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Gold Reserve Provides Mineral Resource and Positive Preliminary Economic Assessment on Siembra Minera Project
The Project is a gold-copper-silver deposit located in the Kilometre 88
mining district of Bolivar State in southeast
The Project is expected to begin with the Small Plant, which is
estimated to take two years for detail design and construction while
providing a platform for establishing the Project's operations and
management group in advance of the Large Plant operation. The Small
Plant, related mining equipment, initial tailings dam and infrastructure
cost estimate is
Initial Capital Cost estimate1 | $2.6 billion | |
Working Capital | $195 million | |
Total Life of Mine Capital estimate | $4.7 billion | |
Estimated Production Cost (Net of by-product credits (NBP)) 2 | $428/ Ounce | |
Estimated Life of Mine Sustaining Capital Cost and Reclamation Cost | $56/ Ounce | |
All-In Sustaining Cost (NBP) | $483/ Ounce | |
Estimated Average Annual Gold Production (Years 3-18) | 1.229 million Ounces | |
Estimated Average Annual Copper Production (Years 3-18) | 77 million Lbs. |
1 |
Includes both process plants, mining equipment, tailings dam and infrastructure requirements | |
2 | Utilizing $1,300 per ounce gold and $3.00 per pound copper | |
Project Economic Summary (utilizing $1,300/ ounce gold and $3.00/ pound copper) | ||||
Pre-Tax | After-Tax | |||
Undiscounted Cash Flows (Mine Life) | $28.16 billion | $20.22 billion | ||
Cash Flow (Annually)1 | $1.1 billion | $0.9 billion | ||
Rate of Return (ROR): | 36.8% | 31.1% | ||
Net Present Value (NPV 5%): | $11.2 billion | $8.1 billion | ||
Net Present Value (NPV 10%): | $5.53 billion | $3.93 billion | ||
Capital Payback | 3.8 years | 4.1 years | ||
1 First 10 years with Large Plant (Years 3-12) |
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Gold |
Copper |
Silver |
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Average Life of Mine Annual Sales (45 Years) | 836,000 | 71 million | 369,000 | |||
Life of Mine Sales | 37,600,000 | 3,198 million | 16,600,000 | |||
All-In Sustaining Average Cost (AISC)1 | $483/ Ounce | |||||
1 Net of a $262/ ounce copper and silver by-product credit (NBP) |
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The project resource estimates are shown in the following tables:
Mineral Resource on the Siembra Mineral Project as of December 31, 2017 | ||||||||||||
Tonnes |
Grade |
Grade |
Gold |
Copper |
Copper (millions) |
|||||||
Measured | 10 | 1.02 | 0.18 | 318 | 17 | 38 | ||||||
Indicated | 1,174 | 0.70 | 0.10 | 26.504 | 1,202 | 2,649 | ||||||
Total M&I | 1,184 | 0.70 | 0.10 | 26.822 | 1,219 | 2,687 | ||||||
Inferred | 1,291 | 0.61 | 0.08 | 25.389 | 1,044 | 2,300 |
Notes: |
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1. | CIM (2014) definitions were followed for Mineral Resources. | |
2. | Mineral Resources are estimated at an NSR cut-off value of US$7.20 per tonne for oxide-saprolite material and US$5.00 per tonne for sulphide-saprolite and fresh rock material. | |
3. | Mineral Resources are constrained by a preliminary pit shell created using the Whittle software package. | |
4. | Mineral Resources are estimated using a long-term gold price of US$1,300 per ounce, and a copper price of US$3.00 per pound. | |
5. | Bulk density varies by material type. | |
6. | Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. | |
7. | Numbers may not add due to rounding. | |
An economic ultimate pit design was based on operating cost estimates, plant metal recoveries, net smelter return, royalties and taxes. The pit design was centered on maximizing the Project Net Present Value and a mine plan was developed based on the mineral resource potentially mineable by open pit methods within the design.
Mineable Resource with Economic Parameters based on $1300/oz Au and $3.00/lb Cu | ||||||||||||
Tonnes |
Grade |
Grade |
Gold |
Copper |
Copper |
|||||||
Measured | 10 | 1.02 | 0.18 | 318 | 17 | 38 | ||||||
Indicated | 1,095 | 0.72 | 0.10 | 25.409 | 1,126 | 2,482 | ||||||
Total M&I | 1,105 | 0.72 | 0.10 | 25.727 | 1,143 | 2,520 | ||||||
Inferred | 900 | 0.68 | 0.08 | 19.692 | 709 | 1,564 | ||||||
Notes: As on the table above. |
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Projected metal recoveries from the respective process plants are:
Process Plant & Material Type | % Au Recovery | % Cu Recovery | |||
CIP LEACH PLANT (SMALL PLANT) | |||||
Oxide Saprolite | 98.0 | 0 | |||
Sulphide Saprolite low Cu | 86.8 | 0 | |||
Hard Rock low Cu | 87.6 | 0 | |||
FLOTATION PLANT (LARGE PLANT) | |||||
Sulfide Saprolite high Cu | 83.2 | 54.5 | |||
Hard Rock low Cu | 83.2 | 55.5 | |||
Hard Rock high Cu | 83.2 | 87.0 |
Note: The hard rock and sulphide saprolite was divided into high copper and low copper using a 0.02% Cu threshold. |
Years 1 Through 10 | Years 11 Through 45 | ||||||||
Production Plan | Tpd | Mtpa | Tpd | Mtpa | |||||
Leach Plant (Small Plant)1 | 15,000 | 5.8 | 35,000 | 58 | |||||
Flotation Plant (Large Plant) | 140,000 | 49.0 | 105,0002 | 36.75 |
1 |
The leach plant will be expanded by Year 11 to accommodate the higher tonnage of material. |
|
2 |
Feed to the flotation plant reduced to approximately 105,000 tpd and increased for oxide leach plant to 35,000 tpd to account for reduced higher grade copper hard rock available to blend into flotation plant. Low grade copper hard rock material will be ground in the existing milling circuit and processed in the leach plant. |
|
KEY ECONOMIC PARAMETERS:
