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

Precious Metals

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.

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.
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