Spanish Mountain Gold Announces Larger Scale Preliminary Economic Assessment With a Base Case NPV5% After-Tax of C$1.0 Billion, 18.2 % IRR and 3.4 Year Payback at US$ 2,450/Oz Gold Price; at US$3,300/Oz Spot Gold Price NPV5% C$2.3 Billion, 32.0%...
Spanish Mountain Gold Announces Larger Scale Preliminary Economic
Assessment With a Base Case NPV5% After-Tax of C$1.0 Billion, 18.2 % IRR
and 3.4 Year Payback at US$ 2,450/Oz Gold Price; at US$3,300/Oz Spot Gold
Price NPV5% C$2.3 Billion, 32.0%...
VANCOUVER, British Columbia--(BUSINESS WIRE)--July 3, 2025--
Spanish Mountain Gold Announces Larger Scale Preliminary Economic Assessment With
a Base Case NPV5% After-Tax of C$1.0 Billion, 18.2 % IRR and 3.4 Year Payback at
US$ 2,450/Oz Gold Price; at US$3,300/Oz Spot Gold Price NPV5% C$2.3 Billion, 32.0%
IRR and 2.0 Year Payback; Including an Updated Mineral Resource Estimate for Its
Spanish Mountain Gold Project
Spanish Mountain Gold Ltd. (“Spanish Mountain” or the “Company”) (TSX-V: SPA;
FSE: S3Y; OTCQB: SPAUF) is pleased to announce the results of a Preliminary Economic
Assessment (“PEA”), including an updated mineral resource estimate (“MRE”), for the Spanish
Mountain Gold Project (the “Project”), located within central British Columbia, Canada. The
PEA is a conceptual study of the potential economic viability of the Main Deposit Mineral
Resource, that includes the Main Zone and North Zone. The PEA will be published in an
independent National Instrument (“NI”) 43-101 Technical Report within 45 days of this news
release and filed on SEDAR+. Once filed on SEDAR+, the PEA will supersede the Spanish
Mountain Gold Project Prefeasibility Study (“NI”) 43-101 Technical Report (PFS) dated May
31, 2021. The PEA study was commissioned by the Company and prepared by a consortium of
consultants led by Ausenco Engineering Canada ULC (“Ausenco”). The PEA envisions a
conventional open pit mining and milling operation with a projected 24.5-year life of mine
(“LOM”) producing 3 million ounces (“Moz”) of payable gold, with a front weighted production
profile and attractive economics. All currency amounts herein are in Canadian dollars unless
otherwise indicated.
President and CEO, Peter Mah stated:
"The re-envisioned, larger scale Spanish Mountain Gold Project and the completion of a new
robust, de-risked PEA with updated MRE marks a significant achievement for the Company’s
transformation from explorer to developer. With over 235,000 metres (“m”) of drill information
our confidence in the resource quality and proposed mine confirm our strategy to advance the
Project towards feasibility and ultimately a build decision by 2027. Project upside is supported
by drill success in 2024 to 2025 reinforcing the potential for new additional discoveries of high
grade near surface gold mineralization in prospective gold host rocks over the 10 km long
property wide corridor. With a regional setting of nearby experienced First Nations,
communities, currently producing mines, a power interconnection point near William’s Lake,
B.C. that is progressing through Stage 2 of B.C. Hydro’s system impact study, established
mining infrastructure plus workforce, and year round paved road access to within 6 km of the
Project site, the Project’s favourable location and jurisdiction speak volumes to the Project’s
overall quality and likelihood to advance to production. Spanish Mountain’s commitment to
create BC based jobs, business opportunities, and sustainable shared benefits for the First
Nation’s and surrounding communities has been demonstrated during the 2024-25 drill
programs. We’ve heard the First Nations’ and communities’ feedback regarding the environment
and are pleased to have found a way to address those shared concerns to derisking tailings,
waste, and water management. Considering the rising gold price environment supporting the
need to rapidly advance gold projects in Canada, and alongside the amazing regional support
we’ve received in British Columbia for the Project to date, we look forward to continuing to earn
support for our Project, while conserving and improving the economic sustainable value for all
stakeholders. Spanish Mountain Gold has a bright future ahead creating a new definition of
responsible sustainable mining that generations of Canadians will be proud of!”
Highlights
Robust Economics: Base case after-tax NPV5% of C$1,025 million with an after-tax
IRR of 18.2% using a gold price assumption of US$2,450/ounce (“oz”). Using a spot
gold price of US$3,300/oz gold, after-tax NPV5% increases to C$2,315 million and the
after-tax IRR to 32.0%.
