Stratabound Announces Positive PEA for Fremont Gold Project; 11 Year Mine Life with Average Annual Production of 118,000 Gold Ounces at an AISC of US$1,082/oz and an After-Tax NPV5% of US$210M
Stratabound Announces Positive PEA for
Fremont Gold Project; 11 Year Mine Life with
Average Annual Production of 118,000 Gold
Ounces at an AISC of US$1,082/oz and an
After-Tax NPV5% of US$210M
Toronto, Ontario--(Newsfile Corp. - February 15, 2023) -
Stratabound Minerals Corp. (TSXV: SB)
("Stratabound" or the "Company")
is pleased to announce positive results from the independent
Preliminary Economic Assessment ("
PEA"
) for its 100% owned Fremont Gold Project (the "
Project
")
located in the Mother Lode Gold Belt, north central California.
Highlights:
After-tax net present value ("NPV") (discount rate 5%) of US$210M, internal rate of return ("IRR") of
21% and payback of 4.2 years at a gold price of US$1,750/oz
11-year mine life producing 1,303,000 ounces of gold
Average annual gold production of 118,000 ounces over life of mine ("LOM"), with a peak
production of 157,000 ounces in the 4
th
year
Average cash cost of US$872/oz and all-in sustaining cost ("AISC") of US$1,082/oz gold
Initial Capital Expenditure of US$203M
Annual process plant rate of 2.19 M tonnes at an average feed grade of 2.4 g/t Au and average
overall gold recovery, including offsite processing, of 75.4%
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. There are no
Mineral Reserves contained in the PEA.
P&E Mining Consultants Inc. (
"P&E
") were retained as an independent consultant and Qualified
Persons in March 2022 to undertake a Mineral Resource Estimate ("
MRE
") and PEA on the Fremont
Gold Project in accordance with National Instrument 43-101 (
"NI 43-101"
).
Kappes, Cassiday &
Associates ("
KCA
") was also engaged for the design and capital and operating costs for the process
plant, heap leach facility and project infrastructure.
Kim Tyler, President and CEO of Stratabound, stated today,
"This PEA provides a solid, conservative
base case and a clear path forward with plenty of runway to build and improve upon.
Only 35% of
mineralized strike and two of four mineralized zones have been defined and evaluated to date.
Most
notably, the opportunity remains to expand the at-surface oxide/heap leach potential indicated by the
4-km long by 285-m wide 0.03 - 5.21 g/t
(0.41 g/t average) gold-in-soil anomaly that covers the entire
4 km strike length, (See Feb. 23, 2022 Press release). Oxide Heap Leach is a conventional cost-
efficient processing method already proven and functioning at Equinox Gold's successfully operating
gold mines in California."
He further stated,
"Stratabound is committed to safety, environmental and social responsibility
foremost in this enterprise. Implementing the Railveyor™ system of bulk material transport at
Fremont will substantially mitigate greenhouse gas emissions.
The Railveyor™ is a relatively new,
however proven, electric-powered, hybrid conveyor-rail system that will replace approximately 5
conventional diesel-powered haulage trucks in the underground-to-surface plant haulage
configuration.
Future studies will examine the use of the Railveyor™ in the pit configuration, as well as
other electric green-equipment alternatives, automation and green technology that may be
implemented as that sector continues to leap forward and become more cost-efficient.. The PEA
further accounts for progressively backfilling the open pit and returning mine tails back underground
as paste fill thereby minimizing the footprint and more swiftly restoring the land back to its original
state. Foremost in consideration of future planning is not just simply reclamation, but enhancing the
Property's natural repose and lasting value for the benefit of wildlife, the environment and community
well beyond the end of mine life."
Project Description and Location
The Fremont Gold Project is 100% owned by Fremont Gold LLC, a wholly owned subsidiary of
Stratabound Minerals Corp., and is located in Mariposa County, California approximately 241 km east of
San Francisco in the southernmost portion of the prolific California Mother Lode Gold Belt.
The Project
lies within the Company's wholly owned 3,351-acre (13.56 km
2
) Fremont Property (the "
Property
").
