Unigold Inc. (“Unigold” or the “Company”) (TSX-V:UGD; OTCQX: UGDIF;
FSE:UGB1) is pleased to provide results of an independent
Feasibility Study (“the Study”) prepared in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects ("NI 43-101") on the Company’s 100% owned Candelones Oxide
Project in the Dominican Republic.
Gordon Babcock, Chief Operating Officer notes:
“The Feasibility Study has enhanced the economics as compared to
the Company’s April 2021 Preliminary Economic Assessment (PEA).
While inflation did have an impact, we were able to realize savings
by identifying local suppliers and contractors for many of the cost
centers. The Capital and Operating costs increased 4% relative to
the PEA estimates. Metallurgical recoveries increased by 10%
reflecting changes in ore handling and stacking. Recovered ounces
increased by 7,400 ounces relative to the PEA due to improved
metallurgical recovery assumptions. The net result describes a
low-cost, low impact open pit heap leach mining operation capable
of producing 31,000 ounces of gold annually. Our
consulting team has done an outstanding job in streamlining the
design to minimize capital and operating cost increases. Our
exploration drilling of the oxide resource successfully converted
93% of the 2021 inferred resource to the measured and indicated
classification, facilitating conversion to proven and probable
reserves.
Joseph Hamilton, Chairman and CEO of Unigold
notes: “The delivery of this feasibility study is a key deliverable
for the Company for 2022. The Feasibility Study met our
expectations, and our team was able to deliver a low-cost starter
pit with a minimal environmental footprint. The economics are
compelling for a starter operation. While this study looks at Oxide
production only, the integration of the larger sulphide resource
into the project planning is expected to enhance the mine life and
production profile. We are awaiting the approval of the
Exploitation Concession application which will be required for us
to get to a production decision for the Candelones Project.”
This Study was prepared for Unigold by Micon
International Limited and other industry consultants. The following
“qualified persons” contributed to the Study, each of whom has
reviewed and approved the content of this news release. The
following persons are independent for the purposes of NI
43-101:
• Chris Jacobs,
C.Eng., MIMMM, President & Mining Economist, Micon
International
Limited• Abdoul Aziz
Dramé, P.Eng., Mining Engineer, Micon International
Limited• Bill Lewis,
P.Geo., Senior Geologist, Micon International
Limited• Alan J. San
Martin, MAusIMM (CP), Mineral Resource Specialist, Micon
International
Limited• Stuart
Saich, Principal Metallurgist, Company Director, Promet 101
Consulting Pty
Ltd.• Mathew Fuller,
Principal, C.P.G., P.Geo., QP, Principal, Tierra Group
International Ltd.
The pertinent input parameters and results of
the Candelones Oxide Study (Base Case) are presented in Table 1 to
Table 4. Table 5 presents the NPV and IRR sensitivity to
variability in gold price, capital cost, and operating cost.
Mineral Reserve and Resource Estimates
The oxide mineral reserves and resources for the
Candelones project are summarized in Tables 6 and 7. The Study is
based on the oxide mineral resources, estimated by Mr. W. Lewis,
P.Geo. and Mr. A. San Martin, MAusIMM (CP) and the oxide mineral
reserves, estimated by Mr. Abdoul Aziz Dramé, P.Eng. all of whom
are employees of Micon. Micon is independent of Unigold and Messrs.
Lewis, San Martin and Dramé each meet the requirements of a
“Qualified Person” as established by NI 43-101 and the Canadian
Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition
Standards for Mineral Resources and Mineral Reserves (May 2014).
The effective date of the mineral reserve estimate is October 7,
2022. The effective date of the mineral resource estimate is August
8, 2022. A Technical Report summarizing the estimation methodology
and procedures will be published on SEDAR and the Company’s website
within 45 days.