Significant Production and Low Cost: 203,265 oz average annual gold production in
the first 5 years at an all-in sustaining cost net of by-product credits (“AISC”) of
US$1,024/oz and 122,041 oz average annual gold production over a 24.5-year LOM at an
AISC of US$1,338/oz.
Rapid Payback of Capital Expenditures: C$1,250 million initial capital paid back over
3.4 years at PEA base case and decreasing to 2.0 years at spot gold price of $3,300/oz
gold.
High Degree of Resource Confidence: Economic analysis is based on Measured and
Indicated Resources sub-totalling 33.3% and 65.1% respectively or grand total of 98.4%
but excludes potential upside opportunities from the 2025 drill results and MRE from the
Phoenix deposit.
Low Risk: Conventional open pit and milling operation with road access and hydro-
electric power.
New Innovative, De-risked Tailings Facility: Dry stack plus coarse free draining
tailings, waste and water management facilities that are integrated and significantly
reduce volume of tailings impacted runoff for treatment and discharge. The proposed
tailings facility includes 100% reuse of process water, avoids discharge near the Cedar
Point Provincial Park and minimizes the disturbance of fish bearing waters. The proposed
tailings facility utilizes feedback obtained from the First Nations, nearby communities
and industry to utilize best in class available environmental solutions that the Company
anticipates will significantly reduce risks at closure and promote protection of the land
and waterways to perpetuity.
Significant Opportunities: Potential to further enhance Project economics and expand
production rate have been identified with the addition of the maiden Phoenix deposit
MRE, ongoing endowment potential extensions and preconcentration technologies such
as mineralized material sorting to boost mill feed grade.
Strong Discovery Growth Potential: Exploration diamond drill programs completed in
2024 and 2025 extended gold mineralization and intercepted higher-grade mineralization
adjacent to Project infrastructure over a strike length in excess of 3 km.
Table 1: PEA Results Summary
Open Pit PEA Study Results 2025 PEA
Base Case
Spot Prices
(as of July 1, 2025)1
After-Tax NPV (C$M, 5% discount rate) $1,025 $2,315
After-Tax IRR (%) 18.2% 32.0%
Annual Average Free Cash Flow (C$M)4 $85 $173
Annual Average Free Cash Flow Yr. 1-5 (C$M)4 $311 $454
Initial Capex (C$M) $1,250 $1,250
Total Cash Cost (US$ / Au oz)2 $1,194 $1,201
AISC (US$ / Au oz)3 $1,338 $1,345
Payback Period (years) After-Tax 3.4 2.0
Nominal Processing Throughput (tpd) 26,000 26,000
Strip Ratio (waste:mill feed resource) 2:1 2:1
Mine Life (years) 24.5 24.5
Annual Average Throughput (Mtpa) 9,340 9,340
Annual Average Production (koz/a) 122 122
Average Gold Head Grade (g/t) 0.46 0.46
Average Gold Recovery (%) 89.3% 89.3%
Metal Prices (US$ / oz) $2,450 Au
$28.50 Ag
$3,300 Au
$36.00 Ag
Exchange Rate USD/CAD 1.35 1.35
Total LOM Au ounces produced (Moz) 3.0 3.0
Total LOM Ag ounces produced (Moz) 2.1 2.1
Notes for Table 1
1. Spot price is based on the LBMA gold price as of the close of business on July 1, 2025, rounded down to the
nearest $100/oz for gold and $1/oz for silver.
2. Cash Costs consist of mining costs, processing costs, mine-level G&A, offsite charges, and royalties less by-
product credits. Refer to the “Non-Gaap Financial Measures” section in Appendix B of this news release for
more information.
3. All-In Sustaining Costs (AISC) includes cash costs plus sustaining capital, closure costs, and salvage credits.
Refer to the “Non-GAAP Financial Measures” section in Appendix B of this news release for more information.
4. Free cash flow is calculated as after tax cash flow from mine-site operating activities less capital
expenditures, including closure costs (net of salvage value). Refer to the “Non-GAAP Financial Measures”
section in Appendix B of this news release for more information.
The economic analysis contained in this news release is preliminary in nature and is based
primarily on Measured and Indicated Mineral Resources totalling 33.3% and 65.1% respectively,
and in part, Inferred Mineral Resources totalling 1.6% of the proposed mill feed from the Main
deposit. Inferred Mineral Resources are considered too geologically speculative to have the
economic considerations applied to them that would enable them to be categorized as Mineral
Reserves. There is no certainty that economic forecasts on which this PEA is based will be
realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic
viability. Table 2 lists the breakdown by resource category of the run of mine (“ROM”) mill feed
for the PEA life of mine plan.
