VANCOUVER, British Columbia,
Feb. 20, 2018 /CNW/ -- Tahoe
Resources Inc. ("Tahoe" or the "Company") (TSX: THO, NYSE:
TAHO) is pleased to announce the results of its preliminary
economic assessment for La Arena II, a copper-gold porphyry project
in Peru. Tahoe expects to continue
its evaluation of La Arena II with the intent of advancing it to
the prefeasibility or feasibility stage. The timeline and estimated
capital required to advance the project to the next stage are under
review. The project will be evaluated in the context of existing
operations and pipeline opportunities with the intention of
progressing it responsibly in order to maximize value for Tahoe's
shareholders.
La Arena II PEA Highlights:
- Total Measured and Indicated Mineral Resources of 5.6 million
ounces of gold and 5.8 billion pounds of copper and Inferred
Mineral Resources total 683 thousand ounces of gold and 349 million
pounds of copper
- 21 year mine life
- Average annual production of 149 thousand ounces of gold and
207 million pounds of copper, plus an additional 226 thousand
ounces of gold and 115 million pounds of copper recovered over a
two year pre-production period
- Total gold and copper recovered in doré and concentrate over
the mine life is estimated to be 3.4 million ounces of gold and 4.5
billion pounds of copper
- Open pit mining rate of 80,000 tonnes of mill feed per day,
with flotation processing to create a high-quality copper+gold
concentrate, with run-of-mine heap leaching of oxide gold cap
- Capital costs estimated at $1.36
billion for initial project capital (net of pre-production
operating credit) and $1.09 billion
for sustaining capital over the mine life
- Average annual after-tax cash flow of $273 million
- Average co-product cost of $600
per ounce gold and $1.55 per pound
copper (1). Average annual cash operating costs
are $395 million. Total operating
cost is $12.87 per tonne
processed
- The base case economic estimate is an after tax net present
value of $824 million, using a 8%
discount rate, and an after-tax internal rate of return of 14.7%
with a payback period of 4.6 years at metal prices of $3.30/lb copper and $1,300/oz gold
- Drilling at depth demonstrates the continuation of
mineralization below the bottom of the resource pit shell at
similar grades
- Existing infrastructure synergies between at La Arena and La
Arena II include skilled workforce, power line, and roads
(1) Please refer to "Non-GAAP Financial
Measures" in this press release
Mineral Resources as
of January 1, 2018 for the La Arena II project are summarized as
follows:
|
|
LA ARENA II
MINERAL RESOURCES AS OF JANUARY 1, 2018
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Copper
(%)
|
Gold
(koz)
|
Copper
(Mlbs)
|
Oxide
|
Measured
|
5.9
|
0.27
|
-
|
51
|
-
|
|
Indicated
|
43.2
|
0.28
|
-
|
388
|
-
|
|
Measured +
Indicated
|
49.1
|
0.28
|
-
|
440
|
-
|
|
Inferred
|
41.3
|
0.26
|
-
|
349
|
-
|
Sulfide
|
Measured
|
149.7
|
0.25
|
0.39
|
1,214
|
1,279
|
|
Indicated
|
543.5
|
0.23
|
0.38
|
3,984
|
4,511
|
|
Measured +
Indicated
|
693.2
|
0.23
|
0.38
|
5,197
|
5,790
|
|
Inferred
|
50.4
|
0.21
|
0.31
|
344
|
349
|
(1)
Totals may not sum due to rounding
|
(2)
Mineral Resources are reported within a $4.00/lb copper and
$1,500/oz gold pit shell using cut-off grades of 0.10 g/t gold for
oxide Mineral Resources and 0.18% copper-equivalent for sulfide
Mineral Resources
|
The 2018 La Arena II PEA supersedes the 2015 feasibility study.
The prior feasibility study considered a small capital-constrained
project with restrictive financial hurdles. The resulting Mineral
Reserve estimate presented in the prior study represented only a
small portion of the total Mineral Resources. Tahoe's PEA includes
new exploration drilling results and re-evaluates the La Arena
copper-gold porphyry project in the context of a long-term
copper-gold project designed to world standards.
The prior study included Probable Mineral Reserves of 63.1
million tonnes at average grades of 0.43% copper and 0.31 g/t gold
containing 579 million pounds of copper and 633 thousand ounces of
gold. There are no Mineral Reserves reported in the 2018 PEA as the
scope of the project has changed significantly with new exploration
results, a refined geologic model, an updated Mineral Resource
estimate, increased mining and processing rates, modified
processing scheme, and the use of alternative tailings disposal
facilities. While a portion of the data generated for the 2015
feasibility study provided support for some of the assumptions
incorporated into the 2018 PEA, much of the mining, processing,
geotechnical, hydrological, social, and capital and operating cost
parameters used in the 2015 study are no longer applicable to the
project as envisioned in the 2018 PEA.
For more information, please refer to the new NI 43-101
technical report for the La Arena property, Technical Report on
the La Arena Project, Peru,
which includes an update of the existing La Arena Mine oxide gold
heap leach operation and a PEA of the La Arena II copper-gold
porphyry project. The technical report is available on the
Company's website at
www.tahoeresources.com/operations/la-arena-mine/ and on
SEDAR at www.sedar.com (and Edgar www.sec.gov).
NI 43-101 required disclosure: Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability. The
La Arena II PEA is preliminary in nature and includes 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 PEA will be realized.
About Tahoe Resources Inc.
Tahoe's strategy is to responsibly operate mines to world
standards and to develop high quality precious metals assets in the
Americas. Tahoe is a member of the S&P/TSX Composite and TSX
Global Mining indices and the Russell 3000 on the NYSE. The Company
is listed on the TSX as THO and on the NYSE as TAHO.
Technical Disclosure
Technical information in this press release has been approved by
Charlie Muerhoff, Vice President
Technical Services, Tahoe Resources Inc., a Qualified Person as
defined by NI 43-101.
Mineral Resource estimates reported herein have been classified
as Measured, Indicated or Inferred based on the confidence of the
input data, geological interpretation and grade estimation
parameters. Mineral Reserve estimates reported herein are
based on known inputs that include metallurgical performance,
taxation/royalty obligations, geologic and geotechnical
characterization, operational costs, and other economic parameters.
The company is not currently aware of any known factors that are
reasonably likely to have a negative material impact on the
Company's Mineral Resources or Mineral Reserves. The Mineral
Resource and Mineral Reserve estimates were prepared in accordance
with NI 43-101 and classifications adopted by the CIM Council.
Mineral Resources are inclusive of Mineral Reserves.
The basis of the Mineral Resource and Mineral Reserve estimates
for the La Arena mine and the Mineral Resource estimate for the La
Arena II project is from Technical Report on the La Arena
Project, Peru, dated
February 20, 2018 with an effective
date of January 1, 2018.
For further information, please contact:
Tahoe Resources Inc.
Alexandra Barrows, Vice President
Investor Relations
investors@tahoeresources.com
Tel: 775-448-5812
CAUTIONARY NOTE TO INVESTORS IN THE
UNITED STATES REGARDING RESOURCES AND RESERVES
The Mineral Resource and Mineral Reserve estimates contained in
this press release have been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ from the requirements of
United States securities laws and
use terms that are not recognized by the United States Securities
and Exchange Commission ("SEC"). Canadian reporting requirements
for disclosure of mineral properties are governed by NI 43-101. The
definitions used in NI 43-101 are incorporated by reference from
the CIM Definition Standards adopted by CIM Council on May 10, 2014 (the "CIM Definition Standards").
U.S. reporting requirements are governed by the SEC Industry Guide
7 ("Industry Guide 7") under the United States Securities Act of
1933, as amended. These reporting standards have similar goals in
terms of conveying an appropriate level of confidence in the
disclosures being reported, but embody difference approaches and
definitions. For example, the terms "Mineral Reserve", "Proven
Mineral Reserve" and "Probable Mineral Reserve" are Canadian mining
terms as defined in in NI 43-101, and these definitions differ from
the definitions in Industry Guide 7. Under Industry Guide 7
standards, a "final" or "bankable" feasibility study is required to
report reserves and the primary environmental analysis or report
must be filed with the appropriate governmental authority. Further,
under Industry Guide 7, mineralization may not be classified as
"reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve determination is made.
