In September 2014, Dalradian commenced a pre-feasibility study (PFS). Work on the PFS included an options analysis looking at alternatives to several aspects of the Preliminary Economic Assessment, including but not limited to dry stack tailings and the addition of a flotation circuit. Subsequent to the end of Q2 2015 management decided to transition to a feasibility study based on the technical results received to date.
The feasibility study has now been been completed by our independent consultant JDS Energy and Mining Inc. and includes contributions from SRK Consulting (Canada) Inc.
Feasibility Study Highlights
- Net Present Value (“NPV”) of $301 million (CDN$402 million) after tax (at a 5% discount rate) and Internal Rate of Return (“IRR”) of 24.4% after tax, at an assumed gold price of $1,250/ounce
- Proven & Probable Mineral Reserves of 1.44 million ounces of gold and 0.66 million ounces of silver (5.24 million tonnes at 8.54 g/t Au and 3.9 g/t Ag), a subset of the Measured and Indicated Resources of 2.10 million ounces of gold (5.61 million tonnes at 11.61 g/t Au). The FS excludes Inferred Resources of 2.31 million ounces of gold (7.13 million tonnes at 10.06 g/t Au)
- Life of mine (“LOM”) production of approximately 1.36 million ounces of gold and 0.38 million ounces of silver over an initial 10.5 year mine life using an average overall gold recovery of 94.3%
- Average annual gold production of 130,000 ounces in first 10 years with an average LOM total cash cost of $556/oz and a LOM all-in sustaining cash cost ("AISC") of $674/oz
- Estimated initial capital cost, including contingency, of $192.0 million with payback of 4.0 years, and LOM sustaining capital costs of $165.1 million
- At year 5, production increases above 150,000 oz/yr, with peak production achieved in year 7, at 170,000 ounces. There is potential to maintain this higher rate of production beyond year 7 with conversion of existing Inferred Mineral Resources
- Curraghinalt will be operated using automation, mechanized underground mining methods and best-in-class processing. The dry stack tailings from the process will not come into contact with cyanide.
- Creation of several hundred new jobs: during the 18-24 month construction period, direct employment is estimated to be at least 300; once the mine is in operation, it is expected employ at least 350 people in permanent positions.