MONTREAL, QUEBEC / ACCESSWIRE / May 6, 2014 / Gold Bullion
Development Corp. (TSXV: GBB) (OTCPINK: GBBFF) (the "Company" or
"Gold Bullion") announces it has received the
Preliminary-Feasibility Study "PFS" for the "Rolling Start" at
Granada. All in total cash costs for gold production at the higher
grades of 4.24 g/t gold from the open pits assessed by this study
are US $797 per ounce at an internal rate of return of 169% percent
before tax. The payback period for the $6.7 million needed to
commence the "Rolling Start" is just under 7 months with an NPV of
$24.65 million before taxes discounted at 6% within 3 years.
The after taxes NPV has an IRR of 139% with an NPV of $20.04
Million. At this stage of the property development the PFS
delineates gold production of 73,585 ounces at the annual rates of
25,669, 27,556 and 20,361 ounces per year respectively over the
next three years. The higher-grade resource to be mined for the
"Rolling Start" gold production is based on reserves of 569,000
tonnes at 4.24 g/t for 73.6 thousand ounces of gold at a cash cost
of US $797 per ounce. Mill feed including dilution is 170,000
tonnes at 3.72 g/t gold in the Proven Category and 398,600 tonnes
at 4.46 g/t gold in the Probable Category. These gold grades
demonstrate and are indicative of the inherent flexibility the
Company has with respect to grades contained in the current
resource at the 11,000-hectare Granada Mine property.
The "Rolling Start" study was prepared as a stand-alone project
utilizing custom milling (see press release MOU of April 10th for
details) at a local mill and solely relates to those mineral
reserves located within the open pits of the Granada deposit. The
"Rolling Start" does not take into account the underground mineral
resources, which also comprise a significant part of the Granada
Project.
The synergy of accessing an existing operating mill in the
prolific gold producing Abitibi region of Quebec in tandem with the
proposed open pit "Rolling Start" mineral extraction plan brings
the Company into position as a potential gold producer. During this
initial development phase the Company is continuing to study and
analyze the economics around underground mine development and will
also engage in "right sizing" property holdings.
The Company also has drill-defined targets to the north of the
LONG Bars Zone aimed at corroborating earlier drill data that
outlined the potential for an additional 1-2 million ounces of gold
at grades of 3.0 to 4.2 grams per tonne. (Press release dated
November 13th, 2013.) The current higher-grade resource estimation
and the potential addition to the resource cover approximately 20
percent of the already explored LONG Bars zone. By increasing the
input grade of the open pitable resource when practical, de-risking
of the project will remain an ongoing priority going forward.
This Preliminary Feasibility Study was prepared by SGS Canada
Inc. "SGS" in Blainville, Quebec with additional contributions from
other leading engineering firms and consultants, in accordance with
and as defined by National Instrument 43-101 "NI 43-101" Standards
of Disclosure for Mineral Projects.
Gold Production "Rolling Start" Highlights from the PFS are
summarized below:
----------------------------------------------------------------------------
|Assumptions |
|--------------------------------------------------------------------------|
| Gold Price (US$/oz) 1,260 |
|--------------------------------------------------------------------------|
| Canadian $ to US$ rate 1.11 |
|--------------------------------------------------------------------------|
| |
|--------------------------------------------------------------------------|
|Mineral Reserves |
|--------------------------------------------------------------------------|
|Open Pit Rolling Start Mineral Reserves (ounces) 77,460 |
|--------------------------------------------------------------------------|
|Mine Parameters |
|--------------------------------------------------------------------------|
| Ore milled |
|--------------------------------------------------------------------------|
| Mine plan tonnage (thousand tonnes) 569 |
|--------------------------------------------------------------------------|
| Mine plan grade (grams/tonne) 4.24 |
|--------------------------------------------------------------------------|
| Production rate (annualized ore tonnes per day) 550 |
|--------------------------------------------------------------------------|
| Days of operation per year 350 |
|--------------------------------------------------------------------------|
| Estimated gold mill recovery (%) 95% |
|--------------------------------------------------------------------------|
