Newcore Gold Announces Positive Updated Preliminary Economic Assessment for the Enchi Gold Project, Ghana After-Tax NPV5% of $371 million, After-Tax IRR of 58% at $1,850/oz Gold, Average Annual Gold Production of ~120,000 ounces
NEWS RELEASE
Suite 1560 - 200 Burrard Street www.newcoregold.com
Vancouver, British Columbia V6C 3L6 [email protected]
Newcore Gold Announces Positive Updated Preliminary Economic
Assessment for the Enchi Gold Project, Ghana
After-Tax NPV5% of $371 million, After-Tax IRR of 58% at $1,850/oz Gold,
Average Annual Gold Production of ~120,000 ounces
April 25, 2024 TSX-V: NCAU, OTCQX: NCAUF
Vancouver, BC – Newcore Gold Ltd. ("Newcore" or the "Company") (TSX-V: NCAU,
OTCQX: NCAUF) is pleased to announce positive results from the independent, updated
Preliminary Economic Assessment ("PEA") completed for the Company’s 100% -owned Enchi
Gold Project ("Enchi" or the "Project") in Ghana . The PEA was led by Lycopodium Minerals
Canada Limited ("Lycopodium") of Toronto, Canada and provides a base case assessment of
developing Enchi as a low capital intense, open pit , heap leach operation, processing 8.1
million tonnes per annum ("mtpa") utilizing contract mining. The PEA incorporated updated
costing as well as development work completed on the Project since 2021 including a larger
Mineral Resource Estimate completed in 2023, a significant amount of bench-scale and bulk
sample metallurgical testwork and an updated environmental and social baseline study. All
currencies in this news release are reported in U.S. dollars.
Highlights from the PEA at Enchi
• Strong project economics with low capital intensity.
o At a gold price of $1,850/oz: $5 86 million pre -tax net present value discounted at
5% ("NPV5%") and a 77% pre-tax internal rate of return ("IRR"), $371 million after-tax NPV5%
and a 58% after-tax IRR.
o At a gold price of $ 2,350/oz: $ 987 million pre -tax NPV 5% and a 127% pre -tax IRR,
$632 million after-tax NPV5% and a 92% after-tax IRR.
o Initial capital costs estimated at $106 million (including a 20% contingency), with a short
after-tax payback of 1.6 years.
• Robust production profile with a low-cost structure driven by a technically
straightforward, open pit, heap leach operation and low strip ratio.
o Average annual gold production of 121,839 ounces; peak gold production in year 6 of
155,188 ounces; 1.1 million ounces gold recovered over a 9-year life of mine ("LOM").
o LOM strip ratio of 2.67 to 1, mined grade of 0.60 g/t Au and gold recovery of 81.8%.
o LOM operating costs (1) estimated at $801/oz of gold, cash costs (2) estimated at $934/oz
of gold, LOM all-in sustaining costs (AISC) (3) estimated at $1,018/oz of gold.
• Economics incorporate significant development work completed since 2021.
o The PEA incorporated the Mineral Resource Estimate completed in 2023 which reflected
the addition of approximately 34,000 metres of Reverse Circulation ("RC") and diamond
drilling completed in 2021 and 2022.
o Significant metallurgical testwork completed to date, highlighting the Project’s
amenability to heap leach processing. Advanced metallurgical testwork consists of more
than 390 tests including bottle rolls, column tests and two bulk-scale pilot heap tests.
- 2 -
• Significant l onger-term growth potential from the district-scale exploration
opportunity at Enchi.
o Enchi’s property covers 248 km2 along a prolific gold belt that hosts multi-million-ounce
gold mines. Newcore has identified more than 20 pre -resource targets across the
property and with less than 10% of the property explored. The district scale exploration
opportunity at Enchi remains largely underexplored and untested.
o All deposits and targets remain open along strike and at depth, with potential for
resource growth in both shallow oxides and within the sulphide mineralization.
Note: All currencies in this news release are reported in U.S. dollars unless otherwise specified. Base case parameters
assume a gold price of $1,850/oz. NP V calculated as of the commencement of construction and excludes all pre -
construction costs. Cash costs and AISC are non-IFRS financial measures (see cautionary language).
