Gold Standard Ventures Corp. (TSX: GSV; NYSE AMERICAN: GSV)
(“Gold Standard” or the “Company”) today announced positive results
from the Updated South Railroad Pre-Feasibility Study (“PFS”) on
its 100%-owned/controlled Railroad-Pinion project in Nevada’s
Carlin Trend, which show significant improvements compared to the
first generation PFS released on September 10, 2019 (news release).
The South Railroad portion of the Railroad-Pinion project
consisting of the Dark Star deposit and Pinion deposit, hosts one
of the largest, undeveloped oxide gold reserves on the Carlin
Trend.
The first South Railroad PFS recommended a series of trade-off and
optimization studies which have been completed and incorporated
into the Updated PFS. Resource and reserve estimates remain
materially unchanged since the September 10, 2019 news release and
were not part of the PFS trade-off studies. The trade-off studies
enhanced project economics and reduced project risks by lowering
initial capital costs from $194M to $132.9M, increasing the
after-tax IRR from 27.8% to 40%, and increasing the after-tax NPV
from $241.5M to $265.0M.
All references to the term “ore” contained in
this press release refer to mineral reserves not mineral
resources.
Key Highlights of the Updated Base Case
South Railroad PFS include (all currencies are shown in US
dollars):
- Pre-tax net present value (“NPV”) of $331.4M at a 5% discount
rate and an after tax NPV of $265.0M at a $1,400 gold price and a
$17.11 silver price, with a mineral reserve pit designs based on a
gold price of $1,250 per ounce and a silver price of $15.30 per
ounce.
- After-tax IRR of 40.0%.
- Average annual gold placement of 156,000 ounces of gold per
year over an initial 8-year mine life.
- Average life of mine cash cost of $582 per ounce after
by-product credit, and all in sustaining costs (“AISC”)1 of $707
per ounce.
- Proven and probable mineral reserves of 1.246 million ounces of
gold and 2.705 million ounces of silver.
- Life of mine strip ratio of 3.1:1.
- Initial capital expenditures of $132.9M.
- Project economics include 15% contingency
Trade-Off Study Results Incorporated in
Updated PFS
- Revised base case incorporates a lease-to-own strategy for
major mining equipment and power generation units. The
published technical report will also include evaluation of
purchased equipment as an alternative.
- Optimized mine / process plan for improved ounce flow, enhanced
NPV and lower pre-stripping costs. The optimized mine design
reduced pre-stripping to accelerate run of mine leach production
from Dark Star.
- The heap leach pad closure plan was changed to incorporate a
clay cover rather than the higher-cost, high-density polyethylene
cover option. This change is in line with Nevada permitting
requirements.
- Included salvage value at the end of mine life for major mining
equipment and power generation units.
- Toll milling costs for sulfide ore were captured.
- Increased capital and operating costs for liquified natural gas
(“LNG”) on-site power generation compared to original line
power.
- Slight decrease in gold ounces produced (936,000 ounces to
922,000 ounces) as a result of mine plan optimization which defers
HPGR processing. Silver ounces produced remains the
same.
Jonathan Awde, CEO and Director of Gold Standard
commented: “We are very pleased to see the substantial improvement
in project economics in this second PFS. Project design is an
iterative process and we expect to see further improvements as we
proceed with our development plans. The 2020 drilling program
will focus on extending mine life through the potential conversion
of Inferred ounces at Pinion, and other satellite deposits, to the
Measured and Indicated categories, and step out exploration testing
new geologic interpretations at Dark Star.”
Updated PFS Highlights
PFS Metric |
2019 Prefeasibility Study |
2020 Updated Prefeasibility Study |
Delta |
Initial Capital Expenditures |
$194.0M |
$132.9M |
-$61.1M |
Life of Mine Capital Expenditures |
$302.7M |
$285.6M |
-$17.1M |
Life of Mine Pre-Tax Cash Flow |
$409.7M |
$439.7M |
+$30.0M |
Life of Mine Pre-Tax Net Present Value (5%) |
$302.1M |
$331.4M |
+$29.3M |
Life of Mine Pre-Tax IRR (internal rate of return) |
32.4% |
46.1% |
|
13.7% |
Life of Mine Net Cash Flow After Tax |
$337.1M |
$357.6M |
+$20.5M |
Life of Mine After Tax Net Present Value (5%) |
$241.5M |
$265.0M |
+$23.5M |
Life of Mine After Tax IRR |
27.8% |
40.0% |
|
+12.2% |
Cash Costs after By-Product Credit* |
$582/oz |
$582/oz |
|
$0 |
AISC* |
$657/oz |
$707/oz |
+$50/oz |
Payback |
2.7 years |
3.3 years |
+0.6 years |
Notes:
- * See “Non-GAAP Financial Measures” at the end of this
press release for a discussion of these measures.
