Mawson Delivers US$211 million NPV5 (post-tax) from Rajapalot PEA
1305 – 1090 West Georgia Street, Vancouver, BC, V6E 3V7
Phone: +1 604 685 9316 / Fax: +1 604 683 1585
NEWS RELEASE October 20, 2022
Mawson Delivers US$211 million NPV5 (post-tax) from Rajapalot PEA
Vancouver, Canada — Mawson Gold Limited (“Mawson” or the “Company”) (TSX:MAW) (Frankfurt:MXR)
(PINKSHEETS: MWSNF) is pleased to announce the results of the maiden preliminary economic assessment (“PEA”) on
its 100% owned Rajapalot gold-cobalt project (“Rajapalot”, or the “Project”) in northern Finland. The PEA considers a target
1.2 million tonnes per annum underground mining operation over a period of 9 years with an on-site processing facility to
produce gold doré and cobalt concentrate. (Unless otherwise stated, all currency references are in US dollars)
Highlights:
➢ Robust economics underscores significant value of current resource base
o $211 M post-tax NPV5 (real) using $1,700/oz gold (“Au”) and $60,000/t cobalt (“Co”)
o AISC1 $824/oz Au life of mine (“LoM”)
o >92 koz gold equivalent “AuEq2” steady state average production rate. 9 year LoM producing ~700 koz Au
and ~2800 t Co
➢ A significant European mine
o If in production today, Rajapalot could be the EU’s third largest cobalt mine and sixth largest gold mine
o Ethical metals sourcing with majority local support and 100% renewable power
➢ 27% post tax IRR, $191 M initial capex
o Strong cashflows, with $338 M free cash flow in years 1 to 5, and $101 M in LoM cobalt by-product revenues
➢ 100% owned low-cost project in Tier 1 location
o Underground only operation, utilising predominately long hole open stoping
o 95% Au recovery with conventional gravity-CIL
o Low infrastructure needs
➢ PEA underpins project to leverage substantial resource growth potential
o Rajapalot deposits are all open at depth, highlighted by the deepest intersection in Palokas of 30.8 m @ 5.1
g/t AuEq from 553 m (announced August 3, 2021).
o 18,000 ha land package with undrilled target s between the project area and other significant gold
occurrences such as the Rompas discovery (highlight 6 m @ 617 g/t Au, announced May 31, 2012 ) 8 km
west of Rajapalot.
1. AISC is a non-IFRS metric. For definition see Technical Background section below.
2. AuEq production figures calculated using metal prices $1,700/oz Au and $60,000/t Co. AuEq = Au oz + (Co t x 35.3).
2
Mr. Fairhall, CEO of Mawson Gold, comments
“This is the first project wide techno-economic assessment that underpins the significant value of Rajapalot
– to Mawson, and to Europe. These incredibly robust results demonstrate a clear case for a mine at Rajapalot
and bring out its quality fundamentals: a deposit with high mining and metallurgical efficiency which results
in over 80% of every ounce found converted into doré, at an extremely attractive AISC of $824/oz Au. The
production of ethical cobalt to EU environmental standards, critical for global and European energy transition,
strengthens the strategic attractiveness of the project.
Finland is not only one of the world’s lowest risk jurisdictions – it is also a great place to build and operate
a mine, with an established mining industry, competitive labour and energy cost base, fantastic infrastructure
and low taxes – all permanent features benefiting this starter case, and beyond , as more ounces are
discovered on the property”.
Want to learn more?
Across 3 videos now on the Mawson website, CEO Ivan Fairhall
provides an overview of the PEA, and discussion on both the
economics of the project, and also the physical aspects of the project.
www.mawsongold.com/media
The PEA for Rajapalot was prepared by independent consulting firm SRK Consulting (Finland) Oy (“SRK”) with contributions
from several Qualified Persons with specific subject matter expertise including local consultancy Sweco Oy for process plant
and infrastructure design and cost estimating, AFRY for mineral resource estimation , Paterson & Cooke Nordic AB for
backfill, and Vahanen Environment for environmental and social assessment.
The Mineral Resource estimate included in the PEA is reported according to the clarification criteria set out in the Canadian
Institute of Mining, Metallurgy, and Petroleum Definition Standards for Mineral Resources and Reserves (“CIM Definition
Standards”). These standards are internationally recognized and allow the reader to compare the Mineral Resource with
that reported for similar projects.
The results of the PEA will be set forth in an independent technical report prepared in accordance with National Instrument
43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) which will be filed on SEDAR under the Company’s profile
within 45 days of the date of this news release.