(1) Operating costs consist of mining costs, processing costs and mine site G&A.
(2) Cash costs consist of operating costs plus treatment and refining charges and royalties.
(3) AISC consists of cash costs plus sustaining capital (excluding closure costs).
Luke Alexander, President and CEO of Newcore stated, "The PEA confirms the opportunity at
Enchi to develop an open pit, heap leach operation with robust economics. This is a notable
milestone and an important step in advancing the development of our Enchi Gold Project in
Ghana towards a construction decision. The PEA is a culmination of several years of de-risking
work that included an updated Mineral Resource Estimate completed in 2023 and significant
metallurgical testwork on the Project. Having Lycopodium on-board as the lead consultant also
continues to support the development of Enchi as they are a partner of choice given their
strong operational experience in West Africa. Our emphasis moving forward is to continue to
drive development of the Project towards production, while not losing focus on the district
scale exploration opportunity that will drive the size and scale opportunity at Enchi longer-
term. The economics within the PEA support advancing Enchi towards produc tion while also
providing a strong underpinning of value for Newcore as we look to continue to unlock the
Project’s significant potential."
Greg Smith, VP Exploration of Newcore stated, "We believe that longer-term the Project
economics will benefit from the sizeable upside potential that exists at Enchi , with future
resource expansion probable within not only the near -surface oxide and transition
mineralization but also within the higher-grade structures defined at depth . The Project has
substantial untapped potential, with a strategic location along a gold belt that hosts sizable
mining operations. Enchi’s geological footprints align with those neighboring gold mines, with
Newcore only just starting to define the potential of the Project that is reminiscent of its
neighbors that began small and grew significantly over time. We look forward to continuing to
prove out this potential for size and scale with an exploration focus alongside driving
development of the Project going forward. As we advance Enchi with additional studies
towards production, we will continue to prioritize working with our local communities to
provide positive impacts, creating value for all stakeholders as we unlock the significant value
potential at our Enchi Gold Project in Ghana."
The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too
speculative geologically to have economic considerations applied to them that would enable
them to be categorized as Mineral Reserves, and there is no certainty that PEA results will be
realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability.
- 3 -
The PEA was prepared by Lycopodium as the lead consultant in accordance with National
Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Lycopodium was
the lead study manager and led the design parameters and cost estimates for process
operations, process facilities, major equipment selection, plant site infrastructure, as well as
operating and capital expenditures. The PEA was supported by Micon International Limited
(mine planning and mine operations, reclamation) and SEMS Exp loration (mineral resource
estimates). The NI 43-101 PEA Technical Report will be filed on SEDAR+ within 45 days of this
news release. All currencies are reported in U.S. dollars unless otherwise specified.
Newcore will host an investor webinar to discuss the results of the PEA on Friday,
April 26, 2024 at 10am PT / 1pm ET. Details are provided at the end of this news release.
PEA Overview and Financial Analysis
The Enchi Gold Project is located in southwest Ghana, with the Project’s 2 48 km2 covering
approximately 40 kms of Ghana’s prolific Bibiani Shear Zone, a gold belt which hosts several
multi-million-ounce gold mines including Newmont’s Ahafo Mine and Asante Gold’s Bibian i
and Chirano mines.
The PEA , with an effective date of April 24, 2024, contemplates an open pit, heap leach
operation with a low strip ratio using contract mining and processing 8.1 mtpa (approximately
22,500 tonnes p er day). The heap leach facility will be built in three phases, with excess
capacity available for future expansion . Heap leach feed will be trucked from five deposits
(Sewum, Boin, Nyam, Kwakyekrom, Tokosea) to a central crushing and heap leach facility which
will be located between the Boin and Sewum deposits, which together host approximately 76%
of the Mineral Resources currently defined at Enchi. Secondary crushing capacity is assumed
to only be required once the mine plan shifts to processing transitional and fresh roc k
mineralization, in the second half of the mine life , reducing the upfront capital cost
requirements.
