G Mining Ventures Delivers Robust New Feasibility Study at Permitted Tocantinzinho Gold Project
February 9, 2022 TSXV:GMIN
G MINING VENTURES DELIVERS ROBUST NEW FEASIBILITY STUDY AT PERMITTED TOCANTINZINHO GOLD PROJECT
All amounts are in USD unless stated otherwise
- Feasibility Study reflects optimized development plan and current cost environment
- After-tax NPV5% of $622 million and after-tax IRR of 24% at $1,600/oz gold price
- 10.5-year mine life with average annual gold production of 174,700 ounces at AISC of $681/oz
- Years 1-5: Average annual gold production of 196,200 at AISC of $666/oz
- A 12% increase in mineral reserves to 2.0 million gold ounces
- A 7% increase in initial capital to $458 million and 44% decrease in sustaining capital to $83 million, resulting in an overall 4% decrease in LOM capital costs to $564 million
- Launch of project financing process targeting 60% to 70% from non-equity sources, with target start of construction in mid-2022
- Well-funded with $58 million of cash and $27 million of in the money warrants maturing in Q2-22i
BROSSARD, QC – February 9, 2022 - G Mining Ventures Corp. (“GMIN” or the “Corporation”) is pleased to announce the results of its 2022 Feasibility Study (the “FS” or the “Study”) for the development of its whollyowned and permitted Tocantinzinho Gold Project, located in Para State, Brazil (“TZ” or the “Project”). The Study replaces the 2019 Feasibility Study (the “2019 FS”) completed by Eldorado Gold Corporation (“ELD”), with updated mineral resource and mineral reserve estimates, re-sequenced mine plan, refined mill designs, and updated current capital and operating cost estimates.
The FS confirms robust economics for a low cost, large scale, conventional open pit mining and milling operation, with industry leading operating costs and high rate of return. The Study outlines total gold production of 1.8 million gold ounces over 10.5 years, resulting in an average annual gold production profile of 174,700 ounces with an All-In-Sustaining Cost (“AISC”) per ounce of $681. The Project after-tax net present value (“NPV”) (5% discount rate) is $622 million with an after-tax internal rate of return (“IRR”) of 24% at a gold price of $1,600 per ounce, and $833 million and 29% at a spot gold price of $1,800 per ounce.
Louis-Pierre Gignac, President & Chief Executive Officer of GMIN, commented: “The Feasibility Study builds on previous technical work while incorporating several improvements and optimizations, notably to the pit design, production schedule, process plant design and support infrastructures. The capital and operating cost estimates rely on recent budgetary quotes reflecting the current cost environment and our project execution approach. Our procurement strategy is to favor sourcing from in-country manufacturers where possible to maximize local benefits and benefit from simplified logistics. The Project provides an attractive gold production profile of approximately 175,000 ounces per year over a 10.5 year mine life, making it one of the premier gold development projects in Brazil and a key socio-economic contributor to the Tapajos Region of Para State. Factoring recent inflationary pressure seen within the industry from a new project perspective, GMIN has delivered a study that highlights a very attractive rate of return. Our experience and expertise, proven in recent successful mine developments for Newmont and Lundin Gold, will play a key role as capital is deployed to deliver on these economics.”
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Table 1: Key Economic Outputs of the Study
| Description | Units | GMIN | 2019 FS | ||
| 2022 FS | |||||
| Production Data (Operations Period) | |||||
| Mine Life | years | 10.5 | 10.0 | ||
| Average Milling Throughput | tpd | 12,587 | 11,890 | ||
| Average Milling Throughput | MMt / year | 4.6 | 4.3 | ||
| Strip Ratio | waste : ore | 3.4 | 3.7 | ||
| Pre-Strip Tonnage | Mt | 17.1 | 22.7 | ||
| Total Tonnage (exclusive of pre-strip) | Mt | 194.9 | 164.6 | ||
| Ore Tonnage Milled | Mt | 48.3 | 40.0 | ||
| Gold Head Grade | g/t | 1.31 | 1.41 | ||
| Contained Gold | koz | 2,036 | 1,817 | ||
| Recovery | % | 90.1% | 89.5% | ||
| Total Gold Production | koz | 1,834 | 1,625 | ||
| Average Annual Gold Production | koz | 175 | 163 | ||
| First Five Full Years | koz | 196 | 187 | ||
| Operating Costs (Average LOM) | |||||
| Mining Cost | USD/t mined | $2.36 | $2.77 | ||
| Mining Cost | USD/t milled | $9.51 | $11.41 | ||
| Processing Cost | USD/t milled | $8.83 | $9.03 | ||
| G&A Cost | USD/t milled | $3.13 | $2.99 | ||
| Total Site Costs | USD/t milled | $21.48 | $23.43 | ||
| Total Site Costs | USD/oz | $565 | $577 | ||