Table 2: ROM mill feed and ounces by resource category
Category ROM Mill Feed (Mt) ROM Au (Moz.) ROM Ag (Moz.)
Measured 76.2 1.22 1.62
Indicated 148.9 2.10 3.09
Total M+I 225.1 3.32 4.72
Inferred 3.7 0.03 0.05
Mineral Resource Estimate for the Main Deposit
Note: The Main Deposit is included in the financial modelling for the 2025 PEA.
The updated MRE for the Main deposit is based on the amalgamation of what have been
historically described as the Main Zone, North Zone, Slipper Zone, and K Zone, effective
January 10, 2025, and it is reported at a 0.15 g/t gold cut-off (see Table 3). There is no certainty
that Mineral Resources will be converted into Mineral Reserves. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. Mineral Resources include
Inferred Mineral Resources which have had insufficient work to classify them as Indicated
Mineral Resources. It is uncertain but reasonably expected that Inferred Mineral Resources could
be uplifted to Indicated Mineral Resources with additional drilling.
Geological and resource domain modelling and estimation for the Project was completed using
Leapfrog 2024.1. The lithological model was developed based on data from the extensive re-
logging program of 170,000 m drill core that was completed in 2023 and 2024, in addition to
geochemical classification of 56,550 previously sampled intervals. Mineralization domains are
modelled by identifying zones with gold values greater than 0.3 g/t over a minimum width of 3
m. Two primary styles of mineralization were recognized. Early mineralization includes
disseminated stratabound mineralization in argillite-bearing lithologies. Late mineralization
includes gold associated with late-stage quartz veins. Three high-confidence faults were
modelled, including the North Fault, South Fault, and Fault 1. The Main Block is bound by the
North and South Faults, representing significant discontinuities in stratigraphy and
mineralization. Within the Main Block, Fault 1 introduces a minor offset in the main block.
Reasonable prospects for eventual economic extraction were evaluated by performing a pit
optimization using the Lerchs-Grossman algorithm with the following parameters: gold price of
US$2,400/oz, silver price of US$30/oz, and gold selling costs of C$7/oz for offsite charges, and
a 1.5% royalty. Mining costs for mineralized material and waste are C$3.75/t, with incremental
mining costs of C$0.03/t. Processing costs are C$12/t for mill processing and include site G&A.
Payability for gold is 99.8%, and payability for silver is 90%. Process recovery for gold is 90%,
while process recovery for silver is 50%. The exchange rate used is C$0.73 to US$1.
Total Measured and Indicated Mineral Resources for the Main deposit includes 292.1 Mt at an
average grade of 0.44 g/t gold and 0.66 g/t silver, for a total of 4.2 M contained ounces of gold
and 6.2 M contained ounces of silver. Total Inferred Mineral Resources for the Main deposit
includes 14.8 Mt at an average grade of 0.33 g/t gold and 0.95 g/t silver, for a total of 0.2 M
ounces of gold and 0.5 M ounces of silver.
Table 3: Mineral Resource for the Main deposit
Category Cut-off Grade Tonnes (kt) Au Avg. Grade Au (koz) Ag Avg. Grade Ag (koz)
Measured 0.15 77,370 0.53 1,321 0.68 1,701
Indicated 0.15 214,702 0.41 2,842 0.65 4,463
Measured & Indicated 0.15 292,072 0.44 4,163 0.66 6,163
Inferred 0.15 14,830 0.33 155 0.95 454
Notes for Table 3:
5. The qualified person responsible for the Main deposit MRE, with an effective as of as of January 10, 2025, is
Bahram Bahrami, P.Geo of Equity Exploration Consultants Ltd.
6. Mineral Resources are classified in accordance with CIM (2014) definition standards
7. Bulk density assigned on a block per block basis
8 . Mineral Resources are reported using a 0.15 g/t gold cut-off grade
9. Metal price assumptions include US$2,400/oz Au and US$30/oz Ag
10. Metallurgical recoveries assumptions are 90% recovery for gold and 50% for silver.
11. 99.8 payability for gold and 90% for silver
12. Numbers may not add due to rounding
13. Mineral resources are not Mineral reserves and do not have demonstrated economic viability.
14. The qualified persons responsible for this section of the technical report are not aware of any
environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors
that could materially affect the Mineral Resource estimate other than those disclosed in this news release and in
the PEA Technical Report.
