(TheNewswire)
Preliminary Economic Assessment Shows a 42.6% Pre-Tax IRR, C$ 14.08M Pre-Tax NPV5% And Less Than Two YearsPayback
Vancouver, B C - April 1 4 ,2023 - ESGold Corp. (“ESGold” or the “Company”)(CSE:ESAU ) ( Frankfurt:N2W ) ( OTC:SEKZF) is pleased to announce that it hasfiled on SEDAR the NI 43-101 Technical Report on Mineral ResourceEstimate and Preliminary Economic Assessment of the Montauban GoldProject, (“PEA”) located at Notre-Dame-de-Montauban, Quebec. The results of the PEA were previously announced in the Company’snews release dated March 2, 2023. A copy of the PEA is also locatedon the Company’s website https://esgold.com/operations/Montauban
The mineral claims comprising the Montauban property (the“Property”) are located in southern Quebec, 120 km west of QuébecCity and 80 km northeast of Trois-Rivières, and straddle the borderof the Mauricie and Capitale-Nationale Administrative Regions ofQuebec. The PEA presents a positive tailingsreprocessing operation with very attractive economics, and sets thetable for the rejuvenation of Montauban-les-mines with the proactiveremediation of the legacy mine tailings. The PEA comprises the firstcornerstone of ESGold’s strategy to revive the area’s 100 yearmining history.
PEA Highlights:
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Pre-tax net present value (NPV)(discount rate 5%) of C$ 14.08M, internal rate of return (IRR) of42.6% and payback of less than 2 years;
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After-tax NPV (discount rate 5%) ofC$ 6.99M, IRR of 23.4% and payback of less than 2 years
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Assumed gold (Au) price $1750US/Oz,silver (Ag) price $21US/Oz and mica concentrate price $200US/t with aCAD/USD exchange rate of 1.35;
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4 years of mine life with 923,000tonnes of tailings at 0.41 g/t Au 33.34 g/t Ag and the recovery of57,187t of mica;
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Revenue of C$ 62.2M;
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Life of Mine capital of C$17.04M;
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Operation cost per tonne of tailingsat C$ 29
Jean Yves Therien, CEO & Director, “The PEAclearly demonstrates the low cost and positive return of the Montaubanreprocessing / remediation project using a traditional excavation andreprocessing scenario, which includes pulping, pumping, gravityseparation, cyanidation for gold/silver recovery with Merryl Crow. Thestabilization of the orphan tailings at Montauban includes theaddition of limestone from the nearby St-Marc des Carrières quarry.The Company intends on cleaning the area and delivering a securednon-acid generating tailings pond. The various tailings have uniquetopography and are not saturated, which makes them amenable to rapiddevelopment and extraction. The Company will also recover a portion ofthe coarse micas during processing. We are in a good position, as weare permitted and have an approved reclamation plan.
The positive results of the PEA will allow us to seekfinancing for the completion of the mill, the construction of the newtailings pond and submission of the Bond for the reclamationplan.
The Property also hosts an historical undergroundhard-rock resource prepared by Mr. J. Marchand in 2003, which is notconsidered current by the Company. The 2003 technical report describestwo surface blocks: one identified as the south block with 114,473 tons at 6.1 g/t Au and 94 g/t Ag — equivalent to22,281 ounces of gold and 347,086 ounces of silver — and a northblock with 274,500 tons grading 2.8 g/t Au and 15.0 g/t Ag —corresponding to 24,917 ounces of gold and 133,912 ounces ofsilver. It is also our goal to exploit these hard rockhistorical mineral resources, which will need additional work tocomply with current NI 43-101 standards. Two underground sectorsdrilled in 2010 and 2011 are identified for potential near-surfacebulk sampling. The Company has yet to apply for permitting to extractthese short-term complementary potential mineral resources. We alsointend to further explore the Property, as it is the first time thatmost of the key territory is owned by a single exploration company. This offers us tremendous potential and room forexpansion from an exploration perspective.