While the terms "Mineral Resource", "Measured Mineral Resource",
"Indicated Mineral Resource" and "Inferred Mineral Resource" are
defined in and required to be disclosed by NI 43-101, these terms
are not defined terms under Industry Guide 7 and are normally not
permitted to be used in reports and registration statements filed
with the SEC. United States
readers are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
In addition, "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. A significant amount of
exploration must be completed in order to determine whether an
Inferred Mineral Resource may be upgraded to a higher category.
Under Canadian regulations, estimates of Inferred Mineral Resources
may not form the basis of feasibility or pre-feasibility studies,
except in rare cases. United
States readers are cautioned not to assume that all or any
part of an Inferred Mineral Resource exists or is economically or
legally mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations if such disclosure
includes the grade or quality and the quantity for each category of
Mineral Resource and Mineral Reserve; however, the SEC normally
only permits issuers to report mineralization that does not
constitute "reserves" by SEC standards as in place tonnage and
grade without reference to unit measures. Accordingly, information
contained in this press release containing descriptions of the
Tahoe's mineral deposits may not be comparable to similar
information made public by United
States companies subject to the reporting and disclosure
requirements under the United
States federal securities laws and the rules and regulations
thereunder.
NON-GAAP FINANCIAL MEASURES
The Company has certain non-GAAP financial measures in this
document which include total cash costs and total cash costs on a
co-product basis. These measures are not defined under IFRS and
should not be considered in isolation. The La Arena II project is
expected to produce both gold and copper, neither of which
comprises more than 80% of the revenues of the project. The Company
believes that these measures may provide investors and analysts
with useful information about the project and provide a meaningful
comparison to other mining companies. Accordingly, these measures
are intended to provide additional information and should not be
substituted for GAAP measures. These non-GAAP financial measures
may be calculated differently by other companies depending on the
underlying accounting principles and policies applied.
In the La Arena II PEA and in this press release, total cash
costs are presented on a co-product basis to remove the impact of
by-product credits. Costs directly attributable to each metal
(i.e. refining costs and heap leaching) are assigned to the
metal. As per the La Arena II PEA, all other costs have been
allocated based on the percentage of total revenue and are
calculated based on the following assumptions for post commercial
production costs and revenues as follows:
$
millions
|
Gold
|
Copper
|
Total
|
Revenue
|
$ 3,869
|
$ 13,854
|
$ 17,723
|
% of
Revenue
|
22%
|
78%
|
100%
|
Mining &
Stockpile
|
$ 554
|
$ 1,983
|
$ 2,537
|
Concentrator
|
$ 734
|
$ 2,628
|
$ 3,362
|
General
Administration
|
$ 128
|
$ 458
|
$ 586
|
Transportation
|
$ 140
|
$ 500
|
$ 639
|
Treatment
Charges
|
$ 159
|
$ 570
|
$ 729
|
Gold Heap
Leach
|
$ 54
|
$ -
|
$ 54
|
Gold
Refining
|
$ 18
|
$ -
|
$ 18
|
Copper
Refining
|
$ -
|
$ 378
|
$
378
|
Total Cash
Cost
|
$ 1,786
|
$ 6,516
|
$ 8,302
|
Gold production
(oz)
|
2,976,173
|
-
|
2,976,173
|
Copper Production
(lb)
|
-
|
4,198,205,654
|
4,198,205,654
|
Co-product Total Cash
Cost per Ounce / Pound
|
$ 600
|
$
1.55
|
|
(1)
Numbers may not calculate due to rounding.
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This press release contains "forward-looking statements" within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, Section 21E of the US Exchange Act, the United
States Private Securities Litigation Reform Act of 1995, or in
releases made by the United States Securities and Exchange
Commission, all as may be amended from time to time, and
"forward-looking information" under the provisions of applicable
Canadian securities legislation, concerning the business,
operations and financial performance and condition of the Company.
All statements, other than statements of historical fact, are
forward-looking statements. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "plans", "expects", "is expected", "guidance",
"scheduled", "estimates", "forecasts", "intends", "anticipates",
"believes", or variations or comparable language of such words and
phrases or statements that certain actions, events or results
"may", "could", "would", "should", "might" or "will be taken",
"occur" or "be achieved" or the negative connotation thereof.
