SOCIETE D'EXPLORATION VIOR INC. (TSX VENTURE: VIO)(FRANKFURT: VL5)
is pleased to announce the results of a Preliminary Economic
Assessment (PEA) and a new underground (U/G) resource estimate for
its 100%-owned Douay Ouest gold project in Northern Abitibi,
Quebec, Canada. Using a price of C$925 per ounce of gold, the
Preliminary Economic Assessment depicts a very robust model giving
a net cumulative cash flow of C$31.76 million, a pre-tax Net
Present Value (NPV) of C$24.61M at 5%, an Internal Rate of Return
(IRR) of 71.1% and a payback period of less than two years. The
mine life is five-year at a maximum annual production of 135,000
tonnes. The sensitivity analysis indicates that the IRR is still
more than 22% if the price of gold or the grade is down by 20%, and
is still more than 56% if the operating costs or the CAPEX are
increased by 20%. The new U/G resources, based on a revised
geological interpretation and more stringent calculation criteria,
are stated at 313,000 tonnes grading 7.75 grams per tonne gold in a
combined Measured and Indicated resource with an additional 267,000
tonnes grading 8.53 grams per tonne gold in the Inferred category.
The 43-101 compliant report was completed by SGS Canada Inc.
Preliminary Economic Assessment highlights for the pre-tax Base
Case are as follows:
----------------------------------------------------------------------
Unit Total
----------------------------------------------------------------------
Price of Gold C$/oz 925.00
----------------------------------------------------------------------
Tonnes milled (85% mining recovery) T 568,140
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Grade Oz Au/T 7.12
----------------------------------------------------------------------
Mill recovery % 92
----------------------------------------------------------------------
Ounces recovered Oz Au 119,651
----------------------------------------------------------------------
Gross Income C$ 110,678,341
----------------------------------------------------------------------
Total Costs C$ -67,573,596
----------------------------------------------------------------------
----------------------------------------------------------------------
Operating Cash Flow C$ 43,103,321
----------------------------------------------------------------------
Total CAPEX C$ -11,096,750
----------------------------------------------------------------------
Other expenses/revenues C$ -243,785
----------------------------------------------------------------------
----------------------------------------------------------------------
Net Cash Flow C$ 31,764,210
----------------------------------------------------------------------
----------------------------------------------------------------------
NPV @ 5% C$ 24,611,416
----------------------------------------------------------------------
IRR % 71.13
----------------------------------------------------------------------
----------------------------------------------------------------------
The sensitivity analysis is summarized in the following tables:
-------------------------------------------------------------------------
Changes Changes Gold Price Cash Flow NPV (5%) IRR
% C$ C$ C$ C$ %
-------------------------------------------------------------------------
78% -200 725 7,922,000 5,133,000 21.8
-------------------------------------------------------------------------
100% base case 925 31,764,000 24,611,000 71.1
-------------------------------------------------------------------------
122% +200 1125 55,606,000 44,166,000 112.6
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Changes Changes Grade Cash Flow NPV (5%) IRR
% g/T Au g/T Au C$ C$ %
-------------------------------------------------------------------------
79% -1.50 5.62 8,447,000 5,558,000 23.0
-------------------------------------------------------------------------
100% base case 7.12 31,764,000 24,611,000 71.1
-------------------------------------------------------------------------
121% +1.00 8.62 55,081,000 44,090,000 112.4
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Changes Changes Operating Cash Flow NPV (5%) IRR
% C$/T Costs C$/T C$ C$ %
-------------------------------------------------------------------------
80% -13.25 53.01 39,292,000 30,763,000 84.7
-------------------------------------------------------------------------
100% base case 66.26 31,764,000 24,611,000 71.1
-------------------------------------------------------------------------
120% +13.26 79.51 24,236,000 18,460,000 56.9
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Changes Changes CAPEX Cash Flow NPV (5%) IRR
% C$ C$ C$ C$ %
-------------------------------------------------------------------------
85% -1,664,750 9,432,00 33,627,000 26,335,000 84.4
-------------------------------------------------------------------------
100% base case 11,096,750 31,764,000 24,611,000 71.1
-------------------------------------------------------------------------
115% +1,664,513 12,761,263 29,901,000 22,888,000 60.6
-------------------------------------------------------------------------
The PEA mine development scenario calls for a one-year,
pre-production period where:
- The surface infrastructure will be upgraded.
- The shaft, which is actually collared to the bedrock, will be
deepened to 130 metres.
- Stations, services installation and ventilation raise will be
completed.
- A parallel drift will be done in order to perform a detailed
definition drilling of the zones.
- A 5,000-tonne bulk sample will be taken by drifting in the
zones.
