Wallbridge Mining Delivers Positive Preliminary Economic Assessment for the Fenelon Gold Project in Quebec
WALLBRIDGE MINING COMPANY LIMITED TSX: WM www.wallbridgemining.com
129 Fielding Road Lively ON P3Y 1L7 t: 705-682-9297 f: 1-888-316-4156 e: [email protected]
Wallbridge Mining Delivers Positive Preliminary Economic Assessment
for the Fenelon Gold Project in Quebec
WEBCAST TO BE HELD ON JUNE 27, 2023 @ 10:00 AM EST.
To join the webinar, register here
Toronto, Ontario – June 26, 2023 – Wallbridge Mining Company Limited ( TSX:WM,
OTCQX:WLBMF) (“Wallbridge” or the “Company”) is pleased to report positive results from the
Preliminary Economic Assessment (“ PEA”) completed on its still growing, 100%-owned Fenelon
gold project (“Fenelon” or the “Project”) located in the Abitibi Greenstone Belt, along the Detour-
Fenelon Gold Trend, Quebec (Table 1).
Tony Makuch, Chairman of Wallbridge, stated:
“Projects such as Fenelon, with a projected annual production profile of more than 200,000 gold
ounces, located in a mining -friendly jurisdiction with established infrastructure, having substantial
exploration upside and access to clean hydro-electric energy are highly desirable yet exceedingly
rare in the mining industry today . We are extremely plea sed that the PEA on Fenelon alone is
demonstrating robust economics at this early stage. We expect further improvements as we
continue to add to the resource base through our exploration efforts at Fenelon and elsewhere on
our very large land position in the northern Abitibi greenstone belt.”
All results herein are reported in Canadian dollars unless otherwise indicated.
PEA SUMMARY
• Average annual gold production of 212,000 oz over 12.3 years.
• Average annual free cash flow of $157 million over life of mine (“LOM”).
• After-tax NPV of $721 million at base case gold price of US$1,750 and $C/US$ of 1.30
• After-tax NPV of $1,070 million at spot gold price of US$1,950 and $C/US$ of 1.34
• Initial capital expenditures of $645 million.
• Sustaining capital expenditures of $594 million.
• Total cash costs of US$749/oz.
• All-in-sustaining costs of US$924/oz.
Marz Kord, Wallbridge’s President and Chief Executive Officer, commented:
“Wallbridge acquired the original Fenelon property in 2016 with a small historic resource based on
sporadic geological work by previous owners . Since then, we have been very successful in
delineating a multi -million-ounce gold resource , which remains open in virtually all directions.
Fenelon has now reached another milestone with a robust PEA that demonstrates a viable path to
development and attractive economic returns based on conservative assumptions. The PEA was
designed to be rigorous, using current cost data from contractors, suppliers and mining companies
operating in the region to arrive at realistic projections. It represents a compelling starting point to
build upon as we scope out the full opportunity at Fenelon and Martiniere, the two most advanced
projects on our large, underexplored property.
Over the next few months, we will evaluate alternatives to advance Fenelon. While doing so, we will
continue to test new areas of mineralization at Fenelon. We have a great near-term opportunity to
incorporate satellite deposits such as Martiniere into future studies, with the potential for substantial
synergies on a district scale. Our 2023 exploration programs will further delineate the size and scale
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
2|Page
of the Fenelon and Martiniere deposits while also targeting new greenfield discoveries on our land
package.”
