Las Minas PEA Financial Highlights, including Metal Prices Sensitivity
Base Case (BC) | Spot Price ( | Upside | Downside | |
Au (US$/oz) | 1625 | 1830 | 2000 | 1200 |
Ag (US$/oz) | 20 | 25.5 | 28 | 14 |
Cu (US$/lb) | 3.25 | 4.45 | 4.75 | 2.25 |
Magnetite Concentrate (US$/dmt) | 100 | 213.5 | 220 | 65 |
Cumulative Cash Flow (US$M) | $99 | - | ||
After Tax NPV @ 5% (US$M) | $55 | - | ||
After Tax NPV @ 8% (US$M) | $35 | - | ||
After Tax IRR (%) | 16% | 31% | 35% | -5% |
Capex Payback (Years) | 4.4 | 2.8 | 2.6 | n/a |
EBITDA for First Year of Full Production (US$M) | $43 |
Notes:
Metal prices for Upside and Downside cases represent the individual metal historical 3-year highs and lows.
The PEA is preliminary in nature and is based on 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 preliminary economic assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The Company also announces a new mineral resource estimate, prepared in accordance with National Instrument 43-101, of 443,000 gold equivalent ounces within indicated resources of 4.13 million tonnes at grades of 1.96 g/t gold, 4.64 g/t silver, 1.08% copper, 14.77% magnetite and 361,000 gold equivalent ounces within inferred resources of 5.20 million tonnes at grades of 1.44 g/t gold, 5.97 g/t silver, 0.95% copper, 17.54% magnetite, all reported at a
Exploration Potential of
Near the
The mineral potential of the region is well known, being positioned over an active continental subduction zone. Similar geological features and dozens of mineral showings appear over an area of >100km2 centred on
PEA Conceptual Design Summary
The concept for recovery of the
Las Minas Resource Exploitation - PEA Highlights and Project Performance | |
Total Tonnes Mined | 4,043 kt |
Diluted Grades | |
Gold | 1.84 g/t |
Silver | 5.53 g/t |
Copper | 1.06% |
Magnetite | 15.7% |
8.5 years | |
Average Annual Production | |
Gold Equivalent Ounces | 45,000 |
Gold Ounces | 21,000 |
Silver Ounces | 24,000 |
Copper Pounds | 9,533,000 |
Magnetite Concentrate Tonnes | 75,000 |
Average Cash Cost Per Gold Equivalent Ounce | |
Average Cash Cost Per Gold Ounce, Net of By-Product Credits | |
Average AISC Per Gold Equivalent Ounce | |
Average AISC Per Gold Ounce, Net of By-Product Credits | |
Initial CAPEX | |
Sustaining CAPEX | |
Processing Plant Recoveries | |
Gold | 80% |
Silver | 70% |
Copper | 90% |
Magnetite | 90% |
Notes:
LOM Metal Prices -
The following is the projected production for the
Las Minas PEA Mine Production from Indicated and Inferred Resources
Production Year | Au (K oz) | Ag (K oz) | Cu (M lbs) | Magnetite (k tonnes) |
1 | 32 | 57 | 4 | 32 |
2 | 29 | 96 | 13 | 79 |
3 | 32 | 76 | 11 | 66 |
4 | 34 | 65 | 10 | 62 |
5 | 31 | 84 | 13 | 66 |
6 | 27 | 91 | 13 | 86 |
7 | 23 | 108 | 13 | 103 |
8 | 23 | 92 | 12 | 94 |
9 | 9 | 48 | 6 | 48 |
Total | 239 | 719 | 94 | 635 |
Notes:
Assumed metal prices over life of mine: Gold
Geology
The
Copper and gold mineralization have been recognized in three settings within the
Proximal skarn developed along marble-diorite contacts, both as exoskarn developed within the sedimentary rock, and as endoskarn developed within the intrusion. The skarn alteration has a typical zoning of marble-exoskarn-endoskarn-diorite. The distinction between exoskarn and endoskarn can be very difficult because the skarn alteration (especially garnet replacement) can be texturally destructive.
Proximal skarn alteration is dominantly garnet-rich with lesser amounts of pyroxene, and locally garnet appears to have replaced pyroxene. The skarn contains variable amounts of magnetite and lesser sulfide minerals.
Within the
Gold-silver-copper mineralization at
The
Mineral Resource Estimates
The mineral resource estimates for
Within the
The gold, copper, silver and iron grades were estimated into a three-dimensional, 12 m by 12 m by 3 m block model which was sub-blocked to 0.5 m in three dimensions. Gold (Au g/t), copper (Cu%), silver (Ag g/t) and total iron (Fe%) block grades were estimated from capped composited samples in a single pass. The mineral resources were estimated using ordinary kriging interpolation for the continuous mineralized domains. Search ellipse anisotropy and orientation were guided by the orientation of the domain solids models and omni-directional ellipsoids were employed in the individual zones.
Magnetite estimates were based on applying mathematical regression, as derived from SATMAGAN testing results, to the Total Fe% estimates. A total of 2,601 specific gravity readings were derived from measurements within individual rock types and estimated on a block-by-block basis using inverse distance.
Mineral resources are classified in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves, and the 2019 CIM Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines.
Mineral Resources are classified under the categories of Indicated and Inferred according to CIM guidelines. Mineral Resource classification was based primarily on drill hole spacing and on continuity of mineralization. There are no measured resources at
Final resource classification shells were manually constructed on plan sections and all resources are constrained within lithological domains and by the continuous solids. Final Resource classification shells were manually constructed on sections. These interpreted boundaries were created for the indicated and inferred thresholds in order to exclude orphans and reduce potential “spotted dog” effect.
This estimate is also based upon the reasonable prospect of eventual economic extraction using estimates of reasonable operating costs and price assumptions. The mineral resources do not represent an attempt to estimate Mineral Reserves.
The
Las Minas Deposit Indicated and Inferred Mineral Resource Estimate at a
Class | Tonnes | NSR (US$) | Au (g/t) | Au ('000 ounces) | Ag (g/t) | Ag ('000 ounces) | Cu (%) | Cu ('000 lbs) | Fe Magnetite (%) | Fe Magnetite ('000 tonnes) | AuEQ (g/t) | AuEq ('000 ounces) |
Indicated | 4,133 | 138.58 | 1.96 | 260 | 4.64 | 617 | 1.08 | 98,311 | 14.77 | 610 | 3.34 | 443 |
Inferred | 5,200 | 112.83 | 1.44 | 241 | 5.97 | 997 | 0.95 | 108,802 | 17.54 | 912 | 2.16 | 361 |
Notes:
- Mineral Resource Statement prepared by
Garth Kirkham (Kirkham Geosystems Ltd. ) in accordance with NI 43-101. - Effective date:
July 27, 2021 . All Mineral Resources have been estimated in accordance withCanadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under NI 43-101. - Mineral resources reported demonstrate reasonable prospect of eventual economic extraction, as required under NI 43-101. Mineral resources are not Mineral Reserves and do not have demonstrated economic viability.
- Underground Mineral Resources are reported at a cut-off grade of
US$80 NSR. Cut-off grades are based on a price ofUS$1,700 /oz gold,US$20 /oz silver,US$3.50 /lb copper andUS$100 /tonne magnetite concentrate and a number of operating cost and recovery assumptions, including a reasonable contingency factor. - Numbers are rounded.
- An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
The Mineral Resources may be affected by subsequent assessment of mining, environmental, processing, permitting, taxation, socio-economic and other factors.
The table below illustrates the sensitivity of the indicated and inferred mineral resource estimate to changes in cut-off grade. The base case at a cut-off grade of
Sensitivity of Las Minas Indicated and Inferred Mineral Resource Estimate to Cut-Off Grade (base case is highlighted)
Class | NSR COG (US$) | Tonnes | NSR (US$) | Au (g/t) | Au ('000 ounces) | Ag (g/t) | Ag ('000 ounces) | Cu (%) | Cu ('000 lbs) | Fe Magnetite (%) | Fe Magnetite ('000 tonnes) | AuEQ (g/t) | AuEq ('000 ounces) |
Indicated | >=60 | 5,431 | 122.00 | 1.71 | 299 | 4.27 | 746 | 0.95 | 114,341 | 13.84 | 752 | 2.94 | 514 |
>=70 | 4,750 | 130.25 | 1.83 | 280 | 4.44 | 678 | 1.02 | 106,373 | 14.35 | 682 | 3.14 | 479 | |
>=80 | 4,133 | 138.58 | 1.96 | 260 | 4.64 | 617 | 1.08 | 98,311 | 14.77 | 610 | 3.34 | 443 | |
>=90 | 3,549 | 147.47 | 2.09 | 239 | 4.87 | 555 | 1.14 | 89,467 | 15.31 | 543 | 3.55 | 405 | |
>=100 | 3,009 | 156.99 | 2.24 | 217 | 5.12 | 495 | 1.21 | 80,326 | 16.19 | 487 | 3.77 | 365 | |
>=110 | 2,572 | 165.96 | 2.38 | 197 | 5.36 | 444 | 1.27 | 72,146 | 16.86 | 434 | 3.98 | 329 | |
Inferred | >=60 | 6,769 | 102.84 | 1.32 | 287 | 5.49 | 1,195 | 0.86 | 128,586 | 16.23 | 1,099 | 1.97 | 428 |
>=70 | 6,012 | 107.69 | 1.38 | 266 | 5.73 | 1,108 | 0.91 | 119,959 | 16.95 | 1,019 | 2.06 | 398 | |
>=80 | 5,200 | 112.83 | 1.44 | 241 | 5.97 | 997 | 0.95 | 108,802 | 17.54 | 912 | 2.16 | 361 | |
>=90 | 4,228 | 119.33 | 1.54 | 209 | 6.19 | 842 | 1.00 | 93,057 | 18.00 | 761 | 2.29 | 311 | |
>=100 | 3,226 | 127.04 | 1.67 | 173 | 6.44 | 668 | 1.05 | 74,354 | 18.24 | 589 | 2.44 | 253 | |
>=110 | 2,106 | 138.88 | 1.84 | 125 | 7.07 | 479 | 1.14 | 52,930 | 18.42 | 388 | 2.66 | 180 |
Notes:
- Mineral Resource Statement prepared by
Garth Kirkham (Kirkham Geosystems Ltd. ) in accordance with NI 43-101. - Effective date:
July 27, 2021 . All Mineral Resources have been estimated in accordance withCanadian Institute of Mining and Metallurgy and Petroleum (“CIM”) definitions, as required under NI 43-101. - Mineral resources reported demonstrate reasonable prospect of eventual economic extraction, as required under NI 43-101. Mineral resources are not Mineral Reserves and do not have demonstrated economic viability.
- Underground Mineral Resources are reported at a cut-off grade of
US$80 NSR. Cut-off grades are based on a price ofUS$1,700 /oz gold,US$20 /oz silver,US$3.50 /lb copper andUS$100 /tonne magnetite concentrate and a number of operating cost and recovery assumptions, including a reasonable contingency factor. - Numbers are rounded.
- An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
The Mineral Resources may be affected by subsequent assessment of mining, environmental, processing, permitting, taxation, socio-economic and other factors.
Mining Methods
The mining methods proposed are a split of lateral and stoping methods. Long-hole stopes account for 52% of production, 41% from room and pillar, and the remaining 7% from development. Full production of 1,400t/d is achieved in year 2 and sustained for the remainder of the mine life. The design allows for multiple production areas. Stopes are sequenced using a primary-secondary layout and are backfilled using cemented tailings (paste) and development waste rock. Room and pillar areas are mainly mined as a single lift; however, in areas where the mineralization is thicker, multiple lifts might be required. Development waste and lightly cemented tailings are used as backfill in the room and pillar zones as a way of decreasing waste and tailings quantities on surface. The mine will be developed using a conventional mechanized underground mining fleet consisting of development jumbos, longhole drills, bolters, LHDs, and haul trucks. The equipment and operation will be owner operated. Stope optimization and design was based on geotechnical design criteria and a NSR cut-off value of
Material Handling
An underground crusher would be located in the upper mining area of
% of total | Tonnes x 1000 | |
Development | 7% | 279 |
Long-hole Stoping | 52% | 2,087 |
Room and Pillar | 41% | 1,677 |
Total | 100% | 4,043 |
Development Type | Metres |
Lateral Development – Waste | 8,426 |
Lateral Development – Mineralized (includes Room & Pillar) | 20,488 |
260 | |
29,174 |
Processing
The
The copper in this deposit is mostly found in chalcopyrite, bornite and chalcocite minerals which tend to float very well. The gold is mostly associated with sulphide minerals and therefore recovers well to the flotation concentrate. The flotation circuit utilizes a primary grind of 150 µm, but the testwork does leave room for a coarser grind to be tested in the future.
The process recovers copper and gold at 90% and 85% respectively, into a copper concentrate with high gold grades (>25 g/t), and magnetite recoveries of over 90%. The magnetite concentrate from the conceptual design would be sold to iron ore smelters, but testwork identified that upgrading to magnetite for dense media separation is possible.
