PMI Gold Corporation: Increased Proven and Probable Ore Reserves of 34.2Mt at 2.21g/t for 2.43Moz of Gold Across Four Deposits

PMI Gold Corporation (TSXV:PMV) reported positive results from the independent NI 43-101 Feasibility Study conducted on its flagship Obotan Gold Project in Ghana, through its wholly-owned subsidiary Adansi Gold Company Ghana Limited.

Highlights from the press release include:

• Independent NI 43-101 compliant Feasibility Study confirms a financially and technically robust mining operation at Obotan, with key outcomes including:
  • Pre-Tax NPV of US$614M and Post-tax NPV of US$387M, assuming a US$1,300/oz gold price, 5% discount rate and contract mining scenario (consistent with January 2012 Pre-feasibility Study)
    • Pre-tax IRR of 35% and post-tax IRR of 28%
    • Capital payback period of 2.9 years
  • At current prices of $1600/ounce,
    • Pre-tax NPV rises to US$1.07B and post-tax NPV to US$686M
    • Pre-tax IRR of 54% and post-tax IRR of 43%
    • Capital payback period of 2.0 years
  • Average production of 221,500 oz Au pa over the first five years
  • Total production of 2.26 million recovered oz Au over the 11.5 year mine life
  • Life-of-mine Project Revenue of US$2.9 billion
  • Estimated average life-of-mine cash operating costs of US$626/oz
  • Increased Proven and Probable Ore Reserves of 34.2Mt at 2.21g/t for 2.43Moz of gold across four deposits. This is a rise of 170,000 oz from the January 2012 Pre-feasibility Study.
  • Capital cost estimate of US$296.6M including a pre-strip mining cost of US$82.2M

• Feasibility Study completed with a high level of cost estimates based on firm tenders from suppliers, and quotes from five mining contractors.

• Final Investment Decision (FID) on track for Q4 2012, with interim Board approval to expedite engineering designs of key long-lead items.

• At the end of July 2012, PMI had US$39m cash.

• Environmental studies, Mining Lease Application and other statutory approvals on track to be finalized during Q4 2012.

• A select group of leading international banks have provided detailed indicative offers to deliver debt financing facilities for the development of the Obotan Project.

• PMI continues to focus exploration on tenements close to the Obotan Project, and the Kubi and Asanko exploration projects which offer potential to become future production centres.

• Together with Obotan, these centres support the Company’s medium-term objective of becoming a mid-tier West African gold producer.

Click here to view the full press release.