Table 1: PEA Summary of Key Metrics and Project Economics
Description Unit Base Case
Spot Prices
Metal Prices/FX
Gold (Au) US$/oz $1,750 $1,950
Currency Exchange Rate C$/US$ 1.30 1.34
Production Data
Milled Tonnes million tonnes 31
Gold Grade Mined g/t 2.73
Gold Recovery % 96
Daily Mill Throughput tpd 7,000
Mine Life years 12.3
Avg Annual Production oz Au 212,000
Recovered Gold million oz 2.61
Operating Costs
Total Cash Costs 1,3 $/tonne milled 82
Total Cash Costs 1,3 US$/oz 749
All-in Sustaining Costs2,3 US$/oz 924
Capital Costs
Initial Capital3 $ million 645
Sustaining Capital3 $ million 594
Financial Analysis
Pre-Tax NPV 5% $ million 1,210 1,788
Pre-Tax IRR % 23.0 30.8
After-Tax NPV 5% $ million 721 1,070
After-Tax IRR % 18 24
Payback Period (Production Start) years 5.4 4.2
1. Total cash costs include mining, processing, tailings, surface infrastructures, transport, G&A and royalty costs.
2. All-in sustaining cost (“ AISC”) includes total cash costs, sustaining capital expenses to support the on-going
operations, and closure and rehabilitation costs divided by payable gold ounces.
3. Non-IFRS financial performance measures with no standardized definition under IFRS. Refer to note at end of this
press release.
Financial Analysis
At base case gold price of US$1,750/oz, the Project generates after-tax Net Present Value (“NPV”)
of $721 million using 5% discount rate and an after-tax Internal Rate of Return (“IRR”) of 18%.
The Project generates cumulative free cash flow of $1,395 million and average annual free cash
flow of $157 million over a mine life of 12. 3 years (Figure 1). Total taxes payable over LOM at the
base case gold price is $792 million.
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
3|Page
Figure 1. Project After-Tax Cash Flow
Sensitivities
The PEA financial economic analysis is significantly influenced by gold prices. At a spot gold price
of US$1,950/oz and FX of 1.34, the Project generates an after- tax NPV of $1, 070 million and an
after-tax IRR of 24 % with a payback period of 4 .2 years from the commencement of production
(Table 2).
Table 2: PEA Sensitivity to Gold Price, Operating Costs & Capital Costs
Gold Price
US $/oz
FX NPV
$M
IRR
%
Payback
Years
$1,600 1.30 512 14 6.2
$1750 1.30 721 18 5.4
$1,900 1.30 923 21 4.6
$1,950 – Spot 1.34 1,070 24 4.2
Operating Costs
NPV
$M
Capital Costs
NPV
$M
Base Case -10% 823 Base Case -10% 786
Base Case 721 Base Case 721
Base Case +10% 614 Base Case +10% 653
Base Case +20% 506 Base Case +20% 586
Production
Annual production over LOM is expected to average 212,000 ounces with peak year production of
240,000 ounces (Figure 2).
-231 -414
32
140 139
100
161
196 202
228
199 218
182
148
94
-2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13
Year
After-Tax Cash Flow ($Million)
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
4|Page
Figure 2. Production Profile
Capital Costs
The initial capital costs are estimated at $645 million, and the sustaining capital is estimated at $594
million (Tables 3 & 4). A contingency of $54 million and $44 million is included in initial and sustaining
capital costs, respectively.
Initial and sustaining capital costs were estimated based on current costs received from vendors as
well as developed from first principles, while some were estimated based on factored references
and experience from similar operating projects.
Table 3: Initial Capital
1. All values stated are undiscounted. No depreciation of costs was applied.
2. Non-IFRS financial performance measures with no standardized definition under IFRS. Refer to note at end of this
press release.
Cost Element Initial Capital ($M)1,2
Mill 220
Paste Plant 46
Tailings and Water Treatment 36
Capitalized Operating (Pre-production) 99
Surface Civil & Infrastructure 87
Mining Equipment 18
Underground Development 83
Hydro Electric Line & Distribution 55
Total Initial Capital $645
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
5|Page
Table 4: Sustaining Capital
Cost Element Sustaining Capital ($M)1,2
Production Shaft 143
Mining Equipment 140
Development 158
Tailings & Water Treatment 63
Paste Distribution Network 13
Underground Infrastructure 45
Surface Infrastructure 26
Closure 8
Total Sustaining Capital $594
1. All values stated are undiscounted. No depreciation of costs was applied.
2. Non-IFRS financial performance measures with no standardized definition under IFRS. Refer to note at end of this
press release.