- The Updated PFS was conducted using assumed metal prices of
$1,400/oz gold and $17.11/oz silver. The mineral reserve
estimate that provides the basis for the Updated PFS was conducted
at assumed metal prices of $1,250/oz gold and $15.30/oz
silver.
Sensitivity to Gold PriceThe
Updated PFS base case was run on $1,400/oz Au and $17.11/oz Ag and
evaluated on $100 increments above and below the base case to
identify potential upside/downside effects on the South Railroad
Project (refer to financial sensitivity table below) based on metal
price. For every $100 increase or decrease in the price of
gold and corresponding silver price (using 81.8 ratio), the after
tax NPV changes by approximately +20 percent.
|
Base +$200 |
Base +$100 |
Base ($1400 Au) |
Base -$100 |
Base -$200 |
Gold Price |
$1600 |
|
$1500 |
|
$1400 |
|
$1300 |
|
$1200 |
|
Silver Price |
$19.56 |
|
$18.33 |
|
$17.11 |
|
$15.89 |
|
$14.67 |
|
Pre-Tax Cash Flow |
$623.0M |
$531.3M |
$439.7M |
$348.1M |
$256.5M |
Pre-Tax Net Present Value (5%) |
$481.2M |
$406.3M |
$331.4M |
$256.5M |
$181.6M |
Pre-Tax IRR (%) |
|
61.3% |
|
53.8% |
|
46.1% |
|
38.1% |
|
29.6% |
After Tax Cash Flow |
$506.3M |
$432.1M |
$357.6M |
$282.9M |
$207.6M |
After Tax Net Present Value (5%) |
$386.5M |
$325.9M |
$265.0M |
$204.0M |
$142.4M |
After Tax IRR (%) |
53.3% |
|
46.8% |
40.0% |
|
33.0% |
|
25.4% |
Mark Laffoon, Gold Standard’s Project Director
commented, “Completion of the Updated PFS is another significant
achievement for both the South Railroad Project and GSV. The
South Railroad project continues to progress along the development
and de-risking path by a dedicated and talented team of
geoscientists, subject matter technical experts, and permitting
specialists. I am proud to be part of this team and
associated with this project adding value in Elko County,
Nevada.”
Next Steps and
OpportunitiesCompletion of the positive Updated PFS allows
for the finalization of permit applications to the Bureau of Land
Management (lead permitting agency on the South Railroad Project)
for an environmental impact statement (EIS). Continued drilling is
planned for the potential conversion of inferred resources to
measured and indicated for extension of the mine plan at Dark Star,
Pinion and the Jasperoid Wash deposit.
Additional South Railroad Project opportunities
/ considerations include:
- Potential expansion of profitable mine life given current
resources and exploration upside at the South Railroad
Project.
Additional studies required to further de-risk the South
Railroad Project include:
- Additional geotechnical studies need to be completed to further
define the scope and cost of major civil works and
foundations.
- Additional hydrological studies are required to provide a
design of water disposal systems currently assumed to be rapid
infiltration basins, and to determine optimized locations and
treatment requirements and options.
- Additional hydrologic studies are required to analyze pit lake
and closure alternatives.
- Additional detailed engineering design studies are required to
finalize facilities in preparation of long-lead item acquisitions
and potential production.
Technical ReportThe Revised PFS
Technical Report will be prepared by M3 Engineering &
Technology Corporation (“M3”) and filed on SEDAR within 45 days
following the date of this news release. Dr. Art Ibrado, PE,
Project Manager, and Matthew Sletten, PE, with M3 are the qualified
persons responsible for the scientific and technical information in
this news release as defined by NI43-101. Thomas L. Dyer, PE,
a Principal Engineer with MDA (a division of RESPEC), is the
qualified person for the reserve estimate and mine planning in this
news release, as defined by NI 43-101. Dr. Ibrado, Mr.
