Timberline Resources Releases Talapoosa PEA; $136 Million NPV, 39 Percent IRR

Timberline Resources (TSXV:TBR,NYSE MKT:TLR) released results of a preliminary economic assessment (PEA) for the recently optioned Talapoosa project in Nevada. The company holds a 30 month option to purchase 100 percent of the project.

As quoted in the press release, highlights of the PEA included:

• Estimated average annual production of 55,000 oz of gold and 679,000 oz of silver for 11 years
• LOM all-in sustaining costs of $599/oz gold (net of silver byproduct at $16/oz silver price)
• After-tax NPV5% of $136 million and 39% IRR at $1,150/oz gold price and $16/oz silver price
• Low initial capital requirement of $51 million required to achieve production

The PEA confirms Talapoosa’s robust economic potential as an open pit, heap leach gold operation using contract mining at a processing rate of 3.8 million tons per annum (Mtpa). Specifically, using the base case price assumption of $1,150/oz gold and $16/oz silver, Talapoosa has an estimated $209 million after-tax net cash flow, $136 million after-tax net present value (NPV) at a 5% discount rate, an attractive 39% after-tax internal rate of return (IRR), and a low initial capital cost of $51 million. All currency figures are in US Dollars (US$ or $) unless otherwise stated.
The PEA was prepared by WSP Canada Inc. (“WSP”), with technical contributions from Mineral Property Development, Inc. (“MPDI”), McClelland Laboratories, Inc. (“McClelland Labs”), Enviroscientists Inc. (“Enviroscientists”) and DOWL, using the current mineral resource estimate for Talapoosa, which was also prepared by WSP with an effective date of March 24, 2015. The completed PEA technical report will be filed on the Company’s website, EDGAR and SEDAR within 45 days.

Timberline president and CEO, Kiran Patankar, said:

We are extremely pleased to have achieved this important milestone just a short month after having acquired the Talapoosa option. Our technical team capitalized on a well-defined mineral resource that had undergone extensive historic engineering and permitting work to deliver a high quality PEA ahead of schedule. This illustrates the clear advantages of working with a technical group that is actively involved with comparable Nevada gold development projects and had prior experience with Talapoosa.

The PEA presents a development scenario that demonstrates strong economics using conservative metals price assumptions and, importantly, fits within the scope of the previously permitted operation. As a partially permitted project in a low-risk, pro-mining jurisdiction with estimated average annual gold production of 55,000 oz, all-in sustaining cash costs of $599/oz of gold (net of silver), initial capital costs of $51 million, and potentially significant opportunities for future optimization and resource expansion, we believe Talapoosa is in the top quartile of North American gold development projects. Based on these encouraging results, we plan to further optimize Talapoosa through the completion of a Pre-Feasibility Study, which we expect to complete in Q1 2016.

Click here to read the Timberline Resources (TSXV:TBR,NYSE,MKT:TLR) press release