Infrastructure & Tailings Management
The village of
Within the resource area, there is a small hydroelectric facility supplied by steel penstock tubes from a reservoir several hundred metres up the ridge. This has been assessed as the most viable and efficient option for power supply of the project while supporting the local power plant. The area has an existing road network, abundant water and a highly collaborative local labour pool.
The conceptual design off the overall project layout considers the natural topography when locating the plant, camp, offices and truck shop, in conjunction with the town of
Tailings generated from mineral processing will be stored in an engineered TSF. Filtered (dry stack) tailings technology will be utilized for removal of free draining liquids from the tailings during operations, and water conservation. Approximately 50% of the generated tailings will be stored on surface in the TSF after removing magnetite and using paste tailings for underground mine backfill. Filtered tailings will be delivered by truck and spread and compacted in the TSF. The facility will be developed in stages over the life of the project and at closure the tailings surface will be covered with a suitable growth media and revegetated.
PEA - Planned Costs | (US$/t processed) |
Mining | |
Processing | |
G&A | |
Treatment |
Metal Prices Sensitivity
20% < BC | 10% < BC | Base Case (BC) | 10% > BC | 20% > BC | |
Cumulative Cash Flow (US$M) | $99 | ||||
After Tax NPV @ 5% (US$M) | - | $55 | |||
After Tax NPV @ 8% (US$M) | - | $35 | |||
After Tax IRR (%) | 3% | 10% | 16% | 21% | 26% |
Capex Payback (Years) | 7.1 | 5.4 | 4.4 | 3.7 | 3.2 |
EBITDA for First Year of Full Production (US$M) | $43 |
Notes:
Base Case metal prices over life of mine: Gold
Quality Assurance and Quality Control (QA/QC)
All
Samples were prepared following protocol for mineral sample preparation including weighing, drying, crushing, sieving, splitting, and pulverization. Samples were analyzed for gold and silver using fire assay techniques, and for copper and 33 other elements using inductively coupled plasma - atomic emission spectroscopy (“ICP-AES”) techniques. SGS has used the same analytical methods and procedures for all of Mexican Gold’s drill samples commencing in 2011.
QA/QC samples were inserted into the sample stream sent to SGS on a regular basis for all Mexican Gold drill campaigns. The QA/QC samples consisted of pulp blanks, certified reference materials, and duplicate samples. The duplicates samples consisted of field duplicates (quarter-core splits), preparation pulp duplicates from coarse rejects, and second-lab pulp re-assays. The QA/QC samples have made up about 10% of the total samples analyzed.
Qualified Persons
The scientific and technical data contained in this news release pertaining to the
The scientific information in this news release was reviewed and approved by
PEA Report
The PEA for the
About
Mexican Gold is a Canadian-based mineral exploration and development company committed to building long-term value through ongoing discoveries and strategic acquisitions of prospective precious metals and copper projects in the
For more information, please contact:
Philip O’Neill – CEO, President, and Director
E-mail: info@mexicangold.ca
Website: www.mexicangold.ca
CAUTIONARY NOTES
PRELIMINARY ECONOMIC ASSESSMENT
A preliminary economic assessment should not be considered a prefeasibility study or feasibility study, as the economics and technical viability of the
FORWARD LOOKING STATEMENTS
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward- looking information includes, without limitation, information with respect to proposed exploration and development activities and their timing, resource estimates and potential mineralization, the PEA, including estimates of capital and sustaining costs, anticipated internal rates of return, mine production, estimated recoveries, mine life, estimated payback period, net present values, and earnings before interest, depreciation and amortization. Generally, forward-looking information can be identified by the use of terminology such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes”, “potential”, or variations of such words, or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will be taken”, “occur” or “be achieved”. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, without limitation, forward-looking statements and assumptions pertaining to the following: uncertainty as a result of the preliminary nature of the PEA and the Company’s ability to realize the results of the PEA, uncertainty regarding the inclusion of inferred mineral resources in the mineral resource estimate and the Company’s ability to upgrade the inferred mineral resources to a higher category, uncertainty regarding the ability to convert any part of the mineral resource into mineral reserves, uncertainty involving resource estimates and the ability to extract those resources economically, or at all, uncertainty involving drilling programs and the Company’s ability to expand and upgrade existing resource estimates, the regulatory process and actions, and those risk factors identified in the Company’s annual information form and management’s discussion and analysis. Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made in light of its experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances at the date such statements are made. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
Source:
2021 GlobeNewswire, Inc., source