Forward-looking statements include, but are not limited to,
statements related to the following: the price of gold, silver,
copper, lead and zinc, the estimation of Mineral Reserves and
Mineral Resources, the realization of Mineral Reserve estimates,
the timing and amount of estimated future production, costs of
production, capital expenditures and requirements for additional
capital; the continued evaluation of the La Arena II project and
the economic analysis provided in the PEA, including the timeline
and estimated capital required and the assessment of financial and
strategic options; the expectation of meeting production targets;
cash flows; costs of production; and net present values associated
with the project.
Forward-looking statements are based on the reasonable
assumptions, estimates, analyses and opinions of management made in
light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that
management believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect. Management believes that the assumptions
and expectations reflected in such forward-looking statements are
reasonable. Assumptions have been made regarding, among other
things: the Company's performance and ability to operate and
implement operational improvements at the Escobal, La Arena,
Shahuindo and Timmins Mines; studies
and development efforts on the La Arena II project; the Company's
ability to carry on exploration and development activities,
including land acquisition and construction; the availability and
sufficiency of power and water for operations; the timely receipt
of permits and other approvals; the successful outcomes of
consultations with indigenous populations; the price of silver,
gold and other metals; prices for key mining supplies, including
labor costs and consumables, remaining consistent with the
Company's current expectations; production meeting expectations and
being consistent with estimates; plant, equipment and processes
operating as anticipated; there being no material variations in the
current tax and regulatory environment; the Company's ability to
operate in a safe, efficient and effective manner; the exchange
rates among the Canadian dollar, Guatemalan quetzal, Peruvian sol
and the USD remaining consistent with current levels; the ability
to resolve the protests and road blockages of the Escobal Mine; the
timing and amount of foregone taxes and royalties; the timing and
likelihood of further workforce reductions; the timing and ability
of the Company to resume operations in the event the suspension of
the mining license to Minera San
Rafael for the Escobal Mine is lifted and all licenses,
permits and credentials affecting the operation of the Company's
mines, including the Escobal Mine, are renewed or re-issued and all
roadblocks are resolved, and relationships with the Company's
partners, including employees, vendors and community populations
are maintained or effectively managed; the Company's ability to
obtain financing as and when required and on reasonable terms; and
the Company's ability to continue to comply with the terms of the
credit agreements with its lenders. Readers are cautioned that the
foregoing list is not exhaustive of all factors and assumptions
which may have been used.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results to be materially different from those expressed or implied
by such forward-looking statements. Such risks, uncertainties and
other factors include but are not limited to: the fluctuation of
the price of silver and gold; opposition to development and mining
operations by one or more groups of indigenous people; actions that
impede or prevent the operations of the Company's mines; the
inability to develop and operate the Company's mines; social unrest
and political or economic instability and uncertainties in the
jurisdictions in which the Company operates; the timing and ability
to maintain and, where necessary, obtain necessary permits and
licenses; changes in national and local government legislation,
taxation and controls or regulations; environmental and other
governmental regulation compliance; un-appealable judicial
decisions; the uncertainty in the estimation of Mineral Resources
and Mineral Reserves; fluctuations in currency exchange rates;
infrastructure risks, including access to roads, water and power;
and the timing and possible outcome of pending or threatened
litigation and the risk of unexpected litigation. For a more
detailed discussion of risks relevant to the Company, see the
Company's Management Discussion & Analysis and Annual
Information Form and Form 40-F, available on SEDAR at
www.sedar.com, on EDGAR at www.sec.gov or on the Company's website
at www.tahoeresources.com.
Although management has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such forward-looking
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Forward-looking statements are made as
of the date hereof and, accordingly, are subject to change after
such date. Except as otherwise indicated by the Company, these
statements do not reflect the potential impact of any non-recurring
or other special items or of any disposition, monetization, merger,
acquisition, other business combination or other transaction that
may be announced or that may occur after the date hereof.
Forward-looking statements are provided for the purpose of
providing information about management's current expectations and
plans and allowing investors and others to get a better
understanding of the Company's operating environment. The Company
does not intend or undertake to publicly update any forward-looking
statements that are included in this document, whether as a result
of new information, future events or otherwise, except as, and to
the extent required by, applicable securities laws.
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SOURCE Tahoe Resources Inc.