VANCOUVER,
May 6, 2014 /PRNewswire/ - 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 production before 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 to Z=237.5 m |
|
COG |
Above 1.69 g/t |
Resource Class |
Tonnage |
Gold g/t |
Ounces |
Measured |
371,500 |
3.10 |
37,000 |
Indicated |
462,000 |
3.72 |
55,000 |
Measured+Indicated |
833,500 |
3.44 |
92,250 |
Inferred |
33,500 |
6.85 |
7,400 |
|
|
|
|
|
UG beneath Z=237.5 m |
|
COG |
Above 3 g/t |
Resource Class |
Tonnage |
Gold g/t |
Ounces |
Measured |
392,000 |
5.60 |
70,600 |
Indicated |
759,000 |
6.66 |
162,600 |
Measured+Indicated |
1,151,000 |
6.30 |
233,200 |
Inferred |
78,500 |
7.25 |
18,300 |
|
|
|
|
Combined |
Rounded numbers |
|
|
|
Resource Class |
Tonnage |
Gold g/t |
Ounces |
Measured |
763,500 |
4.38 |
107,600 |
Indicated |
1,221,000 |
5.54 |
217,600 |
Measured+Indicated |
1,984,500 |
5.10 |
325,450 |
Inferred |
112,000 |
7.14 |
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 Gagné, 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 Gagné
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, Québec, 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
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.