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Carlisle Announces Preliminary Economic Assessment for the Lynn Lake Gold Camp
December 02, 2013 7:30 AM EST | Source: Carlisle Goldfields Limited
Toronto, Ontario--(Newsfile Corp. - December 2, 2013) - Carlisle Goldfields Limited (TSX: CGJ) ("Carlisle" or the "Company") is pleased to announce that it has received the results of a positive Preliminary Economic Assessment ("PEA") for its Lynn Lake Gold Camp ("Lynn Lake"). The results of the PEA include a Pre-tax Net Present Value ("NPV") at a 5% discount rate of $625 million with a Pre-tax Internal Rate of Return ("IRR") of 34.4% . Carlisle engaged Tetra Tech ("Tetra Tech") to complete the PEA (see press release dated June 12, 2013).
PEA Highlights:
Highlights from the PEA, with the base case gold ("Au") price of US$1300/oz are as follows (all figures are in Canadian Dollars unless otherwise stated):
| Pre-Tax | Post-Tax | ||
| NPV at 5% of $625 million | NPV @ 5% of $377 million | ||
| IRR of 34.4% | IRR of 25.5% | ||
| Net cash flow of $946 million | Net cash flow of $603 million | ||
| Payback period of 2.42 years | payback of 2.77 years | ||
- Initial capital costs of $274 million, which includes $41.5 million in contingency costs
- Central milling facilities with a 10,000 tonnes per day ("tpd") milling capacity
- Mine life of 13 years (four open-pit deposits including the advanced MacLellan Mine and Farley Lake Mine Projects and the earlier-stage Burnt Timber and Linkwood Projects)
- Life-of-Mine ("LOM") gold ("Au") production of 2.28 million ounces ("oz") and 1.43 million oz of silver
- Average grade of 1.94 g/t Au, LOM
- Annual average production of 175,000 oz Au with a peak of 277,000 oz in the 2nd year
- Pre-tax total average (C1) LOM cost of $659/oz Au1
1 Net of Silver (Ag) by-product credits
Graph 1: Total Annual Ounces (Au) Per Year vs. Annual C1 Costs (Pre tax)
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Bruce Reid, President and CEO of Carlisle states that, "We are pleased that this positive PEA demonstrates the potential economic viability of Carlisle's Lynn Lake Gold Camp and shows a deep value proposition for Carlisle shareholders. The current PEA demonstrates the longer term development potential of a sequenced pro-forma mine plan for the four known open pit gold and gold-silver deposits controlled by Carlisle at Lynn Lake. The Company will now immediately focus on further PEA level assessment of an optimized initial mine development scenario involving only the two higher grade and more advanced deposits, the MacLellan Mine Project and the Farley Lake Mine Project (Table 1).
Table 1 Grade-tonnage (gold-only) parameters of the four deposits at the Lynn Lake Gold Camp. These were calculated using a 0.6 Gram per Tonne cut-off
| Project | Resource Category | MacLellan Mine Project | Farley Lake Mine Project | Burnt Timber Project | Linkwood Project | Combined Projects |
| Tonnes | Measured | 8,116,000 | - | - | - | 8,116,000 |
| Indicated | 7,887,000 | 5,047,000 | 796,000 | 708,000 | 14,438,000 | |
| Inferred | 574,000 | 2,730,000 | 7,183,000 | 6,823,000 | 17,310,000 | |
| Au Grade (g/t) | Measured | 2.13* | - | - | - | 2.13 |
| Indicated | 1.69* | 3.45 | 1.53 | 1.32 | 2.28 | |
| Inferred | 1.84* | 2.75 | 1.39 | 1.43 | 1.63 | |
| Contained Ounces of Gold | Measured/ Indicated | 866,000* | 503,000 | 35,000 | 27,000 | 1,451,000 |
| Inferred | 31,000* | 217,000 | 288,000 | 280,000 | 816,000 | |
*Gold Equivalent ("AuEq") Grade and Resources
Capital and Operating Costs
The total estimated initial capital costs for development of all four known deposits at the Lynn Lake Gold Camp is $274 million, which includes an 18% contingency allowance of approximately $41 million. Tables 2 and 3 highlight the Lynn Lake Gold Camp capital cost and operating cost summaries. Graph 2 highlights the comparison of operating cost vs. gross revenues (excludes processing costs and royalty costs).
Graph 2: Operating Costs vs. Gross Revenues
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*Note: totals may not represent the exact sum or report due to rounding.
Table 2. Lynn Lake Gold Camp Capital Cost Summary
| Category | Initial Capex ($ millions) | Sustaining Capex LOM ($ millions) | Total Cost LOM ($ millions) |
| Mining | 25.81 | 115.72 | 141.53 |
| Processing | 120.71 | 0 | 120.71 |
| Infrastructure | 33.50 | 27.68 | 61.18 |
| Environmental | 3.13 | 0 | 3.13 |
| Subtotal Direct Capital Costs | 183.15 | 143.40 | 326.554 |
| Indirect Capital Cost | 40.50 | 11.00 | 51.50 |
| Owner's Costs including closing bond | 8.62 | 4.61 | 13.23 |
| Contingency | 41.45 | 30.28 | 71.73 |
| Total Capital Costs | 273.72 | 189.29 | 463.01 |
*Note: totals may not represent the exact sum or report due to rounding.
Table 3. Lynn Lake Gold Camp Operating Cost Summary
| Category | Units | LOM Unit Cost ($) | Total Cost LOM ($ Millions) |
| Geology | $/t-milled | 0.16 | 6.33 |
| Mining | $/t-milled | 16.49 | 657.50 |
| Processing | $/t-milled | 16.54 | 659.54 |
| Environmental | $/t-milled | 0.21 | 8.26 |
| Tailings | $/t-milled | 0.48 | 19.25 |
| Site G&A | $/t-milled | 2.09 | 83.17 |
| Haulage | $/t-milled | 3.18 | 126.60 |
| Total Operating Costs | $/t-milled | 39.15 | 1,560.65 |
| Total Gross Revenues LOM (excludes royalty costs) | 3,016.87 | ||
*Note: totals may not represent the exact sum or report due to rounding.
Sensitivity Analysis
The Lynn Lake Gold Camp project economics are most sensitive to foreign exchange rate and gold price risk. Table 4 shows the project's sensitivity summary.
Table 4. Lynn Lake Economic Sensitivity Summary
| FX | Au Price | Opex | Capex | |
| Pre-tax NPV ($ million) | ||||
| -20% | $1,160 | $202 | $846 | $706 |
| -10% | $863 | $413 | $735 | $666 |
| Base | $625 | $625 | $625 | $625 |
| 10% | $430 | $837 | $515 | $584 |
| 20% | $268 | $1048 | $404 | $542 |
| Pre-tax IRR ($ million) | ||||
| -20% | 51.1% | 17.1% | 41.3% | 43.5% |
| -10% | 42.3% | 26.5% | 38.0% | 38.6% |
| Base | 34.4% | 34.4% | 34.4% | 34.4% |
| 10% | 27.2% | 41.5% | 30.7% | 30.8% |
| 20% | 20.3% | 47.9% | 26.6% | 27.7% |
Graph 3: Lynn Lake Economic Sensitivity
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The PEA Technical Report will be filed on SEDAR within 45 days of this news release. The information presented summarizes the results of the PEA for a mine and processing scenario based on an NI 43-101 compliant mineral resource estimate prepared by P&E Mining consultants which includes assay data up to May 1, 2013.
The PEA was prepared by Tetra Tech in accordance with the standards of NI 43-101. The PEA is considered preliminary in nature. It includes inferred mineral resource estimates that are too speculative to have the economic considerations applied that would enable classifications as mineral reserves. There is no certainty that the conclusions within the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Quality Assurance
Mike McLaughlin, P.Eng. is a Principal Project Manager and Mine Engineer of Tetra Tech and conducted the PEA Project management. He is a Qualified Person under the requirements of NI 43-101 and has reviewed the technical content of this press release and approved its dissemination.
Rick Adams, P.Eng., Chief Operating Officer and Peter Karelse, P.Geo., VP Exploration of Carlisle are Qualified Persons under the terms of NI 43-101 and have reviewed the technical content of this press release on behalf of the Company and approved its dissemination.
About Carlisle: Carlisle Goldfields Limited is a Canadian based gold exploration and development company focused on development of its Lynn Lake Gold Camp in the Lynn Lake Greenstone Belt of Northern Manitoba, covering approximately 28,727 hectares, which includes the former MacLellan Gold mine and two other former producing gold mines as well as numerous other historically identified gold zones, all within close distance of the town of Lynn Lake, Manitoba. The Lynn Lake Gold Camp now has five NI 43-101 compliant resource estimates . Further details including technical reports are available on SEDAR (www.sedar.com)
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FOR FURTHER INFORMATION PLEASE CONTACT BELOW
CARLISLE GOLDFIELDS LIMITED
2702 – 401 BAY STREET
TORONTO, ONTARIO, CANADA
info@carlislegold.com
www.carlislegold.com
Nicholas Konkin
Investor Relations
416-642-0869 ext. 353 or nkonkin@buickgroup.com
This press release shall not constitute an offer to sell or solicitation of an offer to buy the securities in any jurisdiction. The Company’s shares and other securities have not been and will not be registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent an applicable exemption from the registration requirements.
Except for statements of historical fact contained herein, the information in this press release may constitute "forward-looking information" within the meaning of Canadian securities law. Other than statements of historical fact, all statements are "forward-Looking Statements", including the establishment and estimate of resources, that involve various known and unknown risks and uncertainties and other factors. There can be no assurance that such statements will prove accurate. Results and future events could differ materially from those anticipated in such statements. Readers of this press release are cautioned not to place undue reliance on these "forward-looking statements". Except as otherwise required by applicable securities statutes or regulation, Carlisle expressly disclaims any intent or obligation to update publicly forward-looking information, whether as a result of new information, future events or otherwise.
Neither IIROC nor the TSX accepts responsibility for the adequacy or accuracy of this release.