Northern Freegold Resources Ltd. (TSXV:NFR,OTCQX:NFRGF,FWB:8N6) announced the Preliminary Economic Assessment for the Nucleus and Revenue deposits on the Freegold Mountain Project in the Yukon, Canada. The Deposits generate $615 Million NPV and 23% IRR, with a mine life of 11 years.
As quoted in the press release:
- Average Life of Mine (“LOM”) annual production is forecasted at 150,000 oz gold, 17.3 million lbs copper, 4.2 million lbs molybdenum and 355,000 oz silver;
- First five years average annual gold production exceeds 200,000 oz;
- Average LOM cash cost of gold (net of byproducts) is $399 per oz;
- NPV (5%) $614.8 million pre-tax; IRR 23.4% pre-tax;
- NPV (5%) $357.8 million after-tax; IRR 17.5% after-tax;
- Throughput: 30,000 tonnes per day;
- Strip ratio over LOM 2.03:1;
- Mine life: 11 years;
- Pre-production capital of $499.7 million and Expansion capital of $78.6 million for mill additions in Year 5;
- Payback period from production: 4.2 years;
- At recent prevailing spot metal prices, the project generates a pre-tax NPV (5%) of $779.6 million, IRR of 29.7% and a payback of 3.2 years (see Sensitivity Analysis Table).
Northern Freegold President and CEO John Burges said:
This is a key milestone for Northern Freegold, this PEA demonstrates robust economics. The phased development with initial production at the Nucleus gold deposit helps to reduce upfront capital. Over 62% of the revenues are from gold production at an operating cost of less than $400 per ounce after byproduct credits. We have successfully grown the Nucleus/Revenue gold resource over 300% over the last four years and on a gold equivalent basis over 700%. Our exploration/drilling discovery costs for the 2012 inaugural Revenue resource were low at ~ $3 per gold ounce and $1 per gold equivalent ounce. There remain significant opportunities to grow the resources adjacent to the conceptual pits and extend the mine life, and there are many other high priority targets on the 10 km geophysical anomaly which have the potential to develop into near surface higher grade deposits.