In short, we are not there for only four years. We willdevelop the camp in a manner that will respect of all stakeholdersaround our milling facility, but our priority is to reclaim the legacytailings and restore the heydays of mining at Montauban.”
PEA Overview, Description andLocation
The Property as of today comprises a contiguous blockof 76 claims covering 2,360.2 ha or 23.6 km 2 , and isunderlain by rocks of the Grenville Province, which borders thesoutheast part of the Canadian Shield. There are five (5) principaltailings sites on the Property (Anacon Lead 1, Anacon Lead 2,Tetreault 1, Tetreault 2 and the Notre-Dame-de-Montauban tailings –see Figures 1 & 2) that were generatedduring the processing of ore from the historic underground MontaubanMine, which hosted a gold-rich VMS deposit.
From 1911 to 1955, a total of 2,655,588 short tons ofmassive-sulphide ore grading 4.53% Zn, 1.54% Pb, 0.69 g/t Au, and 85.7g/t Ag was mined from the Tétreault-Anacon Mine, and 102,000 shorttons grading 2.88% Zn, 1.03% Pb and 34.3 g/t Ag of massive-sulphideore was extracted from the Montauban Mine from 1953 to 1954 (MontaubanZone). Marginal to the massive-sulphide ore were two zones (north andsouth), where small volumes of Au–Ag mineralization were processed.From 1983 to 1987, a total of 330,830 metric tons of ore, grading 4.27g/t Au and 12.45 g/t Ag, was extracted from the North Gold Mine, andanother 225,433 metric tons, grading 3.70 g/t Au and 72.37 g/t Ag, wasextracted from the South Gold Mine between 1987 and 1990.
Now the project calls for the excavation and pumping oftailings material to the mill for recovery of coarse micas into asellable concentrate, followed by regrinding prior to cyanidation withrecovery by Merryl Crow process to allow production of dore bars.
As per discussions with the municipality, a formalagreement was signed and a royalty of 1% will be paid to themunicipality.
The PEA considers a conventional truck and shovel sandpit operation with the exception of having a pumping box where thetailings will be mixed with water and pumped to the mill, reducing theconsumption of fuel and required equipment for the Project. In short,the mineralized material is excavated and will be discharged ongrizzly, then put in slurry and pumped to the mill. The mill will bein operation full time over nine months of the year(April-December).
The PEA is based on the mineral resource estimatepresented in a Technical Report titled “ NI43-101 Technical Report: Mineral Resource Estimate andPreliminary Economic Assessment of the Montauban Gold Project,Quebec ” dated March 1, 2023 andprepared by JPL GeoServices, Edmond St-Jean Eng., Groupe Alphard, andGoldMinds Geoservices Inc. (“GMG”) of Quebec City, Quebec,Canada.
Figure 1: Property location (outlined) as at February28, 2023.
Figure 2: Project tailings site locations
Mineral Resources Estimate
The Mineral Resource Estimate (MRE) for the Montaubantailings project is based on historical data and recent (2022) SONICdrilling data provided by the ESGold in Excel spreadsheets, as well asthe sampling program completed on the Notre-Dame-de-Montauban tailings in November 2022.
The drill hole database contained352 valid drill hole collars, with a total meterage of 1,654.04 m and1,170 assay intervals totaling 1,498.05 m. For theNotre-Dame-de-Montauban tailings a total of 35 test pits and trenchestotaling 77.44 m were excavated. A total of 112 samples (includingBlanks and Standards) were collected and sent to SGS laboratory inQuebec City for Au, Ag and multi-element analysis.
As part of the MRE process, the Company and GoldMinds compiled,verified and modelled all technical information available from theMontauban and the Notre-Dame-de-Montauban tailings. A total of fivewireframes were created by digitizing the mineralised intercepts onsections. A total of five block models were created.