Table 1: FS Summary (reported in
US$)
Total mineralized material mined (000 t) |
5,597 |
|
Total waste (000 t) |
2,232 |
|
Average grade (Au g/t) |
0.67 |
|
Total gold contained (oz) |
121,350 |
|
Total gold produced (oz) |
102,970 |
|
Average Gold recovery (%) |
85% |
|
Average annual gold produced (oz) |
31,426 |
|
Total initial Capex (US$M) |
$35.9 |
|
Sustaining Capital (US$M) |
$0.9 |
|
Unit Operating Cost (per tonne ore treated) |
Mining (US$/t) |
$4.13 |
|
Processing (US$/t) |
$5.55 |
|
General & administration (US$/t) |
$1.31 |
|
Refining, delivery, royalty (US$/t) |
$3.18 |
|
Total operating cost per tonne treated
(US$/t) |
$14.17 |
|
Table 2: Capital Cost Summary (US$
million)
Capital Costs (US$M) |
Pre-Production |
Sustaining |
Total |
Mining |
$1.71 |
$0.94 |
$2.65 |
ADR Processing Plant |
$9.97 |
|
$9.97 |
Infrastructure |
$16.40 |
|
$16.40 |
EPCM, Indirects, Owners Costs |
$3.72 |
|
$3.72 |
Subtotal |
$31.80 |
$0.94 |
$32.74 |
Contingency |
$4.10 |
|
$4.10 |
Total Capital Costs |
$35.90 |
$0.94 |
$36.84 |
Closure and Rehabilitation |
$0.47 |
$4.66 |
$5.13 |
Note: Totals may differ due to rounding.
Table 3: Summary Economics at US$1,650
gold per oz (US$ million) (US$M)
LOM: Gross Revenue * (US$M) |
$169.9 |
|
Minimum Tax/Royalty/Community Burdens* |
$17.0 |
|
EBITDA Net Cash Operating Margin* |
$90.6 |
|
Direct Taxes * |
$8.8 |
|
Net Cash Flow from Operations After-Tax* |
$81.8 |
|
Total Capital Cost including sustaining and closure costs* |
$42.0 |
|
Net Project Cashflow after Capital recapture* |
$39.8 |
|
Pre-Tax 5% NPV cash flow
(US$M) |
$38.2 |
|
Pre-Tax IRR |
52.4% |
|
After-Tax 5% NPV cash flow
(US$M) |
$30.6 |
|
After-Tax IRR |
43.6% |
|
* Undiscounted
Table 4: All-In Sustaining Cost (US$
million)
Mining Cost (US$M) |
$23.1 |
Processing Cost (US$M) |
$31.1 |
General & Administrative (US$M) |
$7.3 |
Refining & Smelting (US$M) |
$0.8 |
Royalties (US$M) |
17.0 |
Adjusted Operating Costs |
$79.3 |
Sustaining (US$M) |
$0.9 |
Closure cost (US$M) |
$5.1 |
Total (US$M) |
$85.3 |
All-in Sustaining Cost (US$/oz) |
$829 |
All-in Sustaining Costs are presented as defined by the World Gold
Council Less Corporate G&A |
Table 5: NPV & IRR Sensitivities
(Base Case1 in bold): 5% Discount
Rate
|
|
|
80% |
|
|
85% |
|
|
90% |
|
|
95% |
|
|
100% |
|
|
105% |
|
|
110% |
|
|
115% |
|
|
120% |
|
Gold Price |
NPV (US$M) |
$10.3 |
|
$15.4 |
|
$20.5 |
|
$25.6 |
|
$30.6 |
|
$35.7 |
|
$40.7 |
|
$45.7 |
|
$50.7 |
|
IRR |
|
19.1% |
|
|
25.6% |
|
|
31.7% |
|
|
37.7% |
|
|
43.6% |
|
|
49.2% |
|
|
54.8% |
|
|
60.2% |
|
|
65.5% |
|
Operating Cost |
NPV (US$M) |
$38.5 |
|
$36.5 |
|
$34.6 |
|
$32.6 |
|
$30.6 |
|
$28.7 |
|
$26.7 |
|
$24.7 |
|
$22.8 |
|
IRR |
|
52.5% |
|
|
50.3% |
|
|
48.1% |
|
|
45.8% |
|
|
43.6% |
|
|
41.3% |
|
|
39.0% |
|
|
36.7% |
|
|
34.3% |
|
Capital Cost |
NPV (US$M) |
$36.1 |
|
$34.7 |
|
$33.4 |
|
$32.0 |
|
$30.6 |
|
$29.3 |
|
$27.9 |
|
$26.6 |
|
$25.2 |
|
IRR |
|
59.5% |
|
|
54.9% |
|
|
50.8% |
|
|
47% |
|
|
43.6% |
|
|
40.4% |
|
|
37.5% |
|
|
34.8% |
|
|
32.3% |
|
1 – Base Case: US$1,650 gold per oz; CAPEX US$35.90 Million;
Operating Cost US$14.17/ tonne processed
Table 6.0 – Mineral Reserve Estimate –
Candelones Oxide Project
Mineralization Type |
Category |
Tonnes(x1,000) |
Au g/t |
Au oz |
Waste/OreRatio |
Oxide |
Proven |
2,564 |
0.79 |
65,000 |
|
Total Proven |
2,564 |
0.79 |
65,000 |