Readers are cautioned that the PEA is preliminary in nature and is intended to provide an initial assessment of the project’s
economic potential and development options. The PEA mine schedule and economic assessment includes numerous
assumptions and is based on inferred mineral resources. Inferred resources 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 th at the PEA results will be realized. Mineral resources are not mineral reserves and do not have
demonstrated economic viability. Additional exploration will be required to potentially upgrade the classification of the
inferred mineral resources to be considered in future advanced studies.
3
PEA Summary
Table 1: PEA operating and financial metrics
Production Input Life of Mine Financial Metric Life of Mine
Mill Feed (underground) Mt ROM 10.1 Au Price $/oz 1,700
Annual Throughput Mt/a 1.2 Co Price $/t 60,000
Life of Mine years 9 EUR:USD - 1.1
Gold Head Grade g/t Au 2.26 Discount rate % 5%
Gold Content koz 736 Corp tax rate % 20%
Feed to Co Processing1 Mt 6.1 Depreciation rate % 25%
Cobalt Head Grade ppm 529
Sulphur Head Grade % 2.07% Capex (initial / sustaining) $M 191 / 100
Cobalt Content t Co 3,203 Opex $M 566
Gold Recovery % 95% Revenue $M 1,286
Cobalt Recovery % 88% Gold $M 1,185
Sulphur Recovery % 88% Cobalt $M 101
Ave EBITDA (years 2-8) $M 84
Production Output Y 2-8 LoM After tax FCF (years 1-5) $M 338
Gold Production koz Au 82 699
Cobalt Production kt Co 306 2,806 Pre-tax NPV5 $M 271
AuEq Production koz AuEq 92 798 Pre-tax IRR % 30%
Cobalt Concentrate kt (dry) 34 314
Cobalt Con grade % Co 0.89% Post-tax NPV $M 211
Post-tax IRR % 27%
C1 $/oz Au 670 Post-tax payback years 2.9
AISC $/oz Au 824
1. Proportion of mined material assessed as producing favourable economic outcome when campaign processed through flotation
Au Price
(US$/oz)
Post-tax NPV ($M) Post-tax IRR
base case
Y1-5 FCF ($M)
base case base case capex -10% capex +10% opex -10% opex +10%
$1,400 89 112 66 106 72 15% 234
$1,550 150 173 128 167 133 21% 286
$1,700 211 234 189 228 195 27% 338
$1,850 272 295 250 289 255 32% 390
$2,000 333 356 310 350 316 37% 442
4
Figure 1: Rajapalot free cash flow (post-tax)
Figure 2: Rajapalot PEA annual gold production benchmarked to 2021 EU gold producers
-250
-150
-50
50
150
250
350
-150
-100
-50
0
50
100
150
-2 -1 1 2 3 4 5 6 7 8 9 10
Cumlative FCF ($M)Annual FCF ($M)
Year
Post-Tax FCF (annual) Post-Tax FCF (cumulative)
0
50
100
150
200
250
koz/a Au
Source: S&P Global Market Intelligence
5
Mining
Mining of Rajapalot is envisaged as an underground only operation . The Rajapalot deposit s comprise 5 bodies within an
area of approximately 3 km from West to East and 2 km from South to North , which commence from outcrops to 100 m
below the surface, to a maximum depth of around 600 m (Figures 3 and 4). Each of the near surface deposits are planned
to be individually accessed through decline box cuts. Two deposits, Palokas and Raja, contribute 87% of the run of mine
(“ROM”) tonnes and 91% of the gold ounces to LoM inventory.
Figure 3: Plan view of the Rajapalot deposits and site layout
A total ROM tonnage of 10.1 Mt is estimated (Table 2). The primary mining method selected for the Project is longhole
open stoping (“LHOS”) with 20 m level spacing and applied to the Palokas, Raja, Hut and Rumaj ärvi deposits. Stopes are
mined in the transverse direction to deposit strike in wider sections of the deposit, and as longitudinal stopes in narrow
sections. Paste backfill is used to maximize mining extraction and reduce the tailings storage requirements on surface .
There is also local demand for the mine waste rock.
The mining method selected for the Joki East deposit is cut and fill due to its shallower dip angle with cemented rock fill.
In total approximately 40% of the extracted mineral resource is returned to underground voids as fill.
Individual ventilation designs have been developed for each deposit with vent raises and escape ways integrated within the
mine development schedule.
An NSR Cut-off Value (“CoV”) of approximately $52 per mined tonne was applied for the Rajapalot stope optimization,
based on initial operating cost estimates for mining, processing and G&A. The Deswik Stope Optimizer module was used to
6
generate mineable shapes with applied modifying factors (mine dilution and losses) to quantify the ROM inventory used as
a basis for the LoM schedule.