Table 1 - Important Parameters of the PEA
Key Assumptions
Base Case Gold Price $1,850/oz
Production Profile
Total Tonnes Processed (mt) 69.8
Total Tonnes Waste (mt) 186.1
Strip Ratio 2.67
Heap Leach Feed Grade 0.60 g/t Au
Mine Life 9 years
Throughput (mtpa) 8.1
Gold Recovery 81.8%
LOM Gold Production (ounces) 1,096,553
LOM Average Annual Gold Production (ounces) 121,839
Peak Gold Production in Year 6 (ounces) 155,188
- 4 -
Unit Operating Costs
LOM Average Operating Costs (1) $801/oz gold
LOM Average Cash Costs (2) $934/oz gold
LOM AISC (Cash Costs plus Sustaining Capital) (3) $1,018/oz gold
Capital Costs
Initial Capital Cost $106 million
Sustaining Capital Cost (4) $92 million
Closure Cost $18 million
(1) Operating costs consist of mining costs, processing costs and mine site G&A.
(2) Cash costs consist of operating costs plus treatment and refining charges and royalties.
(3) AISC consists of cash costs plus sustaining capital (excluding closure costs).
(4) Sustaining capital cost includes $7.4 million in each of years three and six for heap leach pad
expansion, as well as ~$58 million for crusher installation completed in years four and five.
Table 2 - Project Economics Summary
$1,850/oz Gold Price $2,350/oz Gold Price
Pre-Tax After-Tax Pre-Tax After-Tax
NPV5% $586 million $371 million $987 million $632 million
IRR 77% 58% 127% 92%
Payback 1.4 years 1.6 years 0.8 years 1.1 years
LOM Cash Flow $788 million $506 million $1,298 million $837 million
Chart 1 - Production and Cost Profile by Year
The financial model was completed on a 100% project basis and includes a 5% gross royalty
to the Ghanaian Government and a 2% net smelter return ("NSR") royalty to Triple Flag Precious
Metals Corp. The economic analysis carried out for the Project uses a cash flow model at a base
gold price of $1,850 per ounce and a 5% discount rate. The financial assessment of the Project
was carried out on a 100% equity basis, not accounting for potential sources of funding which
may include debt. No provisions were made for the effects of inflation, and current Ghana tax
- 5 -
regulations were applied to assess the tax liabilities. The Government of Ghana has the right
to a 10% free carried interest in the Project.
A summary of the cash flow model can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-summary-cash-flow.pdf
Table 3 - Enchi Economic Sensitivity to Gold Price
Gold Price (US$/oz) $1,650 $1,750 $1,850 $1,950 $2,050 $2,150 $2,250 $2,350
Pre-Tax NPV5% $425 M $505 M $586 M $666 M $746 M $827 M $907 M $987 M
Pre-Tax IRR 58% 67% 77% 87% 97% 107% 117% 127%
Pre-Tax Payback 1.7 years 1.5 years 1.4 years 1.2 years 1.1 years 1.0 years 0.9 years 0.8 years
After-Tax NPV5% $266 M $319 M $371 M $423 M $475 M $527 M $580 M $632 M
After-Tax IRR 44% 51% 58% 65% 72% 78% 85% 92%
After-Tax Payback 2.0 years 1.8 years 1.6 years 1.5 years 1.4 years 1.3 years 1.2 years 1.1 years
Chart 2 - After-Tax Economic Sensitivity to Gold Price, Operating and Capital Costs
Metallurgical Testing and Recoveries
A conceptual heap leach facility was designed, with the facility processing oxide, transition and
fresh rock mineralization. The PEA utilized recoveries estimated for each material type, with
85% for oxide and transition and 75% for fresh, for an average gold recovery of 81.8%.