The
Property includes 100% of the mineral, surface and groundwater rights and features four gold
mineralized zones and three former producing gold mines along 4-km of the Mother Lode Gold Belt.
The
PEA considers two of these zones, the Pine Tree/Josephine Deposit and the Queen Specimen Deposit,
along 1.4-km of the 4-km total strike length.
California State Highway 49 transects the Property from
north to south and a 70 kV power transmission line traverses the Property.
Mineral Resource Estimate
The Fremont Gold Project Mineral Resource Estimate was prepared by P&E with an effective date of
June 30, 2022 in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)
Definition Standards on Mineral Resources and Reserves (2014) and Best Practices Guidelines (2019)
(see press release of August 18, 2022).
Pit-constrained Mineral Resources are reported using a cut-off grade of 0.25 g/t Au for oxide material
and 0.45 g/t Au for sulphide material. Out-of-Pit (underground) Mineral Resources are reported using a
cut-off grade of 1.45 g/t Au.
Underground Mineral Resources have been constrained within potentially
mineable long-hole shapes based on block grade and continuity. Historical mining has been depleted
from the updated Mineral Resource Estimate by assigning a zero-volume percentage block inclusion for
known areas of mining and development.
The Fremont Gold Project MRE, including the Pine Tree-Josephine and Queen Specimen Deposits,
comprise 1,163,000 ounces of gold in the Indicated classification and 2,024,000 ounces of gold in the
Inferred classification.
The MRE accounts for an aggregate of only 1.4-km of the entire 4-km Project
strike length.
A summary of the MRE is provided in the following table. The economic assumptions used for the
updated MRE are provided in the notes to the table.
INDICATED
TONNES
(k)
GRADE
(g/t Au)
OUNCES
(k)
PIT-CONSTRAINED
18,891
1.90
1,154
OUT-OF-PIT
121
2.21
9
TOTAL
19,011
1.90
1,163
INFERRED
PIT-CONSTRAINED
22,507
2.06
1,488
OUT-OF-PIT
5,816
2.87
536
TOTAL
28,323
2.22
2,024
Table 1: Summary of Mineral Resource Estimate
Table notes:
1
.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
2
.
A gold price of US$1,700/oz was used.
3
.
A cut-off grade of 0.25 g/t Au for oxide material, 0.45 g/t Au for sulphide material and 1.45 g/t Au for underground material was used.
4
.
Pit-constrained Mineral Resources were determined to be potentially economic based on a mining cost of US$3/t mined, heap leach
processing of US$9.16/t, flotation processing of US$10.02/t and G&A costs of US$2.50/t, with metallurgical recoveries of 85% by heap
leach and 90% by flotation.
5
.
Out-of-Pit Mineral Resources were determined to be potentially economic with the longhole mining method based on an underground
mining cost of US$40/t mined, processing of US$10.02/t and G&A costs of US$2.50/t, with a metallurgical recovery of 90%. Out-of-Pit
grade blocks that did not demonstrate potentially mineable configurations were removed from the Resource Estimate.
6
.
The Inferred Mineral Resource in this estimate has a lower level of confidence that that applied to an Indicated Mineral Resource and
must not be converted to a Mineral Reserve. It is reasonably expected that the majority of the Inferred Mineral Resource could be
upgraded to an Indicated Mineral Resource with continued exploration.
7
.
Totals may not sum due to rounding.
Mining
Mining will begin with three small oxide starter pits and heap leach in year 1 concurrent with initial Pine
Tree-Josephine open pit phase 1.
The oxide heap leach pad is planned to be constructed within the
tailings facility to minimize Project footprint and use a common liner.
The three-phased Pine Tree-Josephine open pit is planned for a production rate of 6,000 tonnes per day
to provide low-cost production and generate early cash flow while the construction and development of
the underground operation starts in year 2.
Upon completion of the Pine Tree-Josephine open pit in year 4, the Queen Specimen open pit is
planned to be developed to supplement underground production to feed the process plant at a rate of
750kt per year.
The open pits will be backfilled with waste rock after mining is completed. There will be
opportunity for progressive reclamation over the life of the mine.
The Pine Tree-Josephine underground mine is planned for a production rate of 4,000 tonnes per day.
