KORE Mining Announces Positive Preliminary Economic Assessment FOR Imperial Oxide GOLD Deposit US$ 343 Million NPV5% with IRR of 44% at US$1,450 PER Ounce GOLD Imperial Project PEA Highlights:
Page | 1
TSXV - KORE OTCQB - KOREF
KORE MINING ANNOUNCES POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR
IMPERIAL OXIDE GOLD DEPOSIT
US$ 343 million NPV5% with IRR of 44% at US$1,450 per Ounce Gold
IMPERIAL PROJECT PEA HIGHLIGHTS:
• Robust economics: US$ 343 million NPV5% post-tax with 44% IRR at US$1,450 per ounce gold
• Low capital intensity project with only US$ 142 million pre-production capital cost
• 146,000 ounces gold per year over 8 years for 1.2 million ounces total production
• Technically simple project: shallow open pit, run-of-mine heap leach with existing infrastructure
• Significant leverage to gold price: US$ 464 million NPV5% at recent spot US$1,620 per ounce gold
• Value enhancement through Mesquite-Imperial-Picacho District exploration and resource
expansion
Vancouver, BC April 6, 2020 - KORE Mining Ltd. (TSXV: KORE | OTCQB: KOREF) (“KORE” or the “Company”)
is pleased to announce a positive P reliminary Economic Assessment (“PEA”) for the Company’s 100%
owned Imperial Oxide Gold Deposit (“Imperial” or “ Project”), located in California, USA . The PEA
demonstrates Imperial’s potential to be a robust mid -tier gold mine with compelling project economics.
In addition to the gold price, Imperial has upside potential from deposit extensions and exploration on
the 100% owned Mesquite -Imperial-Picacho District which capture s 28 kilometers of strike from the
operating Mesquite mine (TSX:EQX) to the historic Picacho heap leach mine.
Watch a video (40 seconds) of Scott Trebilcock summarizing the highlights of the PEA – click here. Refer
to the PEA Summary infographic in Figure 1.
The PEA is preliminary in nature, includes 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, and there is no certainty that the PEA will be realized. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.
KORE’s CEO Scott Trebilcock stated: “Imperial is a technically simple, high -return gold project in a safe,
politically stable jurisdiction with a long tradition of gold mining. The PEA delivers robust project
economics based on very reasonable capital expenditures. This low capital intensity derives from the
simplicity of the project which will utilize conventional open pit mining techniques, proven processing and
existing infrastructure.”
Mr. Trebilcock added: “We see the potential to increase value at Imperial through regional exploration
and resource expansion drilling which are planned for later in 2020 . The Imperial PEA generates strong
returns at US$1,450 per ounce, but at near today’s spot price of US$1,600 per ounce, the project has
potential to deliver exceptional returns with an NPV5% of US$ 450 million.”
Marc Leduc, KORE’s COO commented: “The mine plan at Imperial complies with California’s stringent
reclamation and environmental laws while delivering skilled jobs and long -term regional economic
development. We are excited to engage with local stakeholders and move the project into permitting later
this year.”
2 | Page
TSXV - KORE OTCQB - KOREF
Mr. Leduc added: “KORE considered several alternative options at this PEA stage, which have potential to
deliver even higher NPVs by utilizing crushing and additional pre-stripping. A strategic decision was made
to proceed with a lower pre-production capital plan while still delivering strong economic returns. As we
advance Imperial, we will consider trade -offs and optimization opportunities to further maximize the
project NPV.”
KORE will host a webcast on April 7, 2020 at 4PM ET / 1PM PT. See details below.
PEA SUMMARY
The PEA was prepared in accordance with National Instrument 43 -101 (“NI 43-101”) by Global Resource
Engineering (Denver) (“GRE”) - Terre Lane, RMSME MMSAQP, Todd Harvey, PhD, RMSME and supported
by Geo-Logic Associates - Monte Christie, GE PE. The team was led by Marc Leduc, P.Eng. the COO of
KORE Mining . The Company plans to file the PEA on SEDAR at www.sedar.com within 45 days in
accordance with NI 43-101.
This news release contains info rmation from a preliminary economic assessment, which is a conceptual
study, and other forward -looking information about potential future results and events. Please refer to
the cautionary statements in the footnotes below and the Cautionary Statements located at the end of
this news release, which include associated assumptions, risks, uncertainties and other factors.
Unless otherwise stated, all dollar figures are in United States dollars (“$”) and masses are in short tons.
Economics Pre-Tax Post-Tax
Net present value (NPV5%) at 0.75C$/US$ C$ millions $583 $457
Net present value (NPV5%) US$ millions $437 $343
Internal rate of return (IRR) % 52% 44%
Payback (undiscounted) years 2.3 2.7
LOM avg. annual cash flow after tax & capital US$ millions $104 $90
LOM cumulative cash flow (undiscounted) US$ millions $694 $577
Gold price assumption per ounce $1,450
Mine life years 8
Average annual mining rate million tons/yr 43.4
Average annual gold production thousand ounces/yr 146
Total LOM recovered gold million ounces 1.17
Initial capital costs US$ millions $142
Life-of-mine (“LOM”) calculation and “Mine Life” is defined as the duration of mining operations, 8 years.
There are additional years of site work for residual leaching, washing, back -filling and reclamation
modelled.
3 | Page
TSXV - KORE OTCQB - KOREF
GOLD PRICE SENSITIVITIES
The following table demonstrates the post- tax sensitivities of NPV and IRR to gold price per ounce . The
base case, highlighted in the table below, assumes US$1,450 per ounce of gold:
Economic Sensitivities to Gold Prices (post-tax)
Per ounce of gold (NPV5%) millions IRR%
US$1,300 US$234 34%
US$1,450 US$343 44%
US$1,600 US$450 52%
US$1,800 US$590 64%
US$2,000 US$729 75%
OPPORTUNITIES
The PEA outlined a number of initiatives that may enhance the Project including:
• Complete on-strike step-out drilling to potentially expand resources;
• Investigate targets along the Mesquite-Imperial-Picacho trend for new discoveries;
• Infill drill inferred areas with a goal of enhancing resource categorization;
• Consider moving directly to feasibility based on robust available data and simple trade-offs; a pre-feasibility
not necessarily required;
• Examine potential for recoveries as high as 83% under crushing scenario; complete formal trade -off study;
• Complete additional run-of-mine ("ROM") metallurgical test work; and
• Perform additional aggregate tests and marketing studies on the clean alluvial sand and gravels .
NEXT STEPS
The engineering work completed for the PEA will also be used to complete a n update to the Plan of
Operations which is a key document to re-start the permitting process. KORE plans to submit an updated
Plan of Operations to the Bureau of Land Management (“BLM”) in mid -2020 to re -start the permitting
process for Imperial. The Company aims to be in a position to make a construction decision in three years
from submission of the Plan of Operations.
In 2020 the Company will also press forward with enhancing the Project through exploration and further
drilling. KORE will be applying for permits to drill high -priority Mesquite -Imperial-Picacho District
exploration targets, resource expansion targets, and several infill holes to improve confidence in geo-tech,
metallurgy and resource estimate data. The Company will also continue to explore the Mesquite-Picacho
District claims to generate additional drill targets.
WEBCAST DETAILS
Management will host a webcast on April 7, 2020 at 4PM ET / 1PM PT to discuss the PEA. Register for the
webcast here.
Please send your questions to management at [email protected] or at 833 -237-2649. A replay of
the webcast will be available with 24 hours on the Company’s website.
4 | Page
TSXV - KORE OTCQB - KOREF
IMPERIAL PEA DETAILS
GRE notes that the Imperial Project has an abundant collection of data as a result of the exploration,
engineering and environmental studies completed in the 1980s and 1990s. During that period, the Project
had geotechnical drilling and modelling, heap leach designs, plant designs, surface water management
designs, and hydrogeological modelling, to name just a few , that provided a credible data set to the
project team. The Project also has metallurgical sampling and testing completed both by previous owners
and an independent lab, reviewed by GRE, to support the initial engineering design. This data will act as
an important background and aid in the design of future work on the project.
MINING & PROCESSING
The PEA presents an open-pit ROM heap leach scenario where oxide ore is stacked on the leach pads
directly from the mine and is not crushed. In the design process, the engineering team also looked at
several other scenarios:
• Higher NPV mine plan with earlier higher grades processed with additional pre-stripping;
• Contractor mining with lower pre-production capital and higher LOM operating costs; and
• Crushing higher grade ore from pit to increase recovery at expense of additional capital.
KORE management ultimately selected the scenario with the lowest pre- production capital. A more
capital-intensive approach could yield a mine and processing plan with higher project NPV and gold
production.
Mining Plan and Processing Summary
Mine life years 8
Mining rate average tons per day 124,000
Strip ratio waste: mineralization 2.8
Total tonnage mined million tons 347.4
Total mineralized material mined million tons 91.5
Heap leach stacking rate average tons per day 33,000
Average LOM grade gram per metric tonne 0.60
Average LOM recovery % 73%
A detailed mine plan by year is included in Table 1 at the end of this news release.
OPERATING COSTS
Mining costs for owner operated mining, processing and other costs were developed from a mix of first-
principle engineering and benchmarked to the many ROM heap leach operations in California and nearby
Nevada. The Imperial Project is located near a large skilled labour pool and on the same road and power
5 | Page
TSXV - KORE OTCQB - KOREF
infrastructure as the operating Mesquite mine, located nine miles away providing further confidence in
the cost estimates.
Operating Costs (LOM average) (1)
Mining costs (per ton mined) US$/st mined $1.47
Mining costs US$/st processed $5.57
Processing costs US$/st processed $1.85
G&A costs US$/st processed $0.74
Total site operating costs US$/st processed $8.16
Cash Costs*
Cash costs (LOM)* US$/oz $676
(1) Not including post-production reclamation and backfilling. See LOM description above.
The assumed truck diesel fuel price in the PEA is $2.38 per US gallon. About 19% of the mining cost is fuel
so lower fuel prices would decrease mining costs moderately.
INITIAL PRE-PRODUCTION AND SUSTAINING CAPITAL COSTS
Initial capital costs in the PEA are US$142 million including a 25% contingency of US$23.6 million. The
initial mine fleet will be expanded in Year 1 of operations. Infrastructure costs are low due to the proximity
of road, water and power infrastructure . Initial capital also assumes KORE is the owner- operator of all
equipment. Further enhancements may be possible with contract mining or processing of the gold from
the carbon columns at an off -site treatment plant . Sustaining capital is mainly for heap leach pad
expansion and additional mining equipment.
Pre-Production and Sustaining Capital Costs (US$ millions)
Mining and mine infrastructure $35.3
Heap leach pads and plant $47.0
Infrastructure and G&A $15.7
Working capital $7.6
Contingency (25%) $23.6
Pre-production mining $12.6
Total Pre-Production Cost $141.8
LOM sustaining capital $60.2
Closure incl. backfill (1) $144.6
(1) Closure cost includes final backfilling of the open pit and site reclamation to California’s regulated
standards. The cost includes US $107 million in mining cost, US $12 million in site operating G&A during
back-filling of the final pit , in addition to US $25 million in other site closure costs . Backfill will return the
site to plus 25 feet of original topography while re -establishing natural desert washes (drainages). A 95-
million-ton clean alluvial sand and gravel stockpile remain and serve as an aggregate source for local and
regional infrastructure . The balance of the closure cost is for normal non -backfill site closure costs to
remediate disturbances, remove structures, etc.
6 | Page
TSXV - KORE OTCQB - KOREF
ALL-IN-SUSTAINING-COST*
All-in-sustaining costs (“ AISC”)* are competitive with peer projects and in the second quartile when
compared to the World Gold Council AISC cost metric. Imperial’s AISC* is built up as follows:
AISC* per ounce
Operating cost (1) US$647
Royalties (2) US$29
Sustaining capital US$52
Closure US$124
Total AISC* US$852
(1) Operating costs includes US$5 per ounce offsite refining.
(2) Royalties consist of: (a) 1% NSR royalty to Newmont -Goldcorp; and (b) 1% NSR royalty to Macquarie Bank
that has a C$6.75 million buyout before May 6, 2020.
MINERAL RESOURCE ESTIMATE
Imperial is well drilled with 349 boreholes drilled by various operators during the period of 1987-1996.
The mineral resource estimate remains unchanged from December 30, 2019 and was prepared by SRK
Consulting (Canada) Inc. - Glen Cole, PGeo., Anoush Ebrahimi, PEng., and Mark Willow, PEng. The resource
block model derived by SRK was used in the development of this PEA.
The following table shows the Imperial Project mineral resource estimate as of December 30, 2019:
Classification Quantity
(‘000 tons)
Grade Gold
(oz/t)
Contained Gold
(‘000 oz)
Indicated
Grade Zone (Domains 100, 120) 50,379 0.0174 877
Total Indicated 50,379 0.0174 877
Inferred
Grade Zone (Domains 100, 110, 120) 79,869 0.0156 1,245
Gravel with grade (Domain 200) 10,557 0.0041 43
Bedrock with grade (Domain 300) 9,748 0.0050 48
Total Inferred 100,174 0.0133 1,336
Reported at a cut-off grade of 0.003 oz/ton Au using a price of US$1,500 /oz Au inside a conceptual pit shell optimized using mining operating
costs of US$1.40 per ton, metallurgical and process recovery of 80%, combined processing and G&A costs of US$2.30 per ton, US $0.50 per
ton of sustaining capital and overall pit slope of 45 degrees. All figures rounded to reflect the relative accuracy of the estimates.
Further details on the mineral resource estimate are available in the technical report dated December 30,
2019 entitled “Amended Technical Report for the Imperial Gold Project, California, USA” available at
www.koremining.com and filed on January 20, 2020 at www.sedar.com.
QUALIFIED PERSONS/QUALITY ASSURANCE
The Preliminary Economic Assessment was prepared by GRE with Terr e Lane, PE being the Q ualified
Person in charge of its preparation. The resource portion of the PEA is the same as the previous technical
7 | Page
TSXV - KORE OTCQB - KOREF
report dated December 30, 2019 and was prepared by SRK Consulting (Canada) Inc. - Glen Cole, PGeo.,
Anoush Ebrahimi, PEng., and Mark Willow, PEng. With regards to technical matters in this press release
Marc Leduc, P.Eng. is the Qualified Person within the meaning of NI 43 -101 and has reviewed and
validated that the information in this press release is consistent with that provided by the Qualified
Persons responsible for the PEA.
Further information about the PEA referenced in this news release, including informatio n in respect of
data verification, key assumptions, parameters, risks and other factors, can be found in the NI 43 -101
technical report for the Imperial Oxide Gold Deposit that the Company intends to file on SEDAR
(www.sedar.com) under KORE’s profile and on the Company’s website (www.koremining.com) within the
next 45 days from the date of this news release.
ALTERNATIVE PERFORMANCE MEASURES (NON-IFRS MEASURES)
Items marked with a * in this news release are alternative performance measures. Alternative
performance measures are furnished to provide additional information. These non -IFRS performance
measures are included in this news release because the Company believes these s tatistics are key
performance measures that provide investors, analysts and other stakeholders with additional
information to understand the costs associated with the Project. These performance measures do not
have a standard meaning within IFRS and, there fore, amounts presented may not be comparable to
similar data presented by other mining companies. These performance measures should not be
considered in isolation as a substitute for measures of performance in accordance with IFRS.