Cash Costs
The total cash costs including the 4% royalties, is estimated at $82/t milled or US$749/oz payable
gold. The AISC is estimated at US$924/oz payable gold.
Operating cost estimates were developed using first principles methodology, vendor quotes , and
productivities being derived from benchmarking and industry practices.
Table 5: Total Cash Costs
LOM Total
$ million
Average LOM
($/tonne milled)
Average LOM
(US$/oz)
Mining 1,320 42.7 391
Processing 521 16.8 153
Water Treatment & Tailings 51 1.6 15
General & Admin. 408 13.2 120
Royalty (4%) 237 7.7 70
Total Cash Costs 1,2 2,537 82.0 749
1. Total operating costs include mining, processing, tailings, surface infrastructures, transport, G&A and royalty costs.
2. Non-IFRS financial performance measures with no standardized definition under IFRS. Refer to note at end of this
press release.
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
6|Page
Opportunities
The main opportunities for the Project that have been identified include:
Opportunity Potential Benefits
Additional infill drilling at Fenelon Would likely increase the resource grade and ounces and
convert more inferred to measured and indicated categories.
Additional exploration drilling at
Fenelon
Deposit is open in all directions. Would likely increase the
mineral resources and extend mine life.
Additional technical studies (borrow
pits, geotechnical investigation,
hydrogeology, geochemical)
Would likely improve project economics by reducing the
capital requirements.
Additional geotechnical/rock
mechanics
Would likely reduce crown pillar thicknesses thus increasing
overall ounces.
Additional metallurgical studies,
paste fill testing, and tailings testing
Would likely lower project operating costs.
Additional waste rock sampling Would likely identify clean waste rock to reduce site
infrastructure costs.
Additional drilling at Martiniere Would likely add organic production growth by increasing
mineral resources and converting from inferred to measured
and indicated categories.
Additional exploration outside the
current mineral resources
Large, underexplored land package. Potential for new
discoveries to add organic production growth.
Mineral Resource Estimate
The PEA is based on the 2023 Fenelon Deposit Mineral Resource Estimate (“ MRE”) and contains
indicated and inferred mineral resource. Carl Pelletier, P.Geo., Vincent Nadeau -Benoit, P.Geo.,
Simon Boudreau, P.Eng. and Marc R, Beauvais, P.Eng., all of InnovExp lo Inc. (“InnovExplo”) are
the independent qualified persons within the meaning of NI 43-101 for the 2023 Fenelon MRE.
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
7|Page
Table 6: Fenelon Deposit Mineral Resource Estimate
Notes:
1. The independent and qualified persons for the current Detour -Fenelon Gold Trend 2023 MRE are Carl Pelletier, P.Geo. , Vincent
Nadeau-Benoit, P.Geo., Simon Boudreau, P.Eng. and Marc R, Beauvais, P.Eng., of InnovExplo Inc. The Detour-Fenelon Gold Trend
2023 MRE follows 2014 CIM Definition Standards and 2019 CIM MRMR Best Practice Guidelines. The effective date of the Detour-
Fenelon Gold Trend 2023 MRE is January 13, 2023.
2. These mineral resources are not mineral reserves as they do not have demonstrated economic viability.
3. The QPs are not aware of any known environmental, permitting, legal, title- related, taxation, sociopolitical or marketing issues, or
any other relevant issue, that could materially affect the potential development of mineral resources other than those discussed in
the Detour-Fenelon Gold Trend 2023 MRE.
4. For Fenelon, 112 high- grade zones and seven (7) low -grade envelopes were modelled in 3D to the true thickness of the
mineralization. Supported by measurements, a density value of 2.80 g/cm3 was applied to the blocks inside the high- grade zones,
and 2.81 g/cm3 was applied to the blocks inside the low -grade envelopes. High-grade capping was done on raw assay data and
established on a per-zone basis and ranges between 25 g/t and 100 g/t Au for the high-grade zones (except for the high-grade zones
Chipotle and Cayenne 3 a high-grade capping values of 330 g/t Au was applied) and ranges between 4 g/t and 10 g/t Au for the low-
grade envelopes. Composites (1.0 m) were calculated within the zones and envelopes using the grade of the adjacent material when
assayed or a value of zero when not assayed. A minimum mining width of 2 metres was used for underground stope optimization.
5. The criterion of reasonable prospects for eventual economic extraction has been met by having constraining volumes applied to any
blocks (potential surface and underground extraction scenario) using Whittle and DSO and by the application of cut-off grades. The
cut-off grade for the Fenelon deposit was calculated using a gold price of US$1,600 per ounce; a CA/US exchange rate of 1.30; a
refining cost of $5.00/t; a processing cost of $18.15/t; a mining cost of $5.50/t (bedrock) or $2.15/t (overburden) for the s urface
portion, a mining cost of $65.00/t for the underground portion and a G&A cost of $9.20/t. Values of metallurgical recovery of 95.0%
and royalty of 4.0% were applied during the cut -off grade calculation. The cut -off grade for the Martiniere deposit was calculated
using a gold price of US$1,600 per ounce; a CA/US exchange rate of 1.30; a refining cost of $5.00/t; a processing cost of $18.15/t;
a mining cost of $4.55/t (bedrock) or $2.15/t (overburden) for the surface portion, a mining cost of $118.80/t for the underground
portion using the long-hole mining method (LH), a mining cost of $130.70/t for the underground portion using the cut and fill mining
method (C & F), a G&A cost of $9.20/t and a transport to process cost of $6.50/t. Values of metallurgical recovery of 96.0% and
royalty of 2.0% were applied during the cut-off grade calculation. The cut-off grades should be re-evaluated in light of future prevailing
market conditions (metal prices, exchange rate, mining cost, etc.).
6. Results are presented in-situ. Ounce (troy) = metric tons x grade/31.10348. The number of tonnes and ounces was rounded to the
nearest thousand. Any discrepancies in the totals are due to rounding effects; rounding followed the recommendations as per NI 43-
101.
WALLBRIDGE MINING COMPANY LIMITED
TSX| WM
8|Page
Mining
The underground mine will have a production rate of 7,000 tpd over a 12.3-year mine life. A total of
30.8 Mt of mineralized material at an average grade of 2.73 g/t will be extracted from three different
mining zones:
• Tabasco-Cayenne zones with 68.5% of the ounces to be mined;
• Area 51 zones with 31.1% of the ounces to be mined; and
• Gabbro zones with 0.4% of the ounces to be mined.
The mining method will be long hole with longitudinal stopes for 5 to 8 metres width, corresponding
to 40% of the stope tonnage. Transverse stopes are designed for stopes with 8 to +15 metres width,
which account for 60% of the remaining stope tonnage. (Figure 3)
Stope dimensions are 30 metres (A51 Zones) to 40 metres (Tabasco-Cayenne Zones) in height, 5
to 15 metres in width and 20 to 25 metres in length. The average size of the stopes from all zones
is approximately 15,000 tonnes and about 150 stopes will be mined annually. Mining recovery is
estimated at 96%. Stope backfilling will be done with cemented rock fill (50%) and rock fill (50%) or
with paste backfill depending on the stope dimensions and sequence.
Development will be done with a mining contractor during Pre-Production Year 1. Starting at Pre-
production Year 2, development will be done with owner equipment -personnel. Development
priority is to develop the main Tabasco ramp and to access production centers. The development
mineralized material will generate 10% of the total gold production.
The mining fleet , comprised of 99 pieces of mobile equipment , will be purchased via a lease
financing agreement. Supporting underground infrastructure includes several main pumping
stations, two ventilation and heating systems and one exhaust raise.
Figure 3. LOM schematic