| Total Operating Costs / Cash Costs | USD/oz | $623 | $633 | ||
| AISC | USD/oz | $681 | $735 | ||
| Capital Costs | |||||
| Initial Capital | USD MM | $427 | $400 | ||
| Life of Mine Sustaining Capital | USD MM | $71 | $129 | ||
| Closure Costs | USD MM | $24 | $27 | ||
| Capital Costs before Tax | USD MM | $522 | $556 | ||
| Net Taxes Payable | USD MM | $42 | $35 | ||
| Total Capital Costs | USD MM | $564 | $590 | ||
| Financial Evaluation | |||||
| Gold Price Assumption | USD/oz | $1,600 | $1,500 | ||
| USD:BRL FX Assumption | x | 5.20 | 4.00 | ||
| After-Tax NPV 5% | USD MM | $622 | $409 | ||
| After-Tax IRR | % | 24.2% | 19.7% | ||
| Payback | Years | 3.2 | 3.4 |
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Figure 1: Average Annual Gold Production and Operating Costs
300 $1,200 Gold Recovered Total Cash Cost AISC
250 $1,000
200 $800
150 $600
206 209 100 203 $400 175 180 163 163
50 $200
- - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
Table 2: Sensitivity Analysis
| Scenario | Downside | Base Case | Spot Gold Price Case | Upside | |||
|---|---|---|---|---|---|---|---|
| Gold Price | Gold Price | ||||||
| Case | Case | ||||||
| Gold Price USD/oz | $1,400 | $1,600 | $1,800 | $2,000 | |||
| After-Tax NPV 5% USD MM | $410 | $622 | $833 | $1,044 | |||
| After-Tax IRR % | 19% | 24% | 29% | 34% | |||
| LOM Free Cash Flow USD MM | $744 | $1,043 | $1,343 | $1,642 | |||
| LOM EBITDA USD MM | $1,437 | $1,792 | $2,147 | $2,502 | |||
| Payback Years | 3.7 | 3.2 | 2.7 | 2.3 |
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FS Overview
The Corporation retained G Mining Services Inc. (“GMS”) and SRK Consulting Canada Inc. (“SRK”) as lead consultants, along with other engineering consultants, to complete the Study and prepare a technical report in compliance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).
Property Description, Location, and Access
The Project is an advanced-stage development gold project located in Pará State, Brazil, 200 km southsouthwest of the city of Itaituba, 108 km from the Moraes de Almeida district, and 1,150 km southwest of Belém, capital of Pará State. The climate in northwestern Brazil is tropical, with a rainy season from January to April and a dry season extending from June to December. The average annual precipitation is approximately 1,957 mm. The land tenure totals 99,574 hectares (996 km2) and is comprised of two mining concessions covering an area of 12,889 hectares (129 km2), 23 exploration licenses covering an area of 76,116 hectares (761 km2), and two applications for exploration licenses covering 10,569 hectares (106 km2).
The Project is accessible by road via a 72-km municipal dirt road connecting to the Transgarimpeira State Road which connects to the Federal BR-163 Cuiaba-Santarem paved highway; the dirt road was built by ELD prior to the sale of the Project. Air access is via an existing 775m long airstrip; a new 1,300m long airstrip capable of landing larger planes is planned that will be used for personnel, priority supplies, medical emergencies and exporting gold. At the Project site, there is an existing exploration camp with a capacity of about 90 beds complete with kitchen, recreation room, clinic, fuel storage, core shacks, and office space.
Figure 2: Project Location Map
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Mineral Resource Estimate
Measured and Indicated Resources (“M&I”) total 48.1 million tonnes (“Mt”) at an average gold grade of 1.36 grams per tonne (“g/t”) for 2,102,000 contained ounces of gold (inclusive of Mineral Reserves) as of December 10, 2021. Contained gold in the M&I category represents 97% of the global resource. The Mineral Resource Estimate for the Project is effectively unchanged from the estimate incorporated into the 2019 FS. SRK was commissioned to audit the mineral resource model prepared in the 2019 FS, to audit the surface garimpeiro tailings mineral resource model prepared by GMS (2021), and to assume the Qualified Person responsibility for these mineral resource models.
The mineral resource model only considers work completed by previous operators and consists of 78 core boreholes (22,134 metres) drilled during February 2004 to September 2008, and 74 core boreholes (22,030 metres) drilled during September 2008 to December 2010. In addition, some 155 tailing boreholes (1,594 metres) drilled in 2011 and 2014 were considered for the tailings mineral resource model.
Table 3: Mineral Resource Estimate
| Classification | Tonnes | Grade Gold | Contained Gold | ||||
|---|---|---|---|---|---|---|---|
| (kt) | (g/t) | (koz) | |||||
| Measured | 17,609 | 1.49 | 841 | ||||
| Indicated | 30,505 | 1.29 | 1,261 | ||||
| