QUEBEC – Typhoon Exploration of Laval, QC, must be pleased with the positive preliminary economic assessment for the Fayolle gold deposit 30 km from Rouyn-Noranda. The PEA examined the potential of both an open pit and an underground option.
The open pit would have a three-year mine life (including a year of pre-production) at a mining rate of 1,000 tonnes of ore per day. The ore would be trucked 40 km to IamGold's Westwood mill for processing. The pit is considered to have a global undiluted mineral resource of 1,814,800 tonnes at 2.68 g/t Au (representing 156,497 oz of gold) at a cut-off of 0.84 g/t Au.
Pre-production capital costs, sustaining and reclamation costs for an open pit total $10.29 million (respectively $4.96 million, $930,000 and $4.4 million. Using a gold price of US$1,513/oz, the pre-tax net present value (7% discount) is $30.15 million and the internal rate of return is 166%. Even after taxes, the IRR would be 110%.
An underground mine would be accessed by portal and ramp, and the suitability of cut and fill, longhole stoping, and room and pillar methods were evaluated. Production would begin at 750 t/d and over a 27-month mine life (including one year of development) would increase to 1,000 t/d. Again, the ore would be processed at the Westwood mill. The underground scenario has a global undiluted mineral resource of 548,500 tonnes at 5.75 g/t Au (representing 101,399 oz of gold) at the same minimum cut-off grade of 2.5 g/t Au.
The pre-production capital costs and sustaining costs for an underground project are evaluated at $22.7 million. The financial analysis, using a price of gold of US$1,518 per ounce, indicates a NPV (using a 7% discount rate) of $5.61 million with a pre-tax IRR of 26.21%. On an after tax basis, the IRR is estimated at 19.12%.
The PEA will be posted shortly at ExplorationTyphon.com.
Aurizon Mines can acquire a 65% interest in the Fayolle property by spending a total of $25 million.