Canadian Mining Journal

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GOLD STUDY: Blackwater PEA proposes more than 500,000 oz/year output

BRITISH COLUMBIA – Vancouver-based New Gold says the preliminary economic assessment is positive for its Blackwater gold project 150 km south of Vanderhoof. The study estimates annual production at 507,000 oz of gold and 2.04 million oz...



BRITISH COLUMBIA – Vancouver-based New Gold says the preliminary economic assessment is positive for its Blackwater gold project 150 km south of Vanderhoof. The study estimates annual production at 507,000 oz of gold and 2.04 million oz of silver at total cash costs per ounce sold, net of by-product sales, of US$536/oz. The mine would have a 15-year life.

The base case after tax net present value (5% net) is $1.1 billion and the after tax internal rate of return will be 14.0% assuming a gold price of US$1,275/oz. When a price of US$1,775/oz is used, the NPV jumps to $2.8 billion and the IRR to 25.8%. Total project development costs including contingency are estimated at US$1.81 billion.

New Gold said a truck-and-shovel open pit and 60,000 t/d whole-ore-leach and CIP processing plant could begin production in 2017. Using a 0.30 g/t AuEq cut-off, the property contains an indicated resource of 267.1 million tonnes grading 4.3 g/t Au and 7.52 g/t Ag plus an inferred resource of 120.5 million tonnes at 7.3 g/t Au and 7.30 g/t Ag.

The feasibility study is due in Q4 2013. Additional details are available at NewGold.com in the news release dated Sept. 20, 2012.