Sletten, Mr. Dyer are independent of Gold Standard.
Don Harris, Registered Member SME (#04146776)
and General Manager for Gold Standard; Steven Koehler, AIPG
(CPG-10216) and Manager of Projects for Gold Standard; and Mark
Laffoon, PE (NV #08708) and Project Director are the qualified
persons, as defined by NI 43-101, Standards of Disclosure for
Mineral Projects, who supervised the preparation of certain
technical information in this release.
The Updated PFS Technical Report will include
contributions from the following independent mining industry
consultants including:
M3 |
PFS lead; general site arrangement and infrastructure design;
financial modeling; overall report preparation |
MDA (a division of RESPEC) |
Mine plan schedule, mining operating and capital costs |
Stantec Consulting Services Inc., In-Situ Inc. |
Material characterization; hydrology and groundwater model |
Kappes, Cassiday & Associates; GL Simmons LLC |
Column, bottle roll and HPGR test work; metallurgical
interpretation, process operation and capital costs |
The Mines Group Incorporated |
Leach pad and pond design and layout |
EM Strategies |
Lead for permitting activities |
Golder Associates Inc. |
Pit slope stability investigations and design |
Barr Engineering |
Blast fragmentation studies |
Forte Dynamics Inc. |
Mine / process planning optimization |
Non-GAAP Financial MeasuresThe
Company has included certain non-GAAP financial measures in this
press release, including cash costs and all-in sustaining costs
(AISC) per ounce of gold sold. These non-GAAP financial measures do
not have any standardised meaning. Accordingly, these financial
measures are intended to provide additional information and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with International Financial
Reporting Standards (“IFRS”).
Cash CostsCash costs are
reflective of the cost of production. The Company reports cash
costs on an ounces of gold sold basis. Other companies may
calculate these measures differently and should not be considered
in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. Cash costs reported by Gold
Standard includes mining, processing, transport, refining, general
administration costs of the mine operations and royalties, but are
exclusive of amortization, reclamation, capital and exploration
costs and net of any value of the by-products.
All-in Sustaining CostsThis
news release refers to expected AISC per ounce which is a non-GAAP
measure however is a measure the Company believes more
fully-defines the total costs associated with producing gold. This
measurement has no standardized meaning under IFRS, accordingly
there may be some variation in method of computation of “all-in
sustaining costs” as determined by the Company compared with other
mining companies. AISC reported by Gold Standard includes mine cash
costs, land access payments, royalties, and sustaining capital
expenditures, but excludes non-sustaining capitalized stripping and
end of life reclamation costs.
Data VerificationThe “qualified
persons”, as such term is defined in NI 43-101, responsible for the
preparation of the Updated PFS have verified the data disclosed in
this news release, including sampling, analytical, and test data
underlying the information contained in this news release.
Geological, mine engineering and metallurgical reviews included,
among other things, reviewing mapping, core logs, and re-logging
existing drill holes, review of geotechnical and hydrological
studies, environmental and community factors, the development of
the life of mine plan, capital and operating costs, transportation,
taxation and royalties, and review of existing metallurgical test
work. In the opinion of the qualified persons responsible for the
preparation of the Updated PFS, the data, assumptions, and
parameters used to estimate mineral resources and mineral reserves,
the metallurgical model, the economic analysis, and the preliminary
feasibility study are sufficiently reliable for those purposes. The
Updated PFS, when filed, will contain more detailed information
concerning individual responsibilities, associated quality
assurance and quality control, and other data verification matters,
and the key assumptions, parameters and methods used by the
Company.
ABOUT GOLD STANDARD VENTURES –
Gold Standard is an advanced-stage gold exploration company focused
on district scale discoveries on its Railroad-Pinion Project,
located within the prolific Carlin Trend. Gold Standard’s
successful exploration of Pinion and Dark Star has created
potential near-term development option and further consolidates the
Company’s premier land package on the Carlin Trend.