| Total gold recovered (ounces) 73,585 |
|--------------------------------------------------------------------------|
| Pre-production period (years) 0.2 |
|--------------------------------------------------------------------------|
| Rolling Start Mine life (years) 3 |
|--------------------------------------------------------------------------|
| Average annual gold production (ounces) 24,528 |
|--------------------------------------------------------------------------|
|Costs |
|--------------------------------------------------------------------------|
| Pre-production capital ($ millions) 6.7 |
|--------------------------------------------------------------------------|
| Sustaining capital and restoration ($ million) 2.89 |
|--------------------------------------------------------------------------|
| Cost per tonne milled ($/t)1 120 |
|--------------------------------------------------------------------------|
| Average total cash cost per ounce (US$/oz)2 797 |
|--------------------------------------------------------------------------|
|Financial Return |
|--------------------------------------------------------------------------|
| Payback from start of productionbefore tax (years) |
|0.56 |
|--------------------------------------------------------------------------|
| Internal Rate of Return (before tax) 169% |
|--------------------------------------------------------------------------|
| Net present value, before |
|tax, 6% discount ($ millions) |
| 24.65 |
|--------------------------------------------------------------------------|
| Payback from start of production after tax (years) 0.67 |
|--------------------------------------------------------------------------|
| Internal Rate of Return (after tax) 139% |
|--------------------------------------------------------------------------|
| Net present value, after tax, 6% discount ($ millions) 20.04 |
|--------------------------------------------------------------------------|
| |
|--------------------------------------------------------------------------|
|Note: Part of taxes will be offset by |
|past property development expenditures |
|--------------------------------------------------------------------------|
|(All dollar figures expressed in Canadian dollars, except where indicated)|
----------------------------------------------------------------------------
1) Includes 3% NSR costs
2) Does not include the 3% NSR and capex costs
Frank J. Basa, President and Chief Executive Officer on progress
thus far, "We are very pleased with the PFS on the Rolling Start.
Due to the dedication and diligence of Gold Bullion's technical
team and consultants, we have delivered this study and a PEA within
20 months of completing the last drill program and are excited to
see mining at Granada restart. This goal is consistent with our
stated strategy to create shareholder value through successful
exploration and development of brown field properties located in
the prolific and prosperous Abitibi region."
The delivery of the "Rolling Start" Preliminary Feasibility
Study completes the first stage of Gold Bullion's continuous
development program at Granada. By advancing the Granada project to
commercial production the Company has demonstrated positive
economics, environmental forethought and social gain, while
mitigating the technical, financial, and environmental risks of the
project.
As permitting and social acceptance issues could have affected
mineral reserves, the Company held 29 separate meetings prior to
PFS completion. Five were with key stakeholders and there was one
public meeting. The Company has already incorporated the majority
of the feedback, views, and recommendations from those meetings
into the PFS.
Discussions with stakeholders will continue near-term to ensure
the final Feasibility Study integrates all available input with the
goal of enhancing and maximizing economic, environmental and social
gains for all concerned parties.
Resources
In the context of re-engineering to increase the robustness of
the Granada project, Mineral resources were remodeled with mineral
zones having a minimum horizontal width of 7m down to elevation
237.5m. This resource model has been used for pit optimization and
design for the "Rolling Start" project. This model starts from the
surface and pit bottom to elevation 237.5 metres.
In order to address mining underground, mineralized zones have
been remodeled with 3 to 4 meters horizontal width below elevation
237.5 metres. Highlights include a Measured and Indicated combined
underground gold resource of 325,450 ounces of gold at an average
grade of 5.10 g/t gold plus 25,700 ounces Inferred at a grade of
7.14 g/t gold.
The details of the underground model are presented in the
following table.
