Gold Rock Project

Snapshot

LOCATION Nevada
OWNERSHIP 100%
METALS Gold
MINE Development stage Heap Leach opportunity

403,000 ozs

Measured & Indicated Mineral Resources

83,000 ozs

Inferred Mineral Resources

Gold Rock is federally permitted asset with 30% higher grade than Pan with a Preliminary Economic Assessment complete in 2020. Drilling, state permitting and technical studies are ongoing to support a feasibility study and development decision. Calibre sees significant exploration potential within the resource areas and surrounding underexplored targets for future expansion.

Expected gold ounce production at Gold Rock, in combination with Pan, could potentially organically bring production in Nevada over 100,000 ounces annually.

Gold Rock 2020 Preliminary Economic Highlights

  • Pre-tax NPV5% of US$49.7M and a 22.8% IRR (after-tax NPV5%of US$32.8M and a 17.8% IRR) at base case gold price of US$1,400/oz Au, with a life of mine cash flow of US$77.2M
  • At US$1,500/oz Au the Project returns a pre-tax NPV5% of US$78.3M and a 31.5% IRR (after-tax NPV5%of US$55.0M and a 25.4% IRR), with a life of mine cash flow of US$113.1M
  • Based on a sensitivity analysis at approximately the current spot price of US$1,600/oz Au the Project returns a pre-tax NPV5% of US$106.8 and a 39.7% IRR (after-tax NPV5%of US$77.2M and a 32.5% IRR), with a life of mine cash flow of US$149.0M
  • The updated resource estimate shows a 69% increase in Indicated resource to 403,000 gold ounces, in addition to the Inferred resource of 84,300 gold ounces, with excellent potential to grow the resource with next phase of planned drilling
  • Mine life of 6.5 years with life of mine (“LOM”) total gold production of 362,750 oz, averaging 55,800 oz annually
  • LOM cash costs of US$903/oz Au and LOM all-in sustaining costs (“AISC”) of US$1,008/oz Au
  • Pre-production capital expenditures of $64.6 million, sustaining capital expenditures of $7 million and reclamation costs of $16 million.

 The foregoing PEA highlights are based on the following:

  1. Cash costs are inclusive of mining costs, processing costs, on-site general and administrative (“G&A”) costs, treatment and refining charges and royalties
  2. AISC includes cash costs plus estimated corporate G&A and sustaining capital

The reader is advised that the PEA is preliminary in nature and is intended to provide only an initial, high-level review of the Project potential and design options. Readers are encouraged to read the PEA in its entirety, including all qualifications and assumptions. The PEA is intended to be read as a whole, and sections should not be read out of context. The PEA mine plan and economic model include numerous assumptions and the use of Inferred Resources. Inferred Resources are considered to be too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and to be used in an economic analysis except as allowed for by NI 43-101 in PEA studies. There is no guarantee that Inferred Resources can be converted to Indicated or Measured. Full details of the Preliminary Economic Assessment can be found under Technical Reports on this website http://calibremining.s3.adnetcms.com/assets/technical-reports/ or on sedar.com. Details of the April 9, 2020 news release highlights can be found on sedar.com.

PEA Parameters and Outputs – Base Case US$1,400/oz Au, 5% Discount

Pre-tax NPV5% (US$M)

49.7

Pre-tax IRR (%)

22.8%

After-tax NPV5% (US$M)

$32.8

After-tax IRR (%)

17.8%

LOM tons processed (Vat Leach / Heap Leach, M tons)

13.6 / 9.5

LOM Au grade (Vat Leach / Heap Leach, opt)

.028 / .006

LOM Au recovery (Vat Leach / Heap Leach, %)

88.2 / 60.0

LOM Au production (oz)

362,750

Average annual Au production (oz)

55,800

Pre-Production Capital (US$M)

64.6

LOM Sustaining Capital (US$M)

7.0

Reclamation Costs (US$M)

16.0

LOM AISC (US$/oz)

1,008

Mine life (years)

6.5

Abbreviations and acronyms used in this new release include Net Present Value at a 5% discount rate (“NPV5%”), Internal Rate of Return (“IRR”), Life of Mine (“LOM”), short ton (“st”), troy ounces per short ton (“opt”), troy ounces (“oz”), and grams per metric tonne (“gpt”).

Sensitivities

After-tax economic sensitivities to gold prices are presented in Table 2, illustrating the effects of varying gold price as compared to the base-case. Additional project sensitivities will be presented in the Technical Report that will be filed on SEDAR under the Company’s profile within 45 days of the date of this news release.