Estimated mineral resources for the Montauban and the Notre-Dame-de-Montauban tailings indicatedresources are 7,800 Au ounces and 610,350 Ag ounces (603,700 tonnesgrading 0.4 g/t Au and 31.4 g/t Ag), inferred resources are 4,200ounces gold and 379,100 ounces silver (319,300 tonnes grading0.41 g/t Au and 36.9 g/t Ag), ( Table 1 ).
It is important toinform the reader that most of the tailings in the MRE are securedunder agreements between ESGold and the surface landowners. By mininglaw in the province of Quebec, the owner of the surface right land isalso owner of the material deposited on its land.
Table 1 : Themineral resources estimation for the Montauban and theNotre-Dame-de-Montauban tailings
Montauban tailings | Au (g/t) | Ag (g/t) | AuEq (g/t) | Tonnes | Au Oz | Ag Oz | AuOz eq |
Indicated | 0.40 | 31 | 0.78 | 603 700 | 7 800 | 610 350 | 15 000 |
Inferred | 0.34 | 28 | 0.67 | 292 000 | 3 150 | 258 900 | 6 400 |
Notre-Dame-de-Montaubantailings | Au (g/t) | Ag (g/t) | AuEq (g/t) | Tonnes | Au Oz | Ag Oz | AuOz eq |
Inferred | 1.21 | 137 | 2.84 | 27 300 | 1 050 | 120 200 | 2 500 |
Total Indicated | 0.40 | 31.45 | 0.77 | 603 700 | 7 800 | 610 350 | 15 000 |
Total Inferred | 0.41 | 36.93 | 0.87 | 319 300 | 4 200 | 379 100 | 8 900 |
Notes:
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The Mineral Resources provided in this table wereestimated by M. Rachidi P.Geo., and C. Duplessis, Eng., (QPs) ofGoldMinds Geoservices Inc., using current Canadian Institute ofMining, Metallurgy and Petroleum (CIM) Standards on Mineral Resourcesand Reserves, Definitions and Guidelines.
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Mineral Resources which are not Mineral Reserves do nothave demonstrated economic viability. The estimate of MineralResources may be materially affected by environmental, permitting,legal, title, market or other relevant issues. The quantity and gradeof reported Inferred Mineral Resources are uncertain in nature andthere has not been sufficient work to define these Inferred MineralResources as indicated or Measured Mineral Resources. There is nocertainty that any part of a Mineral Resource will ever be convertedinto Mineral Reserves.
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The database used for this mineral estimate includesdrill results obtained from 2010, 2018 and 2022 drill programs as wellas the 2022 exploration works.
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For the Montauban tailings (Anacon Lead 1, Tetreault 1,Anacon Lead 2 Tetreault 2) the mineral resource presented here wereestimated with a block size of 3mE x 3mN x 1.5mZ. The blockswere interpolated from equal length composites (1.5 metre) calculatedfrom the mineralized intervals. Prior to compositing, high-grade goldassays were capped to 3 g/t Au and 125 g/t Ag. The mineral estimationwas completed using the inverse distance to the square methodologyutilizing three passes. For pass 1 and pass 2 minimum of 2 compositesand maximum of 05 composites with a maximum of 1 composites from thesame drillhole (a minimum of two drillholes are needed to estimateblocks). For pass 3 minimum of 2 composites and maximum of 5composites were used. The Indicated resources classified using aminimum of two drillholes within 20 m of each other or less were used.The inferred resources were classified by a minimum of two drillholeswithin 50m of each other or less. Tonnage estimates are based on a fixdensity of 1.52 tonnes per cubic metre.
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For the Notre-Dame-De-Montauban tailings the mineralresource were estimated with a block size of 0.5mE x 0.5mN x 0.5mZ.The blocks were interpolated using central composites calculated fromthe mineralized intervals. Prior to compositing, assays were notcapped. The mineral estimation was completed using the polygon method.The resources classified as inferred and the tonnage estimates arebased on a fix density of 1.5 tonnes per cubic metre.