Mineral Resource Estimate for the Phoenix Deposit
Note: The Phoenix Deposit is not included in the financial modelling for the 2025 PEA.
The inaugural MRE for the Phoenix deposit is reported at a 0.20 g/t gold cut-off. Total Indicated
Mineral Resources for the Phoenix deposit include 0.05 Mt at an average grade of 0.35 g/t Au,
for a total of 0.6 thousand ounces (koz) of contained gold. Inferred Mineral Resources include
25.4 Mt at an average grade of 0.44 g/t Au, for a total of 357 koz of contained gold (see Table 4).
Table 4: Mineral Resources for the Phoenix deposit
Resource
Classification
Cut-off Grade
(Au, g/t)
Tonnes
(kt)
Gold Grade
(Au, g/t)
Contained Gold
(Au, koz)
Indicated 0.2 52 0.35 0.57
Inferred 0.2 25,426 0.44 357
Notes for Tables 4 and 5:
1. The qualified person responsible for the Phoenix deposit MRE, with an effective as of as of June 17, 2025, is
Bahram Bahrami, P.Geo of Equity Exploration Consultants Ltd.
2. Mineral Resources are classified in accordance with CIM (2014) definition standards
3. Mineral Resources are reported using a 0.20 g/t gold cut-off grade
4. Metal price assumptions include US$2,400/oz Au
5. Metallurgical recoveries assumptions are 90% recovery for gold
6. 99.8 payability for gold
7. Numbers may not add due to rounding
8. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
9. The qualified persons responsible for this section of the technical report are not aware of any environmental,
permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could
materially affect the Mineral Resource estimate other than those disclosed in this news release and in the PEA
Technical Report
10. Refer to Appendix C for the estimation methodology
Geological and resource modelling for the Phoenix deposit was completed using Leapfrog
2024.1 and Micromine Origin & Beyond 2025. The lithological model was developed based
solely on geochemical classification, with six principal stratigraphic units identified: Upper
Mafic Tuff, Upper Sedimentary Sequence, Lower Mafic Tuff, Intermediate Sedimentary
Sequence, Intermediate Tuff, and Lower Sedimentary Sequence. These units generally dip gently
to the northeast. A steeply dipping north-south trending fault divides the Phoenix deposit into
eastern and western blocks. The eastern block contains the full stratigraphic sequence, while the
western block includes only the two lowermost stratigraphic units found in the eastern block.
Gold mineralization was modelled based on downhole structural data measured from oriented
drill core. This interpretation includes identifying two principal sets of mineralized structures:
flat to gently east-dipping and steeper northeast-dipping orientations. These define three
mineralized lenses—two upper, gently dipping zones and a deeper, steeper-dipping zone.
Capping values for the Phoenix deposit were determined using decile analysis and log-scaled
probability plots of length-weighted gold assays. Outlier restrictions were applied to lithological
domains during the second estimation pass, excluding samples above 0.2 g/t gold where search
distances exceeded 30% of the variogram range. No outlier restrictions were applied to
mineralized domains. A semi-hard boundary approach was applied to specific lithological
contacts reflecting gradational contacts of lithological units. These included the Lower
Mineralized Zone (Domain 630) with a distance threshold of 5 m, the Lower Mafic Tuff with 15
m, and the Lower Sedimentary unit with 50 m. This approach was used to reduce artefacts and
better represent grade continuity in stratigraphically complex or sparsely drilled areas.
The block model was constructed using a parent block size of 5m x 5m x 5m, with sub-blocks
refined down to 1.25 m to accurately honor geological boundaries and minimum mining widths.
Grade estimation was conducted using a combination of Ordinary Kriging (OK) and inverse
distance cubed (ID3) methods. OK was used for all mineralized domains where variograms
could be reliably modelled; ID3 was applied to other domains where variogram stability could
not be achieved. Locally varying anisotropy (LVA) was applied within mineralized domains to
reflect observed structural controls.
Resource classification followed the CIM Definition Standards (2014) and was guided by
geological confidence, data spacing, and estimation support. The current drilling density supports
predominantly Inferred classification. These are supported by at least two drill holes within a
spacing of ≤155 m. Indicated Mineral Resources are supported by drill hole spacing of ≤70 m
with minimum of 3 drill holes used for estimation.