Table 2. Sensitivity to gold price

Gold Price (US$/oz)

$1,300

$1,400

$1,500

$1,600

Pre-Tax NPV5% (US$M)

$21.2

$49.7

$78.3

$106.8

Pre-Tax IRR (%)

13.1%

22.8%

31.5%

39.7%

After-Tax NPV5% (US$M)

$10.4

$32.8

$55.0

$77.2

After-Tax IRR (%)

9.3%

17.8%

25.4%

32.5%

PEA Overview

The profile Gold Rock described and evaluated in the PEA includes mining from three adjacent open pits referred to as the North, Central, and South Pits. Mining will be by conventional methods consisting of drill/blast and loading by 16 cubic yard wheel loaders into 100 short ton haul trucks. Mining activities will be carried out by a mining contractor as is currently done at the adjacent Pan Mine. The mix of equipment will be the same at both projects, allowing for added synergies and flexibility.

The majority of mineralized material will be processed utilizing a vat leaching circuit. Generally, this circuit will include primary, secondary, and tertiary crushing feed to an open circuit rod mill followed by separation of coarser material from fines. The coarser material will be leached in static sand vats. The finer material will be leached in continuously recirculating vats to approximate recoveries equal to agitated tank leach at a significantly lower capital and operating cost.

Low grade material, consisting of 40% of the total tonnage and 9% of total recoverable gold ounces, will be primary crushed through a single stage horizontal shaft impact crusher and, after dewatering of the vat tailings, will be agglomerated with vat tailings for heap leaching. Reclaimed water from the vat tailings will be returned to the circuit. The advantage of this strategy is to eliminate the need for a tailings storage facility, enhance solution flow in the heap and recover the minor quantities of gold remaining in the vat tailings.

Gold in solution from both the vat leach and heap leach systems will be recovered in common carbon loading and stripping processes. The PEA considers leveraging the existing infrastructure at the Company’s adjacent Pan Mine, including access, grid power, and lab facilities. Gold Rock will also share a common management and administrative team with the Pan Mine.

The PEA is based on an updated mineral resource estimate for Gold Rock contained in the Technical Report available here, http://calibremining.s3.adnetcms.com/assets/technical-reports/. The effective date of the PEA is March 31, 2020. The PEA was prepared through the collaboration of APEX Geoscience Ltd. (“APEX”) and John T Boyd Company (“BOYD”).

Project Opportunities and Value Enhancements

The PEA demonstrates that Gold Rock has the potential to become an economically viable project. Additional opportunities to enhance project value and next steps include: 

  • Further drilling between the currently defined pits to potentially add resources that may merge the pits and reduce the overall strip ratio. Previous attempts to drill this area were complicated by having to avoid the decommissioned leach pad from the former Easy Jr mine. We have since received permission to drill through the pad and will be targeting this area in our next drilling program.
  • Additional drilling along strike and on parallel structures to additionally grow the resource base. The current resource occupies only about 3 km of a more than 16 km long trend of favourable geology, structure, and alteration with superimposed gold and pathfinder element anomalies.
  • Geotechnical drilling and testing to optimize pit slope designs. This is an area of significant potential value enhancement, with every degree of pit wall steepening resulting in a material reduction in stripping and a corresponding improvement in project economics.
  • Additional metallurgical testing on existing and pending large diameter core to further refine process flowsheet and potentially reduce reagent consumption.
  • Further optimisation of the methods for waste stripping, taking advantage of the fact that most of the waste is external to the mineral resource. The review of waste mining options will include in-pit crushing and conveying, larger loading and hauling equipment, and other options to increase mining efficiency.

Mining Overview

As noted above, mining will be conducted in three, independent but closely spaced pits situated along the trend of the mineralized zone. The largest of the three is the North Pit which contains the greatest in-pit resource of 19.3 million short tons grading 0.018 opt (0.62 gpt), including vat feed and heap feed, for 352,000 in situ troy ounces of gold or 82% of the total in-pit resource. This is followed by the Central Pit at 3.4 million short tons grading 0.021 opt (0.73 gpt) including vat feed and heap feed, for 73,000 in situ troy ounces of gold or 17% of the total in-pit resource, and the South Pit at 0.4 million short tons grading 0.010 opt (0.42 gpt) including vat feed and heap feed, for 4,300 in situ troy ounces of gold or 1% of the total in-pit resource.

 Waste short tons and strip ratio for each of the pits are: North Pit 105.1 million tons / strip ratio 5.4:1, Central Pit 40.0 million tons / strip ratio 11.7:1, and South Pit 0.92 million tons / strip ratio 2.6:1 for an overall total of 146 million short tons of waste and an overall strip ratio of 5.8:1.

