ONTARIO – Toronto-based
Richmont Mines has received the preliminary economic assessment for the expansion of the Island Gold mine, calling this the first step in a multi-phase transformation of the mine. The mine, located 83 km northeast of Wawa, is returning excellent results as exploration continues to outline high grade mineralization.
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Areas of the Island Gold mine covered by the preliminary economic assessment. Credit: Richmont Mines.[/caption]
At the end of 2016, the Island Gold mine has proven and probable reserves of 2.6 million tonnes at an average grade of 9.17 g/t gold, measured and indicated resources of 500,000 tonnes at a grade of 5.94 g/t, and inferred resources of 3.0 million tonnes at 10.18 g/t. The PEA is robust despite including only 24% of the current inferred resources.
A phase 2 expansion would consider mining below the 1,000-metre level and east of the area covered by the PEA. None of the mineralization in these areas was included in the PEA.
The PEA sees annual production from the mine rising to 125,000 oz. of gold annually for eight years beginning in 2019 after ramp-up in 2018. All-in sustaining costs are estimated at $835/oz (US$620). Phase one needs a capital investment of $28.2 million to boost output to 1,100 t/d from 900 t/d. That translates to a net cash flow after capex of $749 million at a spot gold price of $1,700/oz (US$1,250) in the best case scenario. The worst case, a low gold price of $1,550/oz (US$1,150), would see cash flow cut to $615 million.
The technical and financial portion of the PEA presentation are available at the Richmont website by
clicking here.
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