ONTARIO – Toronto-based Gowest Gold has released a promising preliminary economic assessment for the Frankfield East gold deposit 42 km northeast of Timmins. The study confirms a pre-tax net cash flow of US$265 million and a 3.3 year payback period based on the current resources with a production rate averaging 95,000 oz/y of gold over a 10-year mine life.
The PEA was prepared using a gold price of US$1,200/oz. The initial capital cost will be US$167 million to build an underground mine and 1,500-t/d mill. Estimated cash costs would be US$660/oz and gold recovery would be 95%. Consideration is also being given to treating the Frankfield ore at an existing mill and shipping the concentrate to a third party for refining. This processing option has the potential to significantly reduce capital requirements and increase cash flows.
Details of the PEA are contained in a news release dated Nov. 14, 2011, posted at www.GowestGold.com.