Mineral Resources are estimated at an NSR cut-off value of
DEVELOPMENT CAPITAL COST SUMMARY |
|||
DESCRIPTION | Total $ M | ||
Direct Costs | |||
Mining | $ | 436.6 | |
Processing | 923.5 | ||
Engineering & Geology | 15.9 | ||
ARD Plant | 2.3 | ||
Site Infrastructure | 111.8 | ||
Total Direct Costs | 1,490.1 | ||
Indirect Costs | |||
Construction Indirects | 312.3 | ||
Owner's Cost | 310.4 | ||
Total Indirect Costs | 622.7 | ||
Contingency | 457.8 | ||
Total | $ | 2,570.6 | |
ALL-IN SUSTAINING COSTS COMPOSITION |
||||||||
Item | $M | $/ oz Au | ||||||
Site Costs | ||||||||
Mining | $ | 5,791 | $ | 154 | ||||
Process | 9,881 | 263 | ||||||
G & A | 2,654 | 71 | ||||||
Other Infrastructure | 289 | 8 | ||||||
Total Site Costs | 18,614 | 495 | ||||||
Offsite Costs | ||||||||
Transportation | 728 | 19 | ||||||
Off-site Treatment | 1,077 | 29 | ||||||
Total Off-site Costs | 1,805 | 48 | ||||||
Direct Cash Costs | 20,419 | 542 | ||||||
Ag and Cu By-Product Credit | (9,875 | ) | (262 | ) | ||||
Total Direct Cash Costs (NBP) | 10,543 | 280 | ||||||
NSR Royalty | 3,263 | 87 | ||||||
Special Advantages Tax | 1,710 | 45 | ||||||
STI Contributions | 588 | 16 | ||||||
Total Indirect Cash Costs | 5,561 | 148 | ||||||
Total Production Costs | 16,104 | 428 | ||||||
Sustaining Capital Cost | 1,942 | 52 | ||||||
Closure/Reclamation Capital | 150 | 4 | ||||||
Corporate G&A | - | - | ||||||
Off-mine Exploration | - | - | ||||||
Total Sustaining Costs | 2,092 | 56 | ||||||
Total All-in Sustaining Costs | $ | 18,196 | $ | 483 | ||||
OPERATING COST SUMMARY |
||
Description | LoM Cost $/t milled | |
Mining (1.36/t mined) |
$ 2.89 |
|
Process | 4.93 | |
G&A | 1.32 | |
Other Infrastructure | 0.14 | |
Direct Operating Costs | 9.29 | |
Concentrate Freight | 0.36 | |
Off-site Costs | 0.54 | |
Total Before Royalties/Taxes | 10.19 | |
Royalties/Production Taxes | 2.77 | |
Total |
$ 12.96 |
|
The next phase of the Project’s development is the detail design work for the Small Plant and related facilities in order to implement fast track development and production. In addition, we expect to initiate the feasibility study on the Large Plant and concurrent detailed engineering.
Proposals are currently being evaluated for a drilling program that is
expected to commence in 2018 which will support the overall project
development activities, water management wells, and test areas where
additional resource potential is evident. Siembra Minera has also now
established local management offices in
The PEA will be available to the public at www.sedar.com and www.sec.gov, as well as the Company’s website at www.goldreserveinc.com within 45 days of the date of this release.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Further information regarding the Company can be located at www.goldreserveinc.com, www.sec.gov and www.sedar.com.
Technical Disclosure
The scientific and technical information contained in this release,
including resource estimates, pit design, mine plan, flowsheet design,
design criteria, project layout, infrastructure requirements, capital
and operating estimates was prepared by
Mineral resource estimates reported herein have been classified as
Measured, Indicated or Inferred based on the confidence of the input
data, geological interpretation and grade estimation parameters. The
Company is not currently aware of any known factors that are reasonably
likely to have a negative material impact on the Company’s mineral
resources. The mineral resource estimates were prepared in accordance
with NI 43-101 and classifications adopted by the
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized.
Cautionary Statement Regarding Forward-Looking Information
This release contains “forward-looking statements” within the meaning of applicable U.S. federal securities laws and “forward-looking information” within the meaning of applicable Canadian provincial and territorial securities laws and state Gold Reserve’s and its management’s intentions, hopes, beliefs, expectations or predictions for the future including without limitation statements with respect to the price of copper and gold; the estimation of mineral resources; the timing and amount of estimated future production; capital expenditures and related funding, operating costs, and projected cash flows; the continued evaluation of the Project and the economic analysis provided in the PEA, including the timeline and estimated capital required and the assessment of financial and strategic options; the expectation of meeting production targets; costs of production; estimated mine life; and net present values associated with the Project. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “guidance”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “believes”, or variations or comparable language of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.
We caution that such forward-looking statements involve known and
unknown risks, uncertainties and other risks that may cause the actual
outcomes, financial results, performance, or achievements of
The terms "mineral resource," "measured mineral resource," "indicated
mineral resource" and "inferred mineral resource" are defined in and
required to be disclosed by NI 43-101. However, these terms are not
defined terms under SEC Industry Guide 7 and normally are not permitted
to be used in reports and registration statements filed with the
View source version on businesswire.com: https://www.businesswire.com/news/home/20180319006306/en/
Source:
Gold Reserve Inc.
A. Douglas Belanger, 509-623-1500
President
Fax:
509-623-1634