Determination of the appropriate recovery value was based on the significant amount of test
work completed to date on each of the five existing deposits (Sewum, Boin, Nyam,
Kwakyekrom, Tokosea). This testwork completed by Newcore and its predecessors dates back
to 2012 and was conducted at SGS, Intertek and the University of Mines and Technology in
Tarkwa (UMaT). The test programs were conducted on diamond drill holes, RC drill holes,
composite samples and on trench samples covering a range of gold grades, weathering
intensities and different portions of each deposit. Individual tests have consisted of a series of
testwork including cyanide soluble assays, diagnostic leach, bottle rolls, column tests and two
15-tonne bulk-scale pilot heaps completed on representative samples. This testwork showed
that cyanide leaching is a viable option for the extraction of gold from the oxide, transition and
- 6 -
fresh domains, and this recovery rate is consistent with typical heap leach operations that have
similar types of mineralization.
More than 390 tests have been completed to date . Testwork has included cyani de assays,
24-hour and 48-hour bottle rolls, gravity gold recovery, size distribution analyses, 24 -hour
dissolution bottle roll, diagnostic leach bottle roll, 48 -hour kinetic leach bottle roll, optimized
leach bottle roll, 5 to 10-day bottle roll, 30 to 90-day column tests and bulk-scale pilot heap
tests. Metallurgical testwork completed to date indicates strong recoveries and the Project’s
amenability to heap leach processing.
Heap leach percolation and recovery values used data from all representative column leach
testwork conducted thus far for the Enchi Gold Project. Some samples reached ultimate
recovery by 60-days, while others continued to progress even after 90-days.
Newcore completed two bulk-scale pilot heap tests in 2023 that continued to confirm Enchi’s
strong amenability to heap leach processing. Trench samples, 15-tonnes each, from Boin and
Sewum (the two largest deposits on the Project) were selected for bulk -scale pilot heap tests
over a 60-day period. The samples consisted of representative oxide material with individual
samples and composites covering a range of gold grades. The two composite samples
underwent an agglomeration process using Portland cement. Cyanide solution at 1,000 ppm
NaCN was added with 2.28 kg/t lime. The prepared agglomerates were then placed on
platforms, and after a curing period of 72 hours, irrigation began and was completed for
60 days. The heap leach pad was prepared with compacted ground and impermeable clay
layers, with primary berms constructed around each pad. Dripper tubes were used to distribute
cyanide solution evenly. Solution samples were analyzed for gold content befor e and after
adsorption. The pilot heap tests were aimed to simulate leaching response, showing
amenability to heap leaching. Gold recovery rates for Sewum and Boin heaps increased rapidly
in the first 20 days, reaching 78.6% and 73.2% respectively, then continued at a moderate pace
until day 40, achieving 91.7% for Sewum and 85.6% for Boin. After 60 days, ultimate recoveries
were 93.5% for Sewum and 90.3% for Boin. Two composite tailings samples were collected
from each heap, averaging 0.06 grams per tonne gold ("g/t Au") and 0.12 g/t for Sewum and
Boin, respectively, confirming overall recoveries of +90%.
Comminution testwork consists of 10 samples tested with Jet -Rom Engineering Ltd. in
May 2023, and another 20 samples tested with Odeleb Ltd. in October 2023. Based on the
data available, the oxide material is soft, and the sulphide material is competent. Given the soft
nature of the oxide and transition material, this material is planned to be processed through a
mineral sizer rather than a crusher. This has allowed for a delay in crushing capacity installation
to year four, ahead of processing sulphide material.
Metallurgical testwork was also conducted on fresh mineralization. Bottle roll results for
sulphide material from the Nyam deposit returned an average gold recovery of 79% after
48-hours, ranging from 63% to 90%. Recovery curves indicated increasing trends, with
estimated final recoveries of >90% - 95% under optimized conditions. Five samples underwent
diagnostic leach, yielding consistent results with total recoveries averaging 94.9%. 14 samples
underwent optimization testing, incorporating finer grinding, lead nitrate addition, and oxygen
introduction and total recoveries increased by an average of +10% to reach 92%. Gold
mineralized samples contained no silver and low metal values.
- 7 -
Additional metallurgical test work is underway as part of the ongoing work program at Enchi,
including column tests to better simulate heap leach conditions and further test for optimal
crushing size, reagent consumption and leach permeability. The testwork completed to date
supports heap leach processing as a viable option for the extraction of gold, with moderate to
high overall gold recovery expected between mid-80’s to 90%.