Oxide |
Probable |
2,384 |
0.57 |
43,000 |
Transition |
649 |
0.62 |
13,000 |
Total Probable |
3,033 |
0.58 |
56,000 |
Total Proven + Probable |
5,597 |
0.67 |
121,000 |
0.40 |
Table 7.0 – Mineral Resource Estimate –
Candelones Oxide Project
Mineralization Type |
Category |
Tonnes(x1,000) |
Au g/t |
Au oz |
Waste/OreRatio |
Oxide |
Measured |
2,542 |
0.83 |
67,000 |
NA |
Oxide |
Indicated |
2,483 |
0.60 |
48,000 |
Transition |
710 |
0.66 |
15,000 |
Measured + Indicated |
5,735 |
0.71 |
130,000 |
Oxide |
Inferred |
1,094 |
0.43 |
15,000 |
Transition |
160 |
0.59 |
3,000 |
Inferred |
1,255 |
0.45 |
18,000 |
Oxide Mineral reserves, with an Effective Date
of October 7, 2022, were estimated by Mr. Abdoul Aziz Dramé, P.
Eng, of Micon International Limited (“Micon”) a Toronto based
consulting company independent of Unigold. Mr. Dramé meets the meet
the requirements of a “Qualified Person” as defined by NI 43-101.
The reserve estimate is based on a long-term gold price of US$ 1650
per ounce and economic cut-off grades of 0.21 g/tonne (OXIDE) and
0.33 g/tonne (TRANSITION). Mineral reserves are reported within a
final designed pit developed from an optimized pit shell. Mineral
reserves assume 2.5% dilution, metallurgical recoveries of 88%
(OXIDE) and 59% (TRANSITION); mining costs of USS$ 1.84 to 2.39 per
tonne (WASTE), US$2.25 per tonne (OXIDE) and US$ 2.75 per tonne
(TRANSITION); processing costs of US$5.56 per tonne; G&A costs
of US$1.31 per tonne and selling and royalty costs of US$ 3.18 per
tonne
Oxide Mineral resources, with an Effective Date
of August 8, 2022, are inclusive of mineral reserves and were
estimated by Mr. W. Lewis, P.Geo. and Mr. A. San Martin,
MAusIMM(CP) of Micon International Limited. (“Micon”), a Toronto
based consulting company, independent of Unigold. Both Mr. Lewis
and Mr. San Martin meet the requirements of a “Qualified Person” as
defined by NI 43-101. The estimate is based on a long-term gold
price of US$1,800 per ounce; metallurgical recoveries of 88%
(OXIDE) and 59% (TRANSITION); mining costs of US$2.25 per tonne
(OXIDE) and US$ 2.75 per tonne (TRANSITION); processing costs of
US$5.97 per tonne; G&A costs of US$1.93 per tonne. Pit
constrained resources are reported within an optimized pit
shell.
Micon has not identified any legal, political,
environmental, or other risks that could materially affect the
potential development of the mineral resource
estimate.
The mineral reserve and resource estimates are
classified according to the CIM Standards which define a Mineral
Resource as “a concentration or occurrence of solid material of
economic interest in or on the earth's crust in such form, grade or
quality and quantity that there are reasonable prospects for
eventual economic extraction. The location, quantity, grade or
quality, continuity and other characteristics of a mineral resource
are known, estimated, or interpreted from specific geological
evidence and knowledge including sampling. Mineral resources are
sub-divided, in order of increasing geological confidence, into
inferred, indicated, and measured categories. An inferred mineral
resource has a lower level of confidence than an indicated mineral
resource. An indicated mineral resource has a higher level of
confidence than an inferred mineral resource but has a lower level
of confidence than a measured mineral resource."