The selected mining method is long-hole open stoping with both longitudinal retreat and transverse
mining, depending on the vein thickness. Stopes will be filled with cemented paste backfill. Stope
dimensions will average 10 metres in strike length and 30 metres in height, with a minimum thickness of
4 metres. Mineralized material will be extracted using a fleet of 10-tonne load-haul-dump units that will tip
material down a broken material pass to a Railveyor™ system on a main haulage level. The Railveyor™
will transport material to the process plant via the portal and up a surface hillside.
Metallurgy and Mineral Processing
A total of 6,000 tpd of material will be treated in a process plant that consists of three-stage crushing,
followed by a grinding circuit consisting of a primary ball mill.
A gravity circuit will recover coarse gold
from the plant feed, which then moves on to rougher flotation cells creating a sulphide concentrate
containing the gold. The concentrate will be reground and fed to cleaner cells where the clean
concentrate and gravity concentrate will be filtered and bagged for shipping to a roaster offsite.
For the first year of operation, a heap leach plant will be built to recover the gold in carbon from the heap
leach pad that will be constructed in the tailings facility to minimize footprint and maximize use of liner
construction.
The process plant is followed by a tailings filtration plant with a filter press to produce paste backfill to
send underground and/or to produce dry stack tailings for surface storage.
The flotation plant gold recovery is estimated to average 92% gold to concentrate. At the roaster, 82% of
the gold contained in concentrate is payable, including processing charges.
Infrastructure
Supporting infrastructure on site will include a laboratory, administration offices, a mine dry, warehouse,
first aid office and truck maintenance shop.
In order to mine the Pine Tree-Josephine open pit, a short highway bypass is planned to be constructed.
Environment and Social
The Company continues to work with its environmental consultants to develop a plan for permitting the
Project. The Company reports that its baseline environmental program is progressing well including
biological studies, surface water and monitoring groundwater wells for routine sampling. Other planned
evaluations for the permitting strategy will necessarily consider mine design, processing, and
reclamation plan development.
The Fremont Project is located in Mariposa County on private land and, as such is subject to California
Environmental Quality Assurance ("
CEQA
") process Surface Mining and Reclamation Act ("
SMARA
").
A Conditional Use Permit ("
CUP
") and approved closure plan is sought from the county following the
completion of the Environmental Impact Report and Closure Plan acceptance.
In addition to CUP and
closure plan approval, the project will require permits and authorizations prior to construction and
operation of the mine. Requests for these approvals will be submitted following the CUP and closure
plan approval.
Meanwhile, Stratabound views this development in terms of its benefits to the California economy, as
well as the local Mariposa community through re-invigorating California's mineral wealth under modern
regulatory requirements and environmental awareness.
Capital and Operating Costs
All dollars are USD
CAPITAL EXPENDITURES
Initial capital costs (15% contingency)
$M
203
Sustaining capital costs
$M
274
LOM capital cost
$M
477
COSTS
OP Mining cost
$/tonne mined
2.80
UG Mining cost
$/tonne mined
46.69
Heap Leach Processing cost
$/tonne
7.07
Flotation Processing cost
$/tonne milled
11.70
Concentrate Transport cost
$/tonne milled
6.48
G&A cost
$/tonne milled
2.55
Total cash cost
$/oz
872
AISC
$/oz
1,082
Table 2. Capital expenditure and operating costs of the Fremont Gold Project
Financial Analysis
The economic analysis was undertaken assuming a 5% discount rate. On a pre-tax basis, the NPV5% is
estimated at US$317 million, the IRR is 29% and the payback period is 3.5 years. On an After-Tax
basis, the NPV5% is estimated at US$210 million, the IRR is 21% and the payback period is 4.2 years.
A summary of the Project economics in USD and the projected annual gold production is listed below in
Table 3.
