The PEA outlines average annual gold production of 55,800 ounces for 6.5 years at an all-in sustaining cost of US$1,008/oz.
The project is expected to yield an after-tax net present value of $32.8 million at a 5% discount rate and internal rate of return of 17.8% at base case gold price of $1,400/oz following pre-production capital expenditure of $64.6 million. At a $1,500/oz gold price, these increase to $55 million and 25.4%. At a $1,600/oz gold price, they move to $77.2 million capex and 32.5% IRR.
"This PEA … shows the project can deliver solid returns for a modest capital investment. Gold Rock would be built and run by the same Fiore technical team who transformed the adjacent Pan mine into one of the most successful small gold mines in Nevada," said CEO Tim Warman.
The PEA included an updated pit-constrained indicated resource estimate of 19 million tonnes grading 0.66 grams per tonne containing 403,000oz, and an inferred resource of 2.7Mt grading 0.87g/t for 84,300oz.
The PEA contemplates mining from three adjacent open pits by conventional methods using a contract miner and haul trucks with 100 short ton capacity. The mix of equipment will be the same at both Pan and Gold Rock, which will allow for synergies and flexibility.
The majority of mineralised material will be processed viq a vat leaching circuit following a three-stage crush. Low grade material, consisting of 40% of the total tonnage and 9% of total recoverable gold ounces, will be agglomerated with vat tailings for heap leaching. Gold in solution from both leaches will be recovered in common carbon loading and stripping processes. Pan has an ADR plant for processing loaded carbons.
The PEA considers using existing infrastructure at Pan including access, grid power and lab facilities, management and administrative teams.
The PEA indicated opportunities to enhance project economics including further drilling between the pits to potentially add resources which may merge the pits and reduce the overall strip ratio. Fiore has permission to drill through a decommissioned leach pad from the former Easy Jr mine.
"Project economics are particularly sensitive to the stripping ratio, yet with geotechnical drilling still to be completed we have used relatively conservative assumptions for pit slope designs. An improvement of just 3 degrees in the pit slope angle results in a 32% decrease in LOM waste tonnage, with a marked reduction in operating costs," Warman said.
Fiore also believes there is potential to grow the resource base as the current resource occupies only about 3km of a more than 16km long trend of favourable geology.
Shares in Fiore Gold opened up 2% Thursday at C49c, valuing the company at $48 million.
