Benton Announces Updated PEA with Improved Economics FOR the Cape Ray GOLD Project, Newfoundland
BENTON ANNOUNCES UPDATED PEA WITH IMPROVED ECONOMICS FOR
THE CAPE RAY GOLD PROJECT, NEWFOUNDLAND
February 9, 2017
Thunder Bay, Ontario: Benton Resources Inc. (TSXV: BEX) (“Benton” or “the Company”) and its joint
venture partner Nordmin Engineering Ltd. (“Nordmin”), is pleased to release the results of an updated
positive preliminary economic assessment (“PEA”). Included with this PEA update is the announcement
on the advanced Environmental Assessment (EA) progress for its Cape Ray Gold Project, located
approximately 20 kilometers northeast of Port aux Basques, Newfoundland.
The 2016 drilling program provided the team with numerous insights into the nature of this project. It
allowed the team to revise the geologic and resource models to better represent the intrinsic nature of the
mineral resource, and make a re-assessment to the overall approach and layout of the proposed mine
design.
The updated results of the PEA include a pre-tax net present value at a 7 percent discount rate of $82.2
million with a pre-tax internal rate of return of 40 percent and a post-tax NPV at a 7 percent discount rate
of $56.9 million with a post-tax IRR of 34 percent.
The PEA is based on the mineral resource estimate completed by Marc Jutras, P.Eng., M.A.Sc., outlined
in the National Instrument 43-101 technical report update.
Highlights from the PEA, with the base-case gold price of $1,306 (U.S.) per ounce and an exchange rate
of $1.26 CAD/USD, are as follows (all figures in Canadian dollars unless otherwise stated):
• Pre-production Capital is $54.5 million with a contingency of 10% included within the initial
capital. Pre-production is for a 2 year period.
• Sustaining Capital $27 million for the Life of Mine.
• Pre-tax NPV (7%) of $82.2 million and internal rate of return of 40%.
• Post-tax NPV (7%) of $56.9 million and internal rate of return of 34%.
• Pre-tax Net Revenue of $146.8 million over 9 year LOM.
• Post-tax Net Revenue of $104.3 million over 9 year LOM.
• Positive Cash-flow is realized in year 2.
• 2.8 million tonnes of mill feed averaging a combined 3.3 g/t gold and 9.7 g/t silver.
• Mill operates at average tonnage of 1,000 tonnes per day.
• Total production of 291,000 ounces of gold and 553,000 ounces of silver.
• Gold recovery of 98% and Silver recovery 63%.
Chris Dougherty, P.Eng., President of Nordmin stated “the PEA Update is something we felt necessary
given the extensive work we have completed in the last 6 months. The understanding developed through
the completion of the 5000 metre drilling campaign in November has positively changed our overall
knowledge and understanding of these zones”.
All of the economics are completed on Indicated and Inferred categories of the resource model.
684 Squier Street
Thunder Bay, ON P7B 4A8
Tel: 807-475-7474 Fax: 807-475-7200
www.bentonresources.ca
TSX-V: BEX
The table below compares the change in IRR and NPV from the 2016 PEA and the 2017 revision.
Pre-Tax
Year 2017 2016
IRR 40% 29%
Discount rate NPV ($ million)
0% 146.85 88.43
7% 82.19 48.43
10% 64.36 36.74
15% 42.66 22.07
After Tax
IRR 34% 24%
Discount rate NPV ($ million)
0% 104.26 63.43
7% 56.86 32.64
10% 43.72 23.64
15% 27.66 12.35
Mineral Resources – Effective date of February 1, 2017
51 ZONE + 04 ZONE + 41 ZONE+WGH – INDICATED MINERAL RESOURCES 1,2,3
Au Cut-Off
(g/t)
Tonnage
(,000)
Average
Au
(g/t)
Total Au
oz.
(,000)
Average
Ag
(g/t)
Total Ag
oz.
(,000)
1.0 4,148 2.75 367 9.76 1,302
1.5 2,783 3.5 313 11.67 1,045
2.0 1,990 4.21 269 13.13 840
2.5 1,486 4.87 233 14.71 703
3.0 1,155 5.49 204 16.14 599
3.5 928 6.03 180 17.26 515
4.0 754 6.57 159 18.15 440
4.5 621 7.06 141 19.12 382
5.0 512 7.56 124 20.1 331
51 ZONE + 04 ZONE + 41 ZONE + WGH ZONE – INFERRED MINERAL RESOURCES 1,2,3
Au Cut-Off
(g/t)
Tonnage
(,000)
Average Au
(g/t)
Total Au oz.
(,000)
Average Ag
(g/t)
Total Ag oz.
(,000)
1.0 2,770 1.77 158 6.57 585
1.5 1,199 2.54 98 9.22 355
2.0 725 3.07 72 10.46 244
2.5 357 3.99 46 13.22 152
3.0 204 4.95 32 15.7 103
3.5 144 5.65 26 15.32 71
4.0 105 6.38 21 15.83 53
4.5 96 6.59 20 16.06 49
5.0 77 7.03 18 16.34 41
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
There is no certainty that all or any part of the Mineral Resources estimated will be converted into
Mineral Reserves. The estimate of Mineral Resources may be materially affected by
environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.
2. The CIM definitions were followed for the classificati on of Measured, Indicated, and Inferred
mineral resources.
3. The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature
and there has been insufficient exploration to define these Inferred Resources as an Indicated or
Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them
to an Indicated or Measured Mineral Resource category.
"The receipt of a positive PEA demonstrating strong economics over the life of mine is a major milestone
for Benton," stated Stephen Stares, President and CEO of Benton. "We see numerous opportunities to
further enhance the economics through additional studies and exploration with a high probability for
resource expansion and good potential for new discoveries across the property. We will now focus on
advancing the Cape Ray project toward feasibility through additional exploration, environmental
permitting and further studies”. Benton recognizes that this is an undeveloped area of Newfoundland. As
such, protecting the environment is of great importance. To facilitate the development of a sustainable
project, Nordmin, the joint partner, has experts on staff to complete the necessary studies required
concerning environmental monitoring, assessment and permitting matters.
The Company has initiated work towards firming up costs and preparing a prefeasibility study. Apart from
further metallurgical studies, the work will include drilling and tailings characterization as well as
environmental baseline studies, hydrology monitoring, flora and fauna studies. A NI 43 -101 technical
report for Cape Ray PEA will be filed on SEDAR (www.sedar.com) within 45 days.
The reader should be cautioned that the PEA is preliminary in nature. It contains inferred mineral
resources that are considered too speculative geologically to have the economic considerations applied
to them that would enable them to be categorized as mineral reserves. There is no certainty that the
results of the PEA will be realized.
Cape Ray combined open-pit and underground mine
Key economic assumptions and results
Description Units Value
Total mineralized rock mined Kt. 2,805
Gold grade g/t 3.29
Silver grade g/t 9.73
AuEq grade g/t 3.43
Gold recovery % 98
Silver recovery % 63
Gold price US$/oz. 1,306.15
Silver price US$/oz. 18.97
Exchange Rate $USD/$CAD 1.262
Payable gold metal oz. 291,341
Payable silver metal oz. 553,162
Total net revenue $ million 492.0
Total capital costs (Project and Sustaining) $ million 85.4
Overall Operating costs (total) $ million 259.7
Overall Operating cost (AuEq) US$/ozAuEq 664.6
(AISC) Overall cost (AuEq) US$/ozAuEq 883.0
Payback period years 2
Mine Life years 9
Pre-tax Cumulative net cash flow $ million 146.9
Post-tax Cumulative net cash flow $ million 104.3
Pre - tax NPV (7%) $ million 82.2
Pre - tax IRR % 40
Post - tax NPV (7%) $ million 56.9
Post - tax IRR % 34
Capital and operating costs
The Cape Ray Project has been envisioned as an open-pit mine with starter pits for all the zones and one
underground mining operation for the 51 zone. Open-pit and underground mining are anticipated to be
completed by contract mining companies. The equipment will be supplied by the contractor that is
awarded the work.
Grid electrical power will provide the majority of the electrical power to the project over the life of the
mine. The work force is expected to come from the Isle aux Morts area for the operation of the Mill. The
rest of the workforce will be the responsibility of the contractor.
Total capital cost estimate
Capital Expenditures Contingency $ million
Sustaining Capital Expenditures by Zone
PIT 41 5% -
PIT 51 5% -
PIT 04 5% -
Window Glass 5% 2.89
U.G. 51 5% 24.20
Permitting 10% 2.17
Road work (Quote from Adams Construction) 10% 3.53
Overburden Removal 10% 1.07
Surface Infrastructure - General 10% 2.84
Ore and Waste Pads (3) - Mine & Mill 10% 0.44
Surface Shop 10% 1.68
Land Costs 10% 0.91
Mill Capital 10% 33.34
Tailings 10% 3.82
Water Treatment Plants / Testing 10% 0.56
Power Distribution to Mill 10% 1.16
Working Capital 10% 0.84
Engineering for Capital 10% 1.17
OH & In-directs 10% 1.00
Mine Closure 0% 3.82
Total Capital Expenditures 85.44
Production and Processing
Operations for the Cape Ray project is planned to have both Open Pit and Underground Mining. Each
zone will be campaigned separately with the use of contractors. The initial estimated mill feed will come
from the 04 zone. Once the 04 pit is completed the 51 pit will commence to be mined followed by the 41
pit. The underground development for the 51 zone will start during the mining of the 41 pit. The start of
the Window Glass pit will begin once the 41 pit is mined. The Window Glass pit and 51 underground zone
will be mined simultaneously. All the zones will give a current mine life of 9 years combined at a milling
through-put of 1,000 tonnes per day. The process plant includes conventional crushing, grinding, gravity,
and whole ore cyanide leach. A gold and silver doré will be produced on site. Process reagents will be
removed from the plant tailings prior to placement in a tailings management facility.
Mineral Resources Avg. Au
g/t
Avg. Ag
g/t
Tonnes
(,000)
Pit 41 2.31 8.38 520
PIT 51 4.53 12.40 350
PIT 04 4.67 11.52 208
Window Glass 1.65 5.68 1,155
U.G. 51 and Stock Pile 6.27 16.87 573
Total 2,805
* The mill feed tonnes in the mine plan include Inferred Resources. The reader is cautioned that Inferred
Resources are considered too speculative geologically to have economic considerations applied to them
that would enable categorization as Mineral Reserves. There is no certainty that Inferred Resources will
ever be upgraded to Reserves. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability.
Going forward, the team will be working o n laying out the next 5000 metre drilling program that will
commence this summer, which will also include some geotechnical drilling to support the pit designs and
other work on site and continue to work towards environmental milestones to progress the project to the
next phase.
Qualified Persons and 43-101 Disclosure
Marc Jutras, P.Eng., M.A.Sc., Principal, Mineral Resources, at Ginto Consulting Inc. is an independent
Qualified Person as per National Instrument 43-101, and is responsible for the estimation of Cape Ray’s
mineral resources. Mr. Jutras has reviewed and verified that the technical information contained herein is
accurate and approves of the written disclosure of same.
About Benton Resources Inc. (TSXV: BEX)
Benton Resources Inc. is a well-funded Canadian-based junior with a diversified property portfolio in
Gold-Silver, Nickel, Copper, and Platinum group elements.
Clinton Barr (P.Geo.), V.P. Exploration for Benton Resources Inc., is the qualified person responsible for
this release has prepared, supervised the preparation or approved the scientific and technical disclosure
in the news release.
On behalf of the Board of Directors of Benton Resources Inc.,
"Stephen Stares"
Stephen Stares, President
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
The information contained herein contains "forward-looking statements" within the meaning of applicable securities legislation.
Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and
estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections ,
objectives, assumptions or future events or performance are not statements of historical fact and may be " forward-looking
statements."
Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ
from those reflected in the forward-looking statements, including, without limitation: risks related to failure to obtain ad equate
financing on a timely basis and on acceptable terms; risks related to the outcome of legal proceedings; political and regulatory risks
associated with mining and exploration; risks related to the maintenance of stock exchange listings; risks related to environmental
regulation and liability; the potential for delays in exploration or development activities or the completion of feasibility studies; the
uncertainty of profitability; risks and uncertainties relating to the interpretation of drill result s, the geology, grade and continuity of
mineral deposits; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs
and expenses; results of prefeasibility and feasibility studies, and the possibility that future exploration, development or mining
results will not be consistent with the Company's expectations; risks related to gold price and other commodity price fluctua tions;
and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company’s
disclosure record. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described in forward-looking statements. Investors are cautioned against
attributing undue certainty to forward-looking statements. These forward looking statements are made as of the date hereof and the
Company does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results
could differ materially from the Company’s expectations or projections
For further information contact Stephen Stares @:
684 Squier Street,
Thunder Bay, ON P7B 4A8
Phone (807)475-7474
Fax (807)475-7200
www.bentonresources.ca