$m -169.5 33.7 90.4 87.9 -59.2 -9.5 119.6 117.8 119.7 84.1 91.1 108.9 95.6 89.5 34.7 -12.1 822.7
Cumulative
Cash Flow US$m -169.5 -135.8 -45.4 42.5 -16.7 -26.1 93.5 211.3 331 415.1 506.2 615.1 710.7 800.1 834.8 822.7