ECONOMICS
PRE-TAX
POST-TAX
Net present value (NPV 5%)
$M
317
210
Internal rate of return (IRR)
%
28.7
21.4
Payback (undiscounted)
Years
3.5
4.2
LOM avg. annual cash flow after capital
$M
69
54
Total cash flow (undiscounted)
$M
561
399
FORECASTS
Gold price assumption
$/oz
1,750
AISC
$/oz
1,082
PRODUCTION
Average annual gold production
oz/year
118,000
Total LOM recovered gold
koz
1,302
Mine life
Years
11
Annual mill rate
MT/year
2.19
Average mill grade
g/t Au
2.4
Average recoveries*
%
75.4
*Note: Net process plant and roaster payable recovery
Table 3. Summary of the Fremont Gold Project economics
Figure 1. Projected LOM gold production averages 118,000 ounces per year over eleven years,
peaking at 157,000 ounces in year four.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/4064/154931_figure1.jpg
Note: Open pit production for the first three years with underground production starting in year 4. Open pit mining is completed in year 7, with low-
grade stockpiled material available for processing in subsequent years.
Sensitivities
Figure 2. Project Net Present Value and Internal Rate of Return Sensitivity to Gold Price.
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/4064/154931_figuretwo.jpg
Next Steps
The results of the PEA indicate that the proposed Fremont Gold Project has technical and financial merit
using the base case assumptions. It has also identified additional upside opportunities for oxide
expansion and further Project optimization.
The Company expects to move forward with enhancing the Project through exploration and further
drilling. The Company will also continue to generate additional drilling targets.
The Company expects to continue baseline environmental work and commence permitting activities
which will include technical studies and surveys for the Project.
The results of the studies, surveys and the
engineering work completed for the PEA will be used to complete the application for the CUP.
The
public release of this PEA will greatly assist the Company in advancing its program of public and
stakeholder engagement.
Independent Qualified Persons
This PEA was prepared for Stratabound by P&E and under NI 43-101 guidelines. The technical content
of this news release has been reviewed and approved by independent "Qualified Persons" Eugene
Puritch, P.Eng., FEC, CET, Andrew Bradfield, P.Eng. both of P&E and Travis Manning, P.E. of KCA.
Technical Report
A NI 43-101 Technical Report on the PEA will be filed on SEDAR within 45 days of this news release.
ABOUT STRATABOUND
Stratabound Minerals Corp. is a Canadian mineral exploration and development company that is
developing its advanced-stage flagship Fremont Gold Project in the historic Mother Lode Gold Belt of
California. The Fremont Property features an NI 43-101 Mineral Resource Estimate (MRE) of 1.16
million Au ounces at an average grade of 1.90 g/t Au in the Indicated classification, plus 2.02 million
ounces at an average grade of 2.22 g/t Au in the Inferred Mineral Resource classification. This current
MRE evaluates only 1.4 km of the entire 4 km strike length of the Fremont Property that features four
gold-mineralized zones. The Company is also advancing its pipeline of early-stage exploration projects
in Canada including the Golden Culvert, Yukon and McIntyre Brook gold projects, and the Captain
Cobalt-Copper-Gold Deposit in New Brunswick.
Mr. R. Kim Tyler, P.Geo., President and CEO of Stratabound, and a "Qualified Person" for the purpose
of NI 43-101, has reviewed and approved the contents and technical information of this news release.
For more information, please visit the company's website at
www.stratabound.com
or contact: R. Kim
Tyler, President and CEO 416-915-4157
.
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.
WARNING: The Company relies upon litigation protection for "forward-looking" statements. The
information in this release may contain forward-looking information under applicable securities laws.
This forward-looking information is subject to known and unknown risks, uncertainties and other factors
that may cause actual results to differ materially from those implied by the forward-looking information.
Factors that may cause actual results to vary materially include, but are not limited to, inaccurate
assumptions concerning the exploration for and development of mineral deposits, currency fluctuations,
unanticipated operational or technical difficulties, changes in laws or regulations, failure to obtain
regulatory, exchange or shareholder approval, the risks of obtaining necessary licenses and permits,
changes in general economic conditions or conditions in the financial markets and the inability to raise
additional financing. Readers are cautioned not to place undue reliance on this forward-looking
information. The Company does not assume the obligation to revise or update this forward-looking
information after the date of this release or to revise such information to reflect the occurrence of future
unanticipated events, except as may be required under applicable securities laws.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/154931