Wolfden Announces Robust Preliminary Economic Assessment for Pickett Mt. Project in Maine
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Wolfden Announces Robust Preliminary Economic Assessment
for Pickett Mt. Project in Maine
Thunder Bay Ontario, September 14, 2020 – Wolfden Resources Corporation (WLF:V) (“Wolfden” or the
“Company”) is pleased to announce the positive results of an independent Preliminary Economic Assessment (the
“PEA”) for its wholly owned Pickett Mountain high-grade polymetallic project in Northeastern Maine.
The Base Case Financial Model Yields:
• After-tax IRR of 37%
• After-tax NPV8% of US$198 million to Wolfden for an underground mine plan scenario
• Initial capital expenditure of US$147.4 million including 20% contingency and closure costs
• Payback 2.4 years
The PEA financial model used consensus metal prices assumptions of $1.15/lb Zinc, $1.00/lb Lead, $3.00/lb Copper,
$18.00/oz Silver and $1,500/oz Gold. Full details of the Preliminary Economic Assessment in the form of a technical report
for the purposes of NI 43-101 will be filed on SEDAR within the next 45 days. All financial figures are in US dollars.
“The PEA underscores our belief that the solid economics of the Pickett Mt. Project and its resource are still largely
unrecognized by investors and not reflected in the current market cap italization of the company ,” stated Ron Little
President and CEO of Wolfden. “With base metal prices moving higher, these results reaffirm our commitment to
increase and upgrade the mineral resources through aggressive exploration and to further de -risk the project with our
ongoing pre-permitting efforts and additional technical and baseline studies.”
“The Pickett Mountain deposit represents one of North America’s highest-grade undeveloped polymetallic deposits with
fundamentals that are indicative of a top quartile project, including one of the lowest C1 Costs $0.38/lb zinc (Net Direct
Cash Cost) in our sector,” stated Jeremy Ouellette Vice President of Project Development. “With this kind of a break -
even zinc price, the project can sustain metal price market declines that have not been seen in decades. In addition, the
project is extremely well located close to infrastructure and services yet is far enough removed from the nearby towns
(10 miles) with a site location that exhibits very low environmental and social impacts. The project is expected to
generate over 100 full time jobs and add significantly to the local and state economies.”
Summary of Base Case Financials
The PEA for NI 43 -101 purposes, is considered preliminary in nature which includes inferred resources within the
economic analysis 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 preliminary economic
assessment will be realized. The Base Case assumptions include revenues using $1.15/lb Zinc, $1.00/lb Lead, $3.00/lb
Copper, $18.00/oz Silver, $1,500/oz Gold prices. Cost inputs are generally constructed by first principle or by estimates
supplied within the region. The financial highlights are as follows:
Description Base Case Results
(financial figures in USD)
Mine Life (years) 10.7
NPV after tax (5%) ($M) $258.7
NPV after tax (8%) ($M) $198.3
IRR after tax 37.0
Payback (years) 2.4
Gross Revenue ($M) $1,359
C1 - Net Direct Cash Cost ($/lb Zn) $0.38
Operating Cost ($/tonne) $93.07
Initial Capital ($M) including 20% Contingency and Closure $147.4
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Description Base Case Results
(financial figures in USD)
Sustaining Capital ($M) $74.7
Mineral Resource used in
Mine Plan (tonnes) 4,470,688
Planned tonnes (Recovered/Diluted) 4,180,094
Average Diluted Grade (% ZnEq) 15.11
Average Diluted Grade (% Zinc) 8.56
Average Diluted Grade (% Lead) 3.40
Average Diluted Grade (% Copper) 1.11
Average Diluted Grade (g/t Silver) 88.80
Average Diluted Grade (g/t Gold) 0.79
Average diluted NSR ($/t) 260.54
Processing Throughput (tpa) 432,000
Zinc Recovery (%) 89.5%
Lead Recovery (%) 80.5%
Copper Recovery (%) 77.5%
Silver Recovery (%) 38.1%
Gold Recovery (%) 68.6%
Payable Zn Produced (lbs) 600,145,735
Payable Pb Produced (lbs) 230,414,715
Payable Cu Produced (lbs) 78,314,898
Payable Ag Produced (Oz) 8,129,054
Payable Au Produced (Oz) 38,324
The PEA was completed by A-Z Mining Professionals Ltd. of Toronto, Canada (“A -Z Mining”) and included inputs by
ProSolve Consulting Ltd, Mine Paste Ltd., Wood Environment and Infrastructure Inc. and SLR Consulting Ltd., and was
based on an updated resource estimate prepared by A-Z Mining of Toronto.