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The commodity prices showed in the table below. Theformula used for AuEq calculation: AuEq= ((Au x 75.96) +(Ag x0.91))/(2362.5/31.103). The Mineral resources are in-situ and therecovery values are not used.
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Tonnages and AuEq oz in the table above are rounded tonearest hundred. Numbers may not total due to rounding
To estimate the micas concentrations in the Montaubantailings we took the hole samples from Anacon Lead 1 (6 holes) andfrom Tetreault 2 (3 holes). A total of 32 tailings samples from 9different holes were sent to SGS laboratory in Quebec City for micatest separation.
Micas (%) | Tonnes | Micas (t) | |
Indicated Micas Tetreault_2 | 4 | 116 800 | 4 70 0 |
Total Micas Indicated | 4 | 116 800 | 4 700 |
Inferred Micas AL1 | 9 | 571 900 | 51 500 |
Inferred Micas Tetreault_2 | 4 | 26 100 | 1 000 |
Total Micas Inferred | 8,8 | 598 000 | 52 500 |
Mr. Paul Mastantuono COO & Director continued“The PEA focuses on the precious metals and mica resource from fouridentified tailings. Additionally, the property hosts multipleprecious metal bearing tailing sites that have yet to be drill-testedand fully explored. Our vision of the Montauban project is two-fold,extraction of precious metals and silicate minerals (Mica), and theusage of the processed ‘clean’ residue to produce constructionbuilding materials. ESGold’s new process will create,through the application of an organic polymerhigh-quality, sturdy and economical building products including,cinder blocks, bricks, paving stone, parking columns and highwayjersey barriers used to define traffic lanes. The project as a wholehas been designed to employ the best standard operating practices tosignificantly reduce the company’s environmental footprint.”
Mining & Processing
The operation is to bring the material from thetailings pile to the pump box near to the processing plant. Theproject is to feed 270,000 t of tailings to the plant for the first 3years and 113,000t for the fourth year of operation for a total of923,000 metric tonnes. The contractor at mining operation will operateon a 9-month operation basis to avoid freezing temperatures.
There will be no need for drilling and blasting as thematerial is already of screen size. The material will be picked up bya shovel (Cat 336 size type) or a loader (Cat 966 size type). Thehauling work can be done by a single articulated truck (Cat 730 sizetype) with a capacity of 14 cubic meters and a second truck will beavailable on site as backup. The truck will unload near to the pumpbox (plumper) and a loader will feed the plumper. At short distancethe excavator will discharge directly on the grizzly at the pump box.The work will be contracted out on a 24 hour/7-day basis.
At the beginning of the initial production as the pileis close to the plant, a wheel loader could be used on the pile toload the truck and the same loader could load the plumper by drivingdown to the plant. After a while, the wheel loader will not be able todo both and a shovel should be brought to the pile to do the work.Limited power is needed on the pile for the pump box and a lightingsystem will be installed on the pile near the tailing is mixed intoslurry in the pump box.
Supporting on-site infrastructure will include a smalladministrative building, warehouse, fuel tank, spare generators andseveral 40-foot steel containers for material storage. Employees willbe lodged nearby, no need for a logging camp.
The most efficient tests include the following steps:sieving the feed to 100 Mesh, the coarse fraction goes to the Humphreyspiral which separates the sample into light, intermediate and heavyfractions. The intermediate fraction is passed three times throughHumphrey’s spiral and the light fraction ispassed one last time trough Humphrey’s spiral. This method producesa mica concentrate with a mass pull varying from 4 to 9 %. Theremaining material is ground and fed into the cyanidation tank for 48hours with 3 grams of sodium cyanide, zinc power is used for thecement which is thereafter melted to produce the bars. The averagerecovery for gold is 92% and 77% for silver. A detailed flowsheet willbe supplied in the technical report.
