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Lion One Metals (TSXV:LIO) released results of a preliminary economic assessment for its Tuvatu gold project in Fiji on Monday. Highlights of results included an after-tax internal rate of return of 52 percent, and an after-tax net present value of $86.5 million at $1,200 gold.
Lion One Metals (TSXV:LIO) released results of a preliminary economic assessment for its Tuvatu gold project in Fiji on Monday. Highlights of results included an after-tax internal rate of return of 52 percent, and an after-tax net present value of $86.5 million at $1,200 gold.
As quoted in the press release:
All-inclusive pre-production capital is estimated at $48.6 million, including $27.6 million for the processing plant and surface infrastructure, and an added contingency and allowance for taxes and duties of $4.7 million. A further $26 million will be spent after the pre-production period as sustaining capital. LOM capital totals approximately $74.6 million, or $211 per ounce gold. Sustaining capital consists of capitalized waste development after the initial production start-up, major equipment purchases, and tailings facility development.
The capital cost (CAPEX) estimate includes all costs required to develop, sustain, and close the operation for an initial planned 6.2 year life of mine. The construction schedule is based on an approximate 15 month build period. The accuracy of this estimate is +-30%.
Tuvatu is contemplated as an underground mine. To minimize dilution the envisaged mine plan utilizes shrinkage stoping, and produces a total of 1.13Mt of mill feed over the 6.2 year project production life. The current mine plan focuses on achieving consistent mill feed production rates and mining higher grade material early in the production schedule. The current mine plan utilizes the existing decline enabling significant reductions in pre-production time and reduced capital development costs.
The proposed processing rate of 219,000 tpa was used along with underground design and deposit constraints to generate a detailed equipment list and mining fleet suitable for the LOM plan. The capital cost for this list is based on quotations from major suppliers. Mining costs were calculated from first principles using quotes from equipment and consumables suppliers, and Fijian and ex-pat labour rates.
Mine planning, production scheduling, capital and operating cost estimation for the Tuvatu Gold Project were conducted by AMC Consultants Pty Ltd (AMC). A site visit was undertaken by David Lee, AMC Principal Mining Engineer September 9th and 10th, 2014. During the visit Mr. Lee visited the Project site and met with a number of potential suppliers and open pit mining contractors.
The Study considered Indicated and Inferred Mineral Resources. There are no Measured Mineral Resources. Inferred Mineral Resources comprise 55.1% of the mined tonnes and 62.7% of the contained ounces in the mine plan developed in this Study.
There are four main zones contained in the Mineral Resource model. Snake/Murau zone is steeply dipping and strikes east-west. The Tuvatu zone is steeply dipping and strikes north-west by south-east, and is located north of the Coreshed Fault. The SKL zone is shallowly dipping. The Upper Ridge zone is steeply dipping, striking north-south and contains over 80% of the conceptual production ounces.
Lion One chairman and CEO, Walter Berukoff, said:
The PEA for Tuvatu demonstrates robust economic potential for a fully permitted high-grade gold operation with low capital and operating costs, enabling rapid payback of capital even at current low gold prices. We view Tuvatu as a near term development and production opportunity in Fiji’s major goldfield, with long term production potential in our substantial tenement holding.
Click here to read the Lion One Metals (TSXV:LIO) press release