Mineral Resources used in the Mine Plan
The mineral resource used in the PEA includes indicated and inferred resources and is an update from the January 7th,
2019 mineral resource statement. The estimate uses a 7% cutoff grade ( or an NSR value of $139/t) rather than the
previous 9% cutoff grade ($178/t NSR). The same methodology used in the 2019 estimate was applied to the updated
estimate where the m etal prices were not updated (to those used in the PEA financial model) and no additional
information was either included or excluded. Infill drill results since the 2019 resource estimate are expected to upgrade
the mineral resource and could potentially lead to an increase.
Tonnes Zn % Pb % Cu % Ag g/t Au g/t Density ZnEq %
Indicated Resource 2,177,000 9.25 3.68 1.32 96.4 0.9 3.98 18.23
Inferred Resource 2,294,000 9.79 3.88 1.15 101.1 0.9 3.99 18.62
The mineral resources were estimated using the metal prices of US$1.20/lb Zn, $2.50/lb Cu, $1.00/lb Pb, $16.00/oz Ag, and
$1,200/oz/Au, using a 7% cutoff grade that equates to an NSR cut-off of $139/tonne at the same metal prices. An average recovery
of 75% for all metals was assumed. A 10% mining dilution at zero grade was only added to the financial model which also used
different metal prices.
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Estimated Annual Production
Production at Pickett Mountain will be using combined Long Hole Open Stoping and Alimak mining methods. Since the
deposit is near surface, ramp up to full production is possible within one year of development and construction. Estimated
throughput is 432,000 tonnes per annum (1,200 tonnes per day).
Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Average
Mill Feed
(kt) 64.8 367.2 432.0 432.0 432.0 432.0 432.0 432.0 432.0 432.0 292.1 418.0
Mined
Grades
Zn (%) 8.43 8.43 8.43 11.79 11.46 11.46 9.04 6.43 6.52 5.93 4.93 8.56
Cu(% ) 1.52 1.52 1.52 1.01 1.02 1.02 1.03 0.92 0.97 1.08 0.98 1.11
Pb (%) 3.47 3.47 3.47 4.64 4.53 4.53 3.56 2.48 2.53 2.36 1.89 3.40
Au (g/t) 0.80 0.80 0.80 0.92 0.90 0.90 0.78 0.76 0.71 0.65 0.59 0.79
Ag (g/t) 94.34 94.34 94.34 118.82 116.62 116.62 92.17 65.88 67.44 59.08 50.19 88.80
NSR ($/t) 293.28 293.27 279.03 328.80 321.93 321.93 265.27 200.07 204.10 194.43 166.00 260.54
Summary of Project Costs
All cost inputs were estimated on the basis of first principals as well as several local and regional contract estimates.
Project Operating Costs
Underground Mining ($/t) $47.73
Processing ($/t) $31.25
Dry Stack Placement of Tailings ($/t) $1.30
Surface Services ($/t) $2.63
General and Administration ($/t) $7.95
Environmental and Sustainable Development ($/t) $2.21
Total $93.07
Cost inputs are generally constructed by first principle or by estimates supplied within the region.