Isometric view looking south of the designed mill by Groupe Alphardbased on Edmond St-Jean flow-sheet.
Environment, Permitting andSocial
It is of public knowledge that the Montauban region hasa high environmental legacy of contamination by historical tailingsand it is the objective of ESGold to correct the situation by removingas much tailings as possible from these lands and stabilize them intoa new tailings.
The company is fully permitted with its Certificate ofAuthorization and approved reclamation plan for Anacon Lead 1 i.e. forits mill and most of its tailings tonnage. It is important to mentionthat the Municipality has approached the company and requested theremoval of the tailings adjacent to the track and its inclusion intothe plan. The company is in close collaboration with the Municipalityand the Ministry of Environment. The company will probably add theMontauban United (where historical and tailings dam failure occurredin the past) and the overflow of the Tetreault tailings eventually.
The community is supportive of the project as it willremove tailings and creates jobs and local opportunities.
Capital Costs
The PEA is based on a capital cost summary, inaccordance with AACE Class 5 guidelines with an estimated accuracy of+/- 30%, which is shown in the table below:
Cost – CA$ | |
Mine capital costs | 450,000 |
Plant Equipment+Installation | 7 860,000 |
Infrastructure capital costs | 2 018,500 |
Closure costs | 1 150,000 |
Contingency (30%) | 3 443,500 |
Owner costs (5%) | 574,000 |
EPCM costs (5%) | 574,000 |
Total initial capex(rounded) | 16 070,000 |
*Numbers rounded
A required working capital estimated at $1 761 200 isrequired and should be added to the required capex.
Operating Costs
Mine operating costs by activity area are shown in thetable below.
Table2: Operating costs detailed
Cost | Cost | |
CA$ | CA$/t tailings mined | |
Mine operating costs | 4,153,500 | 4.50 |
Processing costs | 20,049,400 | 21.72 |
G&A | 2,889,800 | 3.13 |
Total | 27,092,700 | 29.40 |
*Numbers may not add due to rounding
Economic Model
The main assumptions for the economic analysis and theresults are summarized in the following tables:
Table 3: Main assumptions of EconomicAnalysis
Items | Units | Values |
Micas concentrate | US$/mt | 200 |
Gold selling price | US$/oz | 1 750 |
Silver selling price | US$/oz | 21 |
Mining (mineralized tailings) tonnage over LOM | metric tonne | 923,000 |
Royalty on sales | % | 1.00 |
Federal tax | % | 15.00 |
Provincial tax | % | 11.50 |
Mining tax | % | 16.00 |
Table 4: Base Case economics
Items | Value | |
CA$ | ||
Total revenue of sales | 62,207,000 | |
Total operating costs | 27,093,000 | |
Before-tax discounted | (5.0%) NPV | 14,079,000 |
After-tax discounted | (5.0%) NPV | 6,992,000 |
*Numbers rounded
Table 5: Detailed Cash flow
Note NI-43-101: there is no Ore in this project for themoment as it requires either a prefeasibility or feasibility study todefine Ore and this PEA uses mineral resources partially classified asInferred which is not used in the preparation ofmineral reserves.
Figure 4. Sensitivity of NPV5 for theBase Case before taxes.
Figure5. Sensitivity of IRR for the Base Case before taxes.
Additional information is provided in the Technicalreport.
Recommendations andOpportunities
The following opportunities have been identified as potentialenhancements for the Montauban project. These opportunities could havematerial value-added impact on the project although additional work isrequired for them to be integrated.
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The current tailings resource estimate outlines only aproportion of the tailings that should be expected in the project areaaccording to historical production records.
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The project land package hosts historical resources inhard rock that are non-compliant with NI 43-101 standards.
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The project also hosts greenfield exploration potentialas modern exploration techniques have not been systematically appliedover the property.
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Toll milling agreements with projects outside theMontauban area could allow mill utilisation and revenue following thedepletion of the current project resource.