The CIM Standards define an inferred mineral
resource as: "that part of a mineral resource for which quantity
and grade or quality are estimated on the basis of limited
geological evidence and sampling. Geological evidence is sufficient
to imply but not verify geological and grade or quality continuity.
An inferred mineral resource has a lower level of confidence than
that applying to an indicated mineral resource. It is reasonably
expected that the majority of inferred mineral resources could be
upgraded to indicated mineral resources with continued
exploration." The reader is reminded that mineral resources are not
mineral reserves and therefore do not have demonstrated economic
viability.
Mining
The oxide mineral reserves included in the
life-of-mine plan outcrop on surface and are contained within a pit
with a maximum depth of approximately thirty metres. The mine has a
nominal production rate of 5,000 tonnes per day. Contract mining is
assumed using a local, established construction contractor in the
Dominican Republic. The material is free-dig at surface.
The top 5.0 meters is expected to be sorted and
the fine fraction agglomerated prior to placement on the leach pad
to counter the high clay content observed near surface. The
classification-agglomeration of the upper portion of the deposit
was added to mitigate any potential percolation issues at the base
of the heap leach pad as well as to maximize gold recovery.
Most of the oxide resource assumes a small
percentage of ripping along with mechanical loading by excavator no
drilling and blasting is necessary. As the pit deepens an
aggressive ripping program with D8 triple shank and excavator
ripper will be used to prepare the bench for loading by excavator
this will occur at or near the transition ore/waste zone at the
bottom of the planned pit development.
Processing
A total of 150,000 tonnes per month of material
will be extracted and hauled approximately 3 km onto a Run-of-Mine
heap leach pad that will follow local contours with a minimum of
earthworks. Gold and silver will be recovered in an
adsorption-desorption-recovery circuit and electrowinning cells,
with gold room recovery and production of Dore bullion bars. Silver
credits are not included in the financial modelling. No tailings
facility is required. Gold recovery estimates for oxide and
transition mineralization are based on a column leach test work
completed at Bureau Veritas Commodities Canada Ltd. Metallurgical
test laboratories, Vancouver, where preliminary results indicate
88% gold extraction in 30 days for -19 mm oxide mineralization and
over 59% gold extraction in 43 days for -12.5 mm transition
mineralization. This study uses a weighted average of 85% leach
recovery with a 70-day leach cycle.
Surface Infrastructure and Indirect
Costs
The mining and processing infrastructure will be
located at the Candelones site. Site power is assumed to be
supplied by generators under contract. The mine site is directly
accessible by an International paved highway. No off-site
infrastructure is expected to be required. Process Water is
available in the immediate area. Surface water management includes
ditches, ponds, and pumping stations.
Indirect costs including owner’s costs,
engineering, procurement and construction management, temporary
facilities for construction and other related items are estimated
at US$3.7 million. An additional US$4.1 million (pre-production)
has been budgeted as contingency for specific direct and indirect
costs.
Royalties
A 5% royalty on all metals produced from the
Candelones Project is payable to the Government of the Dominican
Republic and forms a minimum tax. The royalty payments are credited
against the 27% tax on Net Income. A community contribution of 5%
of after-tax income is also provided for within the 10% total
royalty applied in this Study. The royalty calculation is believed
to be a conservative estimate of the ultimate burdens.
Environment and Closure
The Candelones Project is located almost
entirely on land owned by the Dominican Government. The project
requires the submittal of an Environmental and Social Impact
Assessment (“ESIA”). The Company will engage the Government through
the Ministerio de Medio Ambiente y Recursos Naturales to develop
the framework for the ESIA over the coming months. Environmental
baseline data collection has been initiated and all collected
baseline data will inform the ESIA, which will commence once the
framework is finalized. Community consultations have started and
will continue for the remainder of the year as stated by Unigold
CSR onsite team. In addition to ESIA approval, the
project will require permits and authorizations prior to
construction and operation of the mine. Requests for these
approvals will be submitted following the ESIA approval.