Mineral Processing
A process flowsheet for the Project can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-process-flow-sheet.pdf
A processing throughput of 8.1 mtpa was selected. The process design is based on a phased
approach flowsheet aimed at maximizing gold recovery , and on minimizing initial capital
expenditure and operating costs. The main design criteria for equipment selection include d
suitability for duty, reliability and ease of maintenance. The plant layout provides ease of access
to all equipment for operating and maintenance requirements while facilitating ease of
concurrent construction in multiple areas.
The process design consists of the following process unit operations: one primary mineral sizer
to provide crushed feed with 80% passing (P80) of 40-50 mm; future installation of two trains of
two-stage crushing plant to provide crushed feed with a P80 of 19 mm when harder transition
and fresh feed is introduced in later years of the mine plan; agglomeration of the crushed feed
with cement and cyanide solution in a rotating drum to improve percolation within the leach
pad; grasshopper conveyors and radial stacker to stack crushed feed on the leach pad in
5 metre lifts; cyanide solution application on the stacked feed with a typical solution application
rate of 10 L/m 2/h applied during the first 40 days , reduced to 7 L/m 2/h thereafter; carbon-in-
column process to load activated carbon with gold from the pregnant solution drained from
the leach pad; barren, pregnant and excess solution ponds to accommodate pregnant solution
drain-down and to accommodate storm water; and refining equipment to produce a final doré
product.
Capital Costs
An initial capital expenditure of $106 million (including 20% contingency) has been estimated
to construct the Project, with a further $ 92 million in sustaining capital during operations and
$18 million for closure (including reclamation). The capital cost estimate is based on an open
pit mining and heap leach operation processing 8.1 mtpa utilizing contract mining.
- 8 -
Capital costs are detailed in the table below.
Table 4 – Capital Cost Estimate Details
Description Initial
($M)
Sustaining
($M)
Closure
($M)
LOM
($M)
Mining Areas & Road Development $4.2 $4.5 - $8.7
Heap Leach Facility (1) $9.9 $14.8 - $24.7
Earthworks & Pads $1.6 - - $1.6
Mechanical, Equipment & Piping $39.5 - - $39.5
Power, Electrical, Instrumentation $7.9 - - $7.9
Crusher Installation (2) - $57.7 - $57.7
EPMC (Engineering & Procurement) $9.3 - - $9.3
Construction Indirect Costs $7.8 - - $7.8
Owner’s Costs $7.8 - - $7.8
Closure Capital (3) - - $18.2 $18.2
Contingency (20.0%) $17.6 $15.4 - $33.0
Total Capital Costs $105.8 $92.4 $18.2 $216.4
Note: numbers may not add due to rounding.
(1) The heap leach facility will be built in three phases, with excess capacity available. The sustaining capital portion includes
$7.4 million in each of years three and six for the heap leach pad expansion.
(2) Crusher installation will be completed in years four and five, once required for processing fresh mineralization.
(3) Closure Capital includes environmental monitoring in the four years after production.
This capital cost estimate is based on industry standard estimates. Capital cost estimates were
developed using budgetary quotes provided by contractors experienced in Ghana, as well as
estimates updated to reflect current pricing since the prior PEA was completed in 2021.
Construction is estimated to be 15 months. The Enchi Gold Project benefits from relatively flat
terrain (rolling hills) and standard infrastructure, limiting the amount of earthworks required.
The initial capital costs reflect an estimate for the design and development of the plant and
mine infrastructure that includes agglomeration, heap leaching, processing ponds and a gold
recovery plant. The heap leach pads will be built in three phases, with excess capacity available.
$7.4 million is estimated in each of years three and six for the heap leach pad expansion.
Crusher installation will be completed in years four and five at a total cost of approximately
$58 million. The additional crushers will facilitate the transition from processing of oxide
material to processing of transitional and fresh rock mineralization in the second half of the
mine life.
Closure costs have been estimated based on the preliminary infrastructure plans and are
inclusive of an allowance for a robust rehabilitation program and continued monitoring and
care and maintenance for four years post completion of mining.