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The Montauban project has the effect of reclaiming anorphan site therefore removing the environmental liability attributedto the Quebec Government. There are precedentsin the province of Quebec where the government offers financialsupport to projects reclaiming orphan sites.
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Due to the economic challenges in the region ofMontauban it is possible that government grants be obtained to fund aportion of employee salary and training costs.
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The mica value received in the current plan assumesthat the recovered mica is in the lower marketable quality range. Mica value can be substantially enhanced throughenrichment.
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The company has entered into a joint-venture agreementto create construction building materials with the use of theprocessed tailings and organic polymer binder.
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The Montauban project could be reshaped into a carbonoffset project for which carbon credits could be sold.
QA/QC
The tailings samples were placed into plastic bags. Sample tags wereinserted into each bag before being sealed and stored at the campsitein a secure area. At the completion of the program the samples weretransported by company trucks directly to the SGS laboratory in QuebecCity for preparation and analysis. Once dried, the samples passedthrough a 20-mesh sieve to break up any agglomerates, homogenized anda 150 g sub-sample pulverized to 85% less than 75 µm and submittedfor Au, Ag assays and ICP-scan for 42 elements. Au assay by Fire Assaywith Atomic Absorptions Spectrometry (AAS) finish, reporting limits0.02-200000 ppm for Au and Ag assay by 4-acid digest AAS, reportinglimits of 1-1000 ppm.
Blank and standard were inserted in each batch of 20 samples sequenceand sent to the laboratory for analysis in addition tothe standards, blanks and pulp duplicate inserted by SGSLaboratory.
The verifications of QP’s allow the disclosure ofthis study and press release.
Qualified Person
The technical content of this news release has beenreviewed and approved by Claude Duplessis, P.Eng., Merouane Rachidi P.Geo, and Daniel Dufort, P.Eng., of GoldMinds Geoservices Inc., JohnLangton P.Geo of JPL GeoServices, Edmond St-Jean P.Eng., ClaudeBissonnette P.Eng. and Francis Gagnon P.Eng. of Groupe Alphard inc.independent qualified persons as defined by National Instrument43-101.
Pour unetraduction française de ce communiqué de presse, veuillez visiternotre site Web à www.esgold.ca .
About the Company
ESGold Corp. is a Canadian environmentally aware resourceexploration and processing company. Management has demonstratedexpertise in advancing gold exploration projects into acquisitiontargets, most notably in the province of Quebec. ESGold’s principalrestoration and recovery project is the Montauban property situated inQuebec, just 80 kilometers west of Quebec City. Recently, the Companyhas also entered into a joint venture agreement to determine thepresence of recoverable metals in the Ottawa River, consistent withESGold’s commitment to environmental recoverysolutions .
For more information on ESGold Corp. please contact theCompany (+1 514-712-1532) or visit the website www.esgold.ca for past newsreleases, 3D model of the Montauban processing plant, media interviewsand opinion-editorial pieces. To keep up withwhat's going on with ESGold please join our shareholders chat room ontelegram : https://t.me/+SQeyLoDRjIAwMDVh
Onbehalf of the Board of Directors,
ESGold CORP.
Jean Yves Therien
Chief Executive Officer
John Stella
Investor contact
Tel: +1 514-712-1532
Email: info@esgold.ca
This press release contains"forward-looking information" that is based on the Company'scurrent expectations, estimates, forecasts, and projections. This forward-looking information includes, among other things, statements with respect to the Company's exploration anddevelopment plans. The words "will","anticipated", "plans" or other similar words and phrases are intended toidentify forward-looking information. Forward-looking informationis subject to known andunknown risks, uncertainties and other factors that may cause the Company's actualresults, level of activity,performance, or achievements to be materially different from thoseexpressed or implied by such forward lookinginformation.
Neither theCanadian Securities Exchange nor its Regulation Services Provideraccept responsibility for the adequacy or accuracy of thisrelease
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