A closure plan for the Candelones project will
be developed in consultation with the Government and the local
communities as part of the ESIA. Closure costs are estimated at
US$5.1 million. The objective of site closure is to return the site
to a fully satisfactory state that includes eliminating all
unacceptable health hazards and ensuring public safety, eliminating
the production and spread of contaminants that could damage the
environment and in returning the site to an environmentally sound
condition without the need for maintenance or continuous
monitoring.
Stakeholder Engagement
The Candelones Project is located south of the
town of Restauraćion in the northwestern Dajabon Province of the
Dominican Republic, within a border area that has been designated
for preferential development by the government of the Dominican
Republic. Unigold has been proactive in community engagement for
the past twenty years. Project consultations were initiated in 2020
and will continue thru to project initiation at a future date
pending permit approval. Numerous stakeholders have expressed an
interest in learning about the project. Surveys conducted by
Unigold in 2020 allowed members of the community to voice concerns
about water quality, land disturbance, blasting operations, dust
control and impacts to wildlife. Unigold is committed to addressing
concerns and continuing the dialogue with potentially affected
stakeholders through the detailed engineering and environmental
assessment process.
The local community has expressed strong support
for the project. The main interest in the project has a focus on
employment and entrepreneurial opportunities. In 2020 more than 80
community members worked at the Company’s projects in the
Candelones area.
About Unigold Inc. – Discovering Gold in
the Caribbean
Unigold is a Canadian based mineral exploration
company traded on the TSX Venture Exchange under the symbol UGD,
the OTCQX exchange under the symbol UGDIF, and on the Frankfurt
Stock Exchange under the symbol UGB1. The Company is focused
primarily on exploring and developing its gold assets in the
Dominican Republic. The Candelones oxide gold deposit is within the
100% owned Neita Fase II exploration concession located in Dajabón
province, in the northwest part of the Dominican Republic. Unigold
has made an application to convert part of this this exploration
concession into a 9,990 Ha Exploitation Concession: “Neita Sur”.
Unigold made a subsequent application to renew the Exploration
Concession over those areas of Neita Fase II that do not fall
within the Exploitation Licence area: “Neita Norte”. Both
applications are pending approval by the Dominican Government. The
Candelones project area is about 20 kilometers south of the town of
Restauraćion. The oxide deposit occurs at surface as a result of
the tropical weathering of underlying mineralization. Unigold has
been active in the Dominican Republic since 2002 and remains the
most active exploration Company in the country. The Neita Fase II
exploration concession is the largest single exploration concession
covering volcanic rocks of the Cretaceous Tireo Formation. This
island arc terrain is host to Volcanogenic Massive Sulphide
deposits, Intermediate and High Sulphidation Epithermal Systems and
Copper-gold porphyry systems. Unigold has identified over 20 areas
within the concession area that host surface expressions of gold
systems. Unigold has been concentrating on the Candelones
mineralization and continues to expand the deeper sulphide
resources with on-going drilling.
Forward-looking Statements
Certain statements contained in this document,
including statements regarding events and financial trends that may
affect our future operating results, financial position, rates of
return, and cash flows, may constitute forward-looking statements
within the meaning of the federal securities laws. These statements
are based on our assumptions and estimates and are subject to risk
and uncertainties. You can identify these forward-looking
statements by the use of words like “estimate”, “strategy”,
“expects”, “plans”, “believes”, “will”, “estimates”, “intends”,
“projects”, “goals”, “targets”, and other words of similar meaning.
You can also identify them by the fact that they do not relate
strictly to historical or current facts. We wish to caution you
that such statements contained are just predictions or opinions and
that actual events or results may differ materially. The
forward-looking statements contained in this document are made as
of the date hereof and we assume no obligation to update the
forward-looking statements, or to update the reasons why actual
results could differ materially from those projected in the
forward-looking statements. Where applicable, we claim the
protection of the safe harbour for forward-looking statements
provided by the (United States) Private Securities Litigation
Reform Act of 1995.Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information please visit www.unigoldinc.com or contact:
Mr. Joseph Hamilton
Chairman & CEO
jhamilton@unigoldinc.com
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