Table 2: PEA ROM tonnage
Deposit ROM (Mt) Au (g/t) Co (ppm) Au (koz) Co (t)
Palokas 6.1 2.24 379 438 2,303
Raja 2.8 2.58 305 231 846
Joki East 0.4 2.87 225 37 90
Hut 0.6 1.19 267 22 152
Rumajärvi 0.3 0.98 388 10 118
Total 10.1 2.26 347 736 3,509
Cobalt Feed 6.1 529 - 3,203
Figure 4: Plan (left) and orthogonal (right) views of the Rajapalot stopes and mine development
The proposed Rajapalot mine targets a ROM production rate of 1.2 Mt/a through combined mining of 3 deposits at any one
time to meet the target annual tonnage (Figure 5). The annual production schedule, which makes allowance for ramp up,
is used to derive an equipment fleet schedule including c ommissioning and replacement periods over the duration of the
operation. Fixed and variable l abour is estimated for each annual period based on the development, production and
equipment schedule. The mine operating cost estimate assumes an owner-operator approach, as is typical in Finland, with
mine equipment purchased via a lease-to-own strategy on typical industry terms.
There has been no hydrogeological assessment of the deposit bedrock. However, a preliminary mine dewatering model was
developed and calibrated using hydrological parameters from other regional projects and similar geological settings. The
base case inflow estimate for the mine complex ranges between 27 L/s and 32 L/s. Mine and surface water infrastructure
has been provided to cater for these as a nominal flow rate.
N
Oblique view projected onto NE-SW
section, viewed to the SE
7
Figure 5: ROM Schedule
Metallurgy and Processing
The Company has completed several phases of metallurgical test work, which highlight free gold mineralization with high
cyanide soluble gold recoveries, and amenability for cobalt upgrading to a flotation concentrate.
ROM material will be assessed against an economic cut -off for cobalt extraction, be separately stockpiled, and campaign
processed. All feed will be processed for gold recovery but only a proportion, on a feed campaign basis, for cobalt recovery.
The selected flowsheet (Figure 6) for the PEA consists of a conventional crushing and grinding circuit with integrated gravity
gold recovery unit, followed by carbon-in-leach (“CIL”) cyanide leaching of gold with carbon acid was h, stripping,
electrowinning and smelting to produce gold doré on site. Residual cyanide in the slurry would be destroyed (‘detoxification’)
using the INCO process ahead of downstream processing.
Following detoxification, the material would be delivered either directly to tails processing, or in the case of cobalt rich feed,
to the flotation plant which would consist of roughing and cleaning stages, and concentrate filtration, to produce a
marketable cobalt concentrate. Concentrate would be loaded into highway trucks for year-round road transport as is typical
at other Finnish base metals operations.
The proposed processing plant is d esigned with a nominal throughput capacity of 1.2 Mt ROM feed tonnes per year and
would incorporate modern automation and controls as well as extensive duty and standby pumps to ensure high availability.
High quality European equipment forms the cost base, including a full crushing circuit from Sandvik and a complete
grind/leach-elution/float package from Metso-Outotec.
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1 2 3 4 5 6 7 8 9
ROM Grade (g/t Au, ppm Co/100)
Annual ROM (Mt)
Year
PALOKAS RAJA JOKI EAST
THE HUT RUMAJARVI
ROM Grade (ppm Co/100) ROM Grade (g/t Au)
8
Figure 6: Major process flow diagram
Key findings from PEA stage metallurgical test work, which underpins the plant design and economic criteria including
recoveries and reagent consumptions, are:
• Geometallurgical analysis had identified two distinct feed types designated “Raja-South Palokas” (R-SP) and Palokas
(Pal). Separate composite samples of each type were selected, prepared, and tested separately. Although roughly
aligned with designated mining domains, this is not exclusively so, as the metallurgical -type classification is based
on defined mineralogical characteristics and ratio of sulphur to cobalt in the feed.
• Mineralogical examination of the feed type samples showed that the materials were distinguished by differences in
silicate mineral occurrence. The R-SP sample had significant cobalt as Cobaltite, whereas the Pal sample had very
minor cobaltite. Both types had cobalt intimately associated with iron-sulphide minerals – pyrrhotite and pyrite. For
the Pal sample the latter was the dominant occurrence of cobalt.
• Comminution results classified samples as “slightly abrasive”, and “medium” with respect to coarse and fine
grindability.
• Gravity recoverable gold was identified for both types, with typical recoveries ranging from 10% to 18%. Gravity
recovery of gold was shown to be beneficial in consistently achieving high gold leach recovery.
• Combined gravity plus leach gold recover ies of the order of 95% was demonstrated for both feed types, at a P80
grind of 75μm and leach residence time of ~30 hours. Reag ent consumptions were in the normal range of
expectations.
• Flotation testing of both mineral types demonstrated that high recoveries of cobalt can be achieved with appropriate
pulp chemistry and collector additions. For the R -SP sample a simple rougher -cleaner flotation (non -optimised)