- 1st year CAPEX is C$6.2M.
The low start-up CAPEX is mainly due to the fact that about C$7M
(2009 value) in infrastructure is already installed on site and
kept in care and maintenance. It consists mainly of:
- A 5-km-all-weather gravel road.
- A concrete shaft collared to the bedrock.
- A steel headframe and a shaft house.
- A 1,100m-capacity double drum hoist.
- An electric station and power line linked to Hydro Quebec
grid.
- A main steel building hosting the hoist, garage, dry and
office.
The main points of the 5-year mining plan for the production
period are:
- Long-hole mining method at a direct cost of C$66.26/tonne.
- Total production costs of C$118.10/T (mining, transport,
milling, admin).
- Vertical development by ramp with LHD equipment.
- 135,000 T maximum yearly production.
- 85% mining recovery
- 92 % mill recovery (previous tests gave between 92 and
95%).
- Annual production of 28,000 ounces gold.
- C$925/oz gold price (last 3 years C$ daily average).
The Preliminary Economic Assessment was developed from new
resource estimates based on a revised geological interpretation and
more stringent calculation criteria than the ones used in the
2005-2007 estimates. During the summer of 2009, Vior management
re-logged all the diamond drill holes done on the Douay Ouest zone.
This led to a more coherent database and a more precise
interpretation with better confidence in the extension/continuity
of the mineralization, geological units and structures.
The new 43-101 compliant resource estimates on Douay Ouest are
as follow:
----------------------------------------------------------------------
Category Tonnage Gold Grade (g/T) Ounces of Gold
----------------------------------------------------------------------
Measured 46,000 8.97 13,268
----------------------------------------------------------------------
Indicated 267,000 7.54 64,732
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL 313,000 7.75 78,000
----------------------------------------------------------------------
Inferred 267,000 8.53 73,232
----------------------------------------------------------------------
To Vior management, the PEA reveals a highly profitable project
at actual operation costs and gold prices. The sensitivity analysis
indicates a robust economic model that is still quite positive at a
price of gold of C$725 (U$683) per ounce. Moreover, the management
is truly confident in the exploration potential of the rest of the
property which covers a partly explored 20-km stretch of the
prolific Casa Berardi-Cameron Regional Fault. In parallel to the
development of the Douay West U/G project, an aggressive
exploration program is being planned for the entire property.
Claude St-Jacques, Vior's President, said: "We are very pleased
with the results of the PEA. It clearly shows that our wholly-owned
Douay Ouest Project stands to be financially rewarding with robust
economic margins and high rates of return. The PEA is a benchmark
to build on."
The National Instrument 43-101 compliant technical report for
the new resource estimate and the PEA was prepared by SGS Canada
Inc. of Montreal. For the purposes of the PEA, the Measured,
Indicated, and Inferred resources were added up and the resources
in the 30-metre rock pillar were subtracted. According to National
Instrument 43-101 guidelines, a PEA is considered preliminary in
nature and includes the use of inferred mineral resources which are
considered too speculative geologically to apply economic
considerations that would enable them to be categorized as mineral
reserves. Mineral resources that are not mineral reserves have not
demonstrated economic viability. Thus, there is no certainty that
the production profile concluded in the PEA will be realized. To
address this issue, Vior management is planning a detailed
definition drilling program, either from surface or from
underground, depending which way will be most advantageous. This
should allow upgrading of most of the Inferred resources to the
Indicated category.
The SGS's 43-101 compliant report will be up-loaded on the SEDAR
website (http://www.sedar.com/) and on Vior's site
(http://www.vior.ca) in the next few days for easy public
access.
This press release was prepared and reviewed by Jacquelin
Gauthier, P. Eng., who is Vior's Vice-President and Qualified
Person under the guidelines of National Instrument 43-101. Gaston
Gagnon, P. Eng., and Maxime Dupere, P.Geo, the qualified persons
under SGS Canada Inc., were responsible for the report, the PEA and
the estimates therein. Denis Chenard, P. Geo., and Jacquelin
Gauthier, from Vior, were responsible for the 2009 re-logging and
re-interpretation of the entire Douay Ouest zones.
Profile
Vior is a growing mining company focused on developing its
properties. The company wholly owns the Douay Ouest gold project
and other mineral properties.
The TSX Venture Exchange (TSX Venture) does not accept
responsibility for the adequacy or accuracy of this Press
Release.
Contacts: Claude St-Jacques President 418-692-2678
cstjacques@vior.ca Jacquelin Gauthier Vice-president Exploration
418-692-2678 jgauthier@vior.ca www.vior.ca SEDAR : Societe
d'exploration miniere Vior inc.
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