Pinion has a resource estimate prepared in
accordance with NI 43-101 consisting of an Measured and Indicated
Mineral Resource of 28.93 million tonnes grading 0.58 g/t Au and
4.22 g/t Ag, totaling 544,000 ounces of gold and 3,929,000 ounces
of silver, and an Inferred Resource of 10.81 million tonnes grading
0.64 g/t Au and 3.80 g/t Ag, totaling 224,000 ounces of gold and
1,322,000 ounces of silver, using a cut-off grade of 0.14 g/t Au
and constrained by a $1,500/Au ounce LG Cone.
The Dark Star deposit has a resource estimate
prepared in accordance with NI 43-101 consisting of a Measured and
Indicated Mineral Resource of 32.72 million tonnes grading 0.88 g/t
Au, totaling 921,000 ounces of gold and an Inferred Resource of
2.48 million tonnes grading 0.70 g/t Au, totaling 56,000 ounces of
gold, using a cut-off grade of 0.14 g Au/t and constrained by a
$1,500/Au ounce LG Cone.
North Bullion has a resource estimate prepared
in accordance with NI 43-101 consisting of an Indicated Mineral
Resource of 2.92 million tonnes grading 0.96 g/t Au, totaling
90,100 ounces of gold and an Inferred Resource of 10.97 million
tonnes grading 2.28 g/t Au, totaling 805,800 ounces of gold, using
a cut-off grade of 0.14 g Au/t for near surface oxide and 1.25 to
2.25 g Au/t for near surface sulfide and underground sulfide
respectively.
Jasperoid Wash has a resource estimate prepared
in accordance with NI 43-101 consisting of an Inferred Resource of
10.57 million tonnes grading 0.33 g/t Au, totaling 111,000 ounces
of gold, using a cut-off grade of 0.14 g Au/t and constrained by a
$1,500/Au ounces LG Cone.
Neither the Toronto Stock Exchange nor its
regulation services provider nor the NYSE AMERICAN Exchange accepts
responsibility for the adequacy or accuracy of this news
release.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking
statements, which relate to future events or future performance and
reflect management’s current expectations and assumptions. Such
forward-looking statements reflect management’s current beliefs and
are based on assumptions made by and information currently
available to the Company. All statements, other than statements of
historical fact, included herein including, without limitation,
statements about our potential near-term development option, the
results from the PFS, the lease to own strategy for major mining
equipment and power generation units, the preparation and filing of
a technical report for the PFS and the content to be contain
therein, the plans for the Company’s 2020 drilling program, the
potential conversion of inferred mineral resources to measured and
indicated mineral resources, the step out exploration testing of
new geologic interpretations at Dark Star, the finalization of
permit applications to the Bureau of Land Management, and
additional studies to de-risk the South Railroad Project are
forward looking statements. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Risk factors
affecting the Company include, among others: the results from our
exploration programs, global financial conditions and volatility of
capital markets, uncertainty regarding the availability of
additional capital, fluctuations in commodity prices; title
matters; and the additional risks identified in our filings with
Canadian securities regulators on SEDAR in Canada (available at
www.sedar.com) and with the SEC on EDGAR (available at
www.sec.gov/edgar.shtml). These forward-looking statements are made
as of the date hereof and, except as required under applicable
securities legislation, the Company does not assume any obligation
to update or revise them to reflect new events or
circumstances.
CAUTIONARY NOTE FOR U.S. INVESTORS
REGARDING RESERVE AND RESOURCE ESTIMATES
All resource estimates reported by the Company
were calculated in accordance with the Canadian National Instrument
43-101 and the Canadian Institute of Mining and Metallurgy
Classification system. These standards differ significantly from
the requirements of the U.S. Securities and Exchange Commission for
descriptions of mineral properties in SEC Industry Guide 7 under
Regulation S-K of the U. S. Securities Act of 1933. In particular,
under U. S. standards, mineral resources may not be classified as a
“reserve” unless the determination has been made that
mineralization could be economically and legally produced or
extracted at the time the reserve determination is
made. Accordingly, information in this press release
containing descriptions of the Company’s mineral properties may not
be comparable to similar information made public by US public
reporting companies.
On behalf of the Board of Directors of Gold
Standard,
“Jonathan Awde”
Jonathan Awde, President and Director
FOR FURTHER INFORMATION PLEASE CONTACT: Jonathan
Awde President Tel: 604-669-5702
Email: info@goldstandardv.com Website: www.goldstandardv.com
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