“…Whilst the Feasibility Study on the Hosco deposit generates a positive return at three-year trailing average gold prices, we believe that it is prudent, in terms of capital allocation, to defer development and permitting of the Hosco deposit and continue to pursue exploration of these areas, which if successful, could lead to a staged and perhaps more financially beneficial development strategy at Joanna.”
“The opportunity at Heva lies in the fact that our early drilling is indicating higher grade ore potential than at Hosco and initial metallurgy has returned very good gold recoveries using conventional cyanidation,” continued George Paspalas. “The Hosco West Extension area has identified refractory mineralization that is significantly higher grade than the average grade in the conceptual Hosco pit. The Company intends to spend an additional $4.2 million to continue the drilling in these areas. We remain committed to growing the Company by pursuing opportunities that would be accretive to shareholder value.”
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Project Highlights Assumptions Gold Price (US$/ounce) 1,350 Foreign exchange rate (C$/ US$) 1:1 Fuel price ($/litre) 0.90 Net Smelter Royalty (%) 2.0 Mineral Reserves Proven and Probable in-pit Reserves (Million ounces) 1.66 Mine Parameters Ore milled Mine plan tonnage (Million tonnes) 41.1 Mine plan grade (grams/tonne) 1.26 Strip ratio (waste: ore) 4.49:1 Average daily production rate (tonnes) 8,500 Estimated gold recovery (%) 87.5 Total recovered gold (Million ounces) 1.45 Pre-production period, post permitting (years) 1.7 Mine life (years) 13.4 Average annual gold production (ounces) 110,000 Costs Pre-production capital ($ Million) 422.2 Sustaining capital and restoration ($ Million) 97.3 Cost per tonne milled ($) 25.32 Average operating cash cost (US$/ounce) 716 Royalties (US$/ounce) 30 Average total cash cost (US$/ounce) 746 Financial Analysis Average annual cash flow pre-tax (years 2 – 13)($ Million) 61.7 Payback period (years) 8.2 IRR pre-tax (%) 8.7 IRR after-tax (%) 6.5 NPV 5% discount pre-tax ($ Million) 111.6