------------------------------------------------------------
|Mineral Resources |Underground | | |
|----------------------------------------------------------|
| | | | |
|----------------------------------------------------------|
|Under Pit | |COG |Above 1.69 g/t |
|to Z=237.5 | | | |
|m | | | |
|----------------------------------------------------------|
|Resource Class |Tonnage |Gold|Ounces |
| | |g/t | |
|----------------------------------------------------------|
|Measured | |3.10| |
| |371,500 | | 37,000 |
|----------------------------------------------------------|
|Indicated | |3.72| |
| |462,000 | | 55,000 |
|----------------------------------------------------------|
|Measured+Indicated | |3.44| |
| |833,500 | | 92,250 |
|----------------------------------------------------------|
|Inferred | |6.85| |
| | | | |
| | 33,500 | | 7,400 |
| | | | |
|----------------------------------------------------------|
| | | | |
|----------------------------------------------------------|
|UG beneath Z=237.5 m| |COG |Above 3 g/t |
|----------------------------------------------------------|
|Resource Class |Tonnage |Gold|Ounces |
| | |g/t | |
|----------------------------------------------------------|
|Measured | |5.60| |
| |392,000 | | 70,600 |
|----------------------------------------------------------|
|Indicated | |6.66| 162,600|
| |759,000 | | |
|----------------------------------------------------------|
|Measured+Indicated | |6.30| 233,200|
| | 1,151,000 | | |
|----------------------------------------------------------|
|Inferred | |7.25| |
| | | | 18,300 |
| | 78,500 | | |
|----------------------------------------------------------|
| | | | |
|----------------------------------------------------------|
|Combined |Rounded numbers| | |
|----------------------------------------------------------|
|Resource Class |Tonnage |Gold|Ounces |
| | |g/t | |
|----------------------------------------------------------|
|Measured | |4.38| 107,600|
| |763,500 | | |
|----------------------------------------------------------|
|Indicated | |5.54| 217,600|
| | 1,221,000 | | |
|----------------------------------------------------------|
|Measured+Indicated | |5.10| 325,450|
| | 1,984,500 | | |
|----------------------------------------------------------|
|Inferred | |7.14| |
| |112,000 | | 25,700 |
------------------------------------------------------------
The mineral resources are blocks above gold cut of grade (COG),
composite and have been capped at 30 g/t for the estimation of
Mineral resources. The density to convert volume to tonnage is 2.7.
Mineral resources that are not Mineral Reserves do not have
demonstrated economic viability.
The completed version of the PFS will contain further details
and is to be provided within the next 45 days from the date of this
press release as required by NI 43-101 regulations.
Frank J. Basa, President and Chief Executive Officer on property
resources at lower grade "We have made progress from our 43-101
low-grade resource at 1 gram per tonne gold which was standing at
1.6 million ounces Measured and Indicated with 1.0 million ounces
inferred as per the November 15th, 2012 press release with a
revised resource of 934,000 ounces Measured and Indicated at 2.21
g/t gold with 627,000 ounces Inferred at 2.23 g/t gold as per the
PEA issued February 4th 2013 (effective December 21st, 2012). The
scenarios noted in the PEA was part of the optimization process,
included increasing the open-pit resource grade from 1 g/t to 2
g/t. The material is still there, however it has been reengineered
with the PFS Rolling Start to reduce risk and fast track the
project."
Qualified Persons
Claude Duplessis, P. Eng., consultant for SGS, is responsible
for validating the database and estimating the mineral resources
described herein and has reviewed and approved the contents of this
news release including after tax (relying on another expert).
Claude Duplessis is a Qualified Person and is independent of Gold
Bullion within the meaning of NI 43-101.
Jonathan Gagne, Eng., and Gaston Gagnon, Eng., mining engineers
at SGS, are responsible for the mining and economic aspects before
tax of the disclosure and have reviewed and approved the contents
of this news release. Jonathan Gagne and Gaston Gagnon are both
Qualified Persons and are independent of Gold Bullion within the
meaning of and as defined by NI 43-101 regulations.
About Gold Bullion Development Corp.
Gold Bullion Development Corp. is a TSX Venture-listed junior
natural resource company focusing on the exploration and
development of its Granada Property near Rouyn-Noranda, Quebec, and
its high grade Castle Silver Mine in Gowganda, Ontario. Additional
information on the Company's Granada gold property is available by
visiting the website at www.GoldBullionDevelopmentCorp.com and on
SEDAR.com.
"Frank J. Basa"
Frank J. Basa, P.Eng.
President and Chief Executive Officer
For further information contact:
Frank J. Basa, P. Eng., President and CEO at 1-514-397-4000.
Neither the TSX Venture Exchange nor its Regulation Service
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release. This news release may contain
forward-looking statements including but not limited to comments
regarding the timing and content of upcoming work programs,
geological interpretations, receipt of property titles, potential
mineral recovery processes, etc. Forward-looking statements address
future events and conditions and therefore, involve inherent risks
and uncertainties. Actual results may differ materially from those
currently anticipated in such statements.
SOURCE: Gold Bullion Development Corp.
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