Spanish Mountain Gold Announces Project Objectives for 2020
1120‐1095 West Pender Street
Vancouver, British Columbia, V6E 2M6
Tel: 604.601.3651
February 27, 2020
Spanish Mountain Gold Announces Project Objectives for 2020
Vancouver, B.C. ‐ Spanish Mountain Gold Ltd. ( t h e “ C o m p a n y ” ) ( T S X ‐ V : S P A ; O T C ‐ S P A Z F ) i s
pleased to provide a corporate update on its 100% owned Spanish Mountain gold project (the
“Project”) located in central British Columbia, Canada. In 201 9 the Company completed a
Preliminary Economic Assessment (the “ PEA”) for the Project, the positive results of which were
announced in a news release dated October 23, 2019 followed by a NI 43‐101 Technical Report
filed on December 4, 2019.
The PEA, the results of which are summarized below, was complet ed assuming a 10,000 tonnes
per day (“tpd“) throughput and a base‐case gold price of US$1,2 75/ounce. With the gold price
currently being well over US$1,6 00/ounce, the Company intends t o accelerate project activities
as quickly as possible with the objective of achieving major mil e s t o n e s f o r t h e P r o j e c t b y t h e
end of the year. Plans are currently being completed for a fie ld‐work and cost study program
that will be executed this summer in order to further de‐risk t he Project and that will provide
increased confidence in the highly positive results delivered un d e r t h e P E A . D e t a i l s o f t h e
program will be provided as work proceeds.
Financial Analysis
As reported in the October 23, 2019 new release, the PEA demons trates the potential viability
o f t h e P r o j e c t ’ s P h a s e I o p e r a t i o n t h a t e n v i s a g e s a l o w ‐ c o s t , owner‐operated open pit mine
processing 39 million tonnes of material (all from Measured & Indicated resource) over an
eleven‐year period at an average diluted grade of 1.00 gram/tonne gold (g/t Au) and a 91%
metallurgical recovery of gold.
H i g h l i g h t s o f t h e P E A a r e a s f o l l o w s ( a l l a m o u n t s a r e i n C a n a d ian dollars unless otherwise
indicated; base case is stated using a gold price of US$ 1,275 per ounce and an exchange rate of
$C1.00 equal US$0.75):
This first phase of operation has a mine life of 11 years with peak production of 130,000
ounces per annum (Year 4) and an average LOM annual production of 104,000 ounces of
gold for a total of 1,145,000 ounces
Initial capital is estimated to be C$364M (or US$273M), which includes a contingency of
C$42M. Sustaining capital over the life of the mine is estimated to be C$58M
Average metallurgical recovery of gold is 91%
Selected operational and cost metrics are shown in the table below:
Unit
Year 1 – 5
Average
Life of Mine
Average
Gold Grade g/t 1.13 1.00
Recovery % 91 91
Annual Gold Production Koz 116 104
Cash Cost / oz US$ 481 511
All‐in‐sustainable Cost / oz US$ 519 549
Total Cost / oz US$ 776 807
Sensitivity analysis of the base case illustrates the potential impact of increasing gold price:
Select Gold Price (US$ per oz)
Units $1,100 $1,200 $1,275 $1,450 $1, 500 $1,600 $1,700 $1,800
Pre‐tax:
NPV at 5% C$mm $232 $336 $414 $596 $648 $752 $856 $960
Internal Rate of Return
(IRR) % 16% 20% 23% 29% 31% 34% 37% 40%
Payback of Initial Capex Years 4.3 3.8 3.5 2.9 2.8 2.6 2.4 2.2
Post‐tax:
NPV at 5% C$mm $201 $274 $325 $443 $476 $543 $609 $676
Internal Rate of Return
(IRR) % 15% 18% 21% 26% 27% 30% 32% 35%
Payback of Initial Capex Years 4.3 3.8 3.5 3.0 2.9 2.6 2.4 2.3
Larry Yau, CEO, commented: "The 2019 PEA clearly provides a reasonable basis for the Company
to advance the Project and with the current gold price environment being well over the base
case assumption we intend to proceed in a determined manner.
“O ur pro jec t has an env iable co mbinatio n o f relativ el y mo des t initial capex and projected low
all‐in‐sustainable cost (AISC per ounce), which makes it one of t h e m o s t c o m p e l l i n g
development stage projects in the industry.”
The PEA was prepared by Moose Mountain Technical Services under t h e d i r e c t i o n o f M a r c
Schulte, P. Eng., a Qualified Person, following the guidelines of the Canadian Securities
Administrators National Instrument 43‐101 and Form 43‐101F1. M r. Schulte is independent of
the Company and has reviewed and approved this news release.
Please refer to the Company’s updated website and corporate pre sentation for additional
details on the PEA and the project: www.spanishmountaingold.com
About Spanish Mountain Gold
Spanish Mountain Gold Ltd. is focused on advancing its flagship Spanish Mountain gold project
in southern central British Columbia. The Company has prioriti zed the development of the first
phase of the Project in which the pit‐delineated high‐grade cor e of the deposit is expected to
sustain a stand‐alone operation of 11 years. The potential via bility of the Project’s Phase 1 has
b e e n d e m o n s t r a t e d i n a P r e l i m i n a r y E c o n o m i c A s s e s s m e n t . A d d i t ional information about the
Company is available on its website: www.spanishmountaingold.com
On Behalf of the Board,
SPANISH MOUNTAIN GOLD LTD.
Larry Yau,
Chief Executive Officer
Inquiries:
SPANISH MOUNTAIN GOLD LTD.
Phone: (604) 601‐3651
E‐mail: [email protected]
FORWARD LOOKING STATEMENTS: Certain of the statements and infor mation in this press release
constitute "forward‐looking statements" or "forward‐looking inf ormation" Any statements or
information that express or involve discussions with respect to predictions, expectations, beliefs, plans,
projections, objectives, assumptions or future events or perfor mance (often, but not always, using
words or phrases such as "expects", "anticipates", "believes", "plans", "estimates", "intends",
"targets", "goals", "forecasts", "objectives", "potential" or v ariations thereof or stating that certain
actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or
the negative of any of these terms and similar expressions) are n o t s t a t e m e n t s o f h i s t o r i c a l f a c t a n d
may be forward‐looking statements or information.
The Company's forward‐looking statements and information are ba sed on the assumptions, beliefs,
expectations and opinions of management as of the date of this press release, and other than as
required by applicable securities laws, the Company does not as sume any obligation to update forward‐
looking statements and information if circumstances or manageme nt's assumptions, beliefs,
expectations or opinions should change, or changes in any other events affecting such statements or
information. For the reasons set forth above, investors should not place undue reliance on forward‐
looking statements and information.
Cautionary Note Regarding Preliminary Economic Assessment
Preliminary Economic Assessment summarized herein is preliminar y in nature and is based on measured
and indicated mineral resources. A measured or indicated minera l resource is that part of a mineral
resource for which quantity, grade or quality, densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application o f Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic viability of the deposit. Mineral resources, that
are not mineral reserves, do not have demonstrated economic via bility. There is no certainty that the
PEA will be realized.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.