Reasonable prospects for eventual economic extraction were applied by performing a resource
pit optimization and applying the following parameters: a gold price of US$2,400/oz, gold
selling costs of C$7/oz for offsite charges, a 1.5% royalty, Mining costs of C$3.75/t with
incremental costs of C$0.03/t, and combined processing and site G&A costs of C$12/t. Gold
payability was assumed to be at 99.8%, with a metallurgical recovery of 90%. The exchange rate
used was C$0.73 to US$1.00. No by-product metals were included in the estimate.
For Phoenix, a cutoff grade of 0.20 g/t gold is used due to limited metallurgical data compared to
the Main deposit. This higher cut-off accounts for increased geological and metallurgical
uncertainty for the Phoenix deposit. Cut-off sensitivities of the Phoenix deposit mineral resource
are summarized in Table 5.
Table 5: Mineral Resource for the Phoenix deposit at varying gold cut-off grades
Resource
Classification
Cut-off Grade
(Au, g/t)
Tonnes
(kt)
Gold Grade
(Au, g/t)
Contained Gold
(Au, koz)
Indicated
0.15 96 0.27 0.8
0.2 52 0.35 0.6
0.25 35 0.41 0.5
0.3 23 0.47 0.4
Inferred
0.15 33,451 0.37 402
0.2 25,426 0.44 357
0.25 20,152 0.49 319
0.3 16,827 0.54 290
Notes: See Table 4
Spanish Mountain Project Consolidated Mineral Resources
Total combined Mineral Resources for the Spanish Mountain Gold Project are summarized in
Table 6. Total Measured and Indicated mineral resources include 292.1 Mt at 0.44 g/t gold for
total 4.16 M contained gold ounces. Total inferred mineral resources include 40.3 Mt at 0.40 g/t
gold for total 512 k contained gold ounces.
Table 6: Consolidated Mineral Resources for the Spanish Mountain Gold Project
Area Classification
Cut Off Gold
Grade
(g/t)
Tonnes
(Mt)
Gold
(g/t)
Contained
Gold
(koz)
Silver
(g/t)
Contained
Silver
(koz)
Main Deposit
Measured
0.15
77.4 0.53 1,321 0.68 1,701
Indicated 214.7 0.41 2,842 0.65 4,463
M&I 292.1 0.44 4,163 0.66 6,163
Inferred 14.8 0.33 155 0.95 454
Phoenix Deposit
Indicated
0.20
0.1 0.35 0.58 - -
Inferred 25.4 0.44 357 - -
Total Spanish
Mountain Gold Project
M&I
292.1 0.44 4,164 0.66 6,163
Inferred 40.3 0.40 512 0.95 454
Notes on Table 6:
1. The Mineral Resource for the Main Deposit is reported using a cut-off grade of 0.15 g/t Au, while the Phoenix
Deposit uses a 0.20 g/t Au cut-off.
2. The Mineral Resources are constrained within an optimized pit shell generated using Lerchs–Grossman pit
optimization based on a gold price of US$2,400/oz, 99.8% payability, 90% gold recovery, C$12/t processing
and G&A, C$3.75/t mining for ore and waste, C$0.03/t incremental mining cost, 1.5% royalty, C$7/oz offsite
charges, and an exchange rate of 0.73:1 (CAD:USD).
3. Mineral Resources are derived from resource statements for each deposit and area, prepared by Bahram
Bahrami, P.Geo., a Qualified Person as defined under NI 43-101.
4. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
5. The Mineral Resource estimate complies with NI 43-101 Standards of Disclosure for Mineral Projects (May
2016) and CIM Definition Standards for Mineral Resources and Mineral Reserves (May 2014).
6. Any discrepancies in totals are due to rounding.
7. The effective date of the Mineral Resource statement is January 10, 2025 for the Main Deposit and June 17,
2025 for the Phoenix Deposit.
Mining and Processing
Open pit mine designs, mine production schedules and mine capital and operating costs have
been developed for the Main deposit, at a scoping level of engineering. The mineral resources,
including inferred resources, form the basis of the mine planning. The Phoenix deposit MRE are
not included or considered as part of the mine plan.
Open pit mining activities are designed for approximately 24.5 years of operation. Mine planning
is based on large scale conventional drill/blast/load/haul open pit mining methods suited for the
Project location and local site requirements. The subset of mineral resources contained within the
designed open pits are summarized in Table 7, with a 0.2 g/t Au cut-off grade, and form the basis
of the mine plan and production schedule, which is summarized in Figure 5.