Capital Costs
Capital Expenditures Initial Capex Sustaining Capex
Underground Development $21,435,688 $65,987,769
Mine Facilities and Equipment $10,167,505 $7,021,481
Mine Equipment Leasing and Remanufacturing $1,974,859 $15,277,454
Infrastructure $20,112,000 $0
Surface Mobile Equipment $1,000,000 $0
Tailings Storage Facility $2,001,495 $11,670,655
Build and equip mill $34,581,000 $0
Owners Indirects $6,333,000 $0
Reclamation and Closure $13,684,557 $0
Working Capital $11,524,000 -$11,524,000
Contingency @ 20% $24,562,821 $0
Total $147,376,925 $88,433,359
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Initial Capital costs include $24.6M based on a flat 20% contingency estimate on all capital items. In addition, the
$13.7M in reclamation and closure costs will be required as financial assurance in trust to the state of Maine redeemable
upon the commencement of reclamation and closure of the project.
Project Sensitivities
The project is sensitive to metal prices and head grade , and to a lesser extent the capital and operating costs as
demonstrated in the following table:
Qualified Person
The Preliminary Economic Assessment was prepared by A-Z Mining Professionals Ltd under the supervision of Brian
Leblanc, P.Eng., with input by Deepak Malhotra of ProSolve Consulting Ltd, Frank Palkovits of Mine Paste Ltd., and Eric
Sellars of SLR Consulti ng Ltd. whom are “qualified persons” under the standards set forth in NI 43-101. All four are
independent of Wolfden for purposes of NI 43 -101. Jeremy Ouellette, Vice President of Project Development, Don
Dudek, Vice President Exploration, and Ron Little, President and CEO, are the Company’s designated Qualified Persons
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for the purposes of the PEA. All parties have reviewed and approved their respective content of this press release. Full
details of the PEA in the form of a technical report for the purposes of NI 43-101 will be filed on SEDAR within the next
45 days.
About Wolfden and the Pickett Mountain Project
With the support of major investors Kinross Gold Corporation and Altius Minerals, Wolfden plans to explore and develop
its wholly owned Pickett Mountain Project in Maine, USA, one of the highest-grade polymetallic projects in North America
(Zn, Pb, Cu, Ag, Au) . The project is well-located near excellent infrastructure and services that will support straight
forward development as outlined in a robust Preliminary Economic Assessment released on September 14, 2020.
For further information please contact Ron Little, President & CEO, at (807) 624-1136 or Jeremy Ouellette, VP Project
Developments at (807) 624-1134.
Cautionary Statement Regarding Forward-Looking Information
This press release contains forward-looking information (within the meaning of applicable Canadian securities legislation) that involves
various risks and uncertainties regarding future events. Such forward -looking information includes statements based on current
expectations involving a number of risks and uncertainties an d such forward -looking statements are not guarantees of future
performance of the Company, and include, without limitation, statements relating to metal price assumptions, cash flow forecasts,
projected capital and operating costs, metal or mineral recover ies, mine life and production rates, and other assumptions used in
Preliminary Economic Assessment dated September 14, 2020 , infill drill results since 2019 that are expected to upgrade resources
and could potentially lead to an increase in resources, information about future activities at the Pickett Mountain Project that include
plans to complete additional drilling and pre-permitting (rezoning petition), the results of the Preliminary Economic Assessment dated
September 14, 2020 and potential upside of the Pickett Mt. Project . There are numerous risks and uncertainties that could cause
actual results and the Company's plans and objectives to differ materially from those expressed in the forward-looking information in
this news release, including with out limitation, the following risks and uncertainties: (i) risks inherent in the mining industry; (ii)
regulatory and environmental risks; (iii) results of exploration activities and development of mineral properties; (iv) risks relating to the
estimation of mineral resources; (v) stock market volatility and capital market fluctuations; and (vi) general market and industry
conditions. Actual results and future events could differ materially from those anticipated in such information. This forward -looking
information is based on estimates and opinions of management on the date hereof and is expressly qualified by this notice. Risks and
uncertainties about the Company's business are more fully discussed in the Company's disclosure materials filed with the secu rities
regulatory authorities in Canada at www.sedar.com. The Company assumes no obligation to update any forward-looking information
or to update the reasons why actual results could differ from such information unless required by applicable law.
Neither 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.