“Cash Costs ” and “Cash Costs (LOM)” are a non-IFRS measure reported by KORE on an ounces of gold sold
basis. Cash costs include mining, processing, refining, general and administration costs and royalties but
excludes depreciation, reclamation, income taxes, capital and explo ration costs for the life of the mine,
defined above as 8 years.
“All-In-Sustaining-Costs” (“ASIC”) is a non -IFRS measure reported by KORE on a per ounce of gold sold
basis that includes all cash costs noted above (mining, processing refining, general and administration and
royalties), as well as sustaining capital and closure costs , but excludes depreciation, capital costs and
income taxes.
ABOUT IMPERIAL OXIDE GOLD DEPOSIT
Imperial is a structurally controlled intermediate epithermal gold deposit. The oxide gold d eposit is
currently 2.44 kilometers long, up to 0.75 kilometers wide and is open both along strike and downdip.
KORE controls the 28 km long Mesquite-Imperial-Picacho exploration district, including 1,005 claims
staked in September 2019, between Mesquite and Picacho that runs through Imperial. This trend remains
underexplored and open to new oxide discoveries. More details on the deposit geology and exploration
potential can be found in KORE’s January 7, 2020 and September 12, 2019 news releases.
ABOUT KORE
KORE is 100% owner of a portfolio of advanced gold exploration and development assets in California and
British Columbia. KORE is supported by strategic investors Eric Sprott and Macquarie Bank who, together
with the management and Board own 66% of the basic shares outstanding.
8 | Page
TSXV - KORE OTCQB - KOREF
Further information on Imperial and KORE can be found on t he Company’s website at
www.koremining.com or by contacting us as [email protected] or by telephone at (888) 407-5450.
On behalf of KORE Mining Ltd
”Scott Trebilcock”
Chief Executive Officer
(888) 407-5450
This news release does not constitute an offer to sell or a solicitation of an offer to sell any KORE common
shares in the United States.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements relating to the future operations of the Company
and other statements that are not historical facts. Forward -looking statements are often identified by
terms such as "will", "may", "should", "anticipate", "expects", “intends” , “indicates” and similar
expressions. All statements other than statements of historical fact, included in this release, including,
without limitation, statements regarding the future plans and objectives of the Company are forward -
looking statements. Forward -looking statements in this news release include, but are not limited to,
statements with respect to: the results of the PEA, including future Project opportunities, future operating
and capital costs, closure costs, AISC, the projected NPV, IRR, timelines, permit timelines, and the ability
to obtain the requisite permits, eco nomics and associated returns of the Imperial Project, the technical
viability of the Imperial Project, the market and future price of and demand for gold, the environmental
impact of the Imperial Project, and the ongoing ability to work cooperatively with stakeholders, including
the local levels of government. Such forward-looking statements, and any assumptions upon which they
are based, are made in good faith and reflect our current judgment regarding the direction of our business.
Management believes th at these assumptions are reasonable. Forward looking information involves
known and unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from any future res ults,
performance or achievements expressed or implied by the forward-looking information.
Such factors include, among others: risks related to exploration and development activities at the
Company’s projects, and factors relating to whether or not mineralization extraction will be commercially
viable; risks related to mining operations and the hazards and risks normally encountered in the
exploration, development and production of minerals, such as unusual and unexpected geological
formations, rock falls, seismic activity, flooding and other conditions involved in the extraction and
removal of m aterials; uncertainties regarding regulatory matters, including obtaining permits and
complying with laws and regulations governing exploration, development, production, taxes, labour
standards, occupational health, waste disposal, toxic substances, land use, environmental protection, site
safety and other matters, and the potential for existing laws and regulations to be amended or more
stringently implemented by the relevant authorities; uncertainties regarding estimating mineral
resources, which estimate s may require revision (either up or down) based on actual production
experience; risks relating to fluctuating metals prices and the ability to operate the Company’s projects at
a profit in the event of declining metals prices and the need to reassess feasibility of a particular project