Mining costs per pit and in total are shown below

Gold Rock Mining Costs by Pit

 

Mining Cost per Short Ton of Mineralized Material ($/st)

Mining Cost per Troy Ounce Au ($/oz)

 
Pit    

North

9.59

623.32

 

Central

16.47

907.27

 

South

6.77

622.14

 

 Total

10.41

672.62

 

A summary of the mine outputs

Gold Rock Open Pit Design

Vat leach feed (mineralized tons mined, Mt)

13.6

Vat leach feed Au grade (opt / gpt)

0.028 / 0.96

Heap leach feed (mineralized tons mined, Mt)

9.5

Heap leach feed Au grade (opt / gpt)

0.006 / 0.21

Open pit Au ounces contained (oz)

429,000

Strip ratio (waste:mineralized material)

5.8:1

Mineral Processing Overview

Total process feed is targeted at a nominal 10,000 short tons per day. Note that the project is permitted to 17,000 short tons per day and for reference, the adjacent Pan Mine processes approximately 14,000 short tons per day. Vat process feed material above a 0.015 opt Au cut-off grade is expected to average 4,900 st/day at 0.028 opt over the project life and peaks at 6,000 t/day in production year 3, based on the current mine production plan determined for the PEA. Heap leach feed above a 0.004 opt Au cut-off grade is expected to average 3,400 st/day stacked at a 0.006 opt average grade over the life of mine, peaking at 7,000 st/day stacked briefly during mid-Production year 1.

 Total cash operating costs for vat processing are projected to be US$4.85 per short ton processed and US$200 per gold ounce produced. Total cash operating costs for heap leach processing are projected to be US$2.23 per short ton stacked and US$644 per gold ounce produced. Together, all-in processing costs on a weighted basis are projected to average US$240 per gold ounce produced.

Capital and Operating Costs

A summary of Gold Rock’s operating and capital costs is highlighted in Tables 6 and 7 below.

Capital Costs

Area

Initial (US$M)

Sustaining (US$M)

Design Completion

0.6

Site Access and General Site (incl. 10% contingency)

0.3

Mining (incl. 10% contingency)

14.6

Mineral Processing (incl. 15% contingency)

43.2

6.8

Infrastructure, water management (incl. 10% contingency)

5.5

0.1

Reclamation (pre-production bonding)

0.2

16.0

Total

64.5

23.0

Operating Costs

Area

$/short ton

Mining ($/short ton mined / $/st mineralized material mined)

1.54 / 10.41

Processing ($/short ton of mineralized material)

3.77

General & administrative ($/short ton of mineralized material)

0.43

Royalty and Bonding ($/short ton of mineralized material)

0.16

Ex-site Dore Shipping and Insurance ($/short ton min. material)

0.01

Total ($/ton of mineralized material)

14.78

Environmental and Permitting Considerations

The US Bureau of Land Management (“BLM”) issued a Record of Decision (“ROD”) for the Gold Rock project in September 2018, completing the federal National Environmental Policy Act (“NEPA”) permitting process for a mine and related infrastructure at the site. The ROD covers the proposed expansion of the existing historical open pit and construction of two waste rock disposal areas, a heap leaching facility with an adsorption/desorption refining plant, a carbon-in-leach plant and tailings storage facility, roads, ancillary support facilities, and additional exploration areas.

State level permitting will be required prior to the initiation of construction at Gold Rock. This process is typically initiated once the project design is at a more advanced stage. The process requires submitting applications for all major state level permits, such as the reclamation, water pollution control and air permits, as well as less extensive submittals for more minor permits such as blasting, septic system, and building permits. State permitting generally takes from six to nine months to complete, however a 12-month state permitting window has been incorporated in the overall project schedule. State permitting would take place simultaneously with construction level design work and other development activities.

 The PEA provides an updated mineral resource estimate and a base case assessment of developing the Project as a satellite open pit operation that will share significant infrastructure and management with the adjacent Pan Mine. The PEA also identifies a considerable number of opportunities to enhance the project economics as Gold Rock advances to the Feasibility stage by drilling to increase the mineral resource, further metallurgical testing aimed at improving recoveries, and geotechnical drilling aimed at reducing the stripping ratio.

The Gold Rock Project consists of a large 20,300-hectare contiguous land package on the Battle Mountain-Eureka Trend, anchored by the former Easy Junior Mine, which reportedly produced approximately 2.6 million tonnes at a grade of 0.89 grams per tonne for 74,945 gold ounces in the early 1990s.

The mineralisation at Gold Rock is hosted by the folded and faulted Joanna Limestone Formation, where the historical resource covers only about 3 km of a >13 km long belt. This belt contains the same folded and faulted Joanna Formation, displaying strong Carlin-style alteration (silica flooding, jasperoids) and coincident gold and pathfinder element anomalies throughout its strike length. This area is considered highly prospective for additional discoveries. At least nine distinct targets defined by Carlin-type structure, geochemistry and alteration have been located by surface sampling and mapping, with drilling on three of the targets currently underway.

The ROD covers the proposed expansion of the existing open pit and construction of two waste rock disposal areas, a heap leaching facility with an adsorption/desorption refining plant, roads, ancillary support facilities, and additional exploration areas. The ROD also allows for inclusion of a carbon-in-leach plant and tailings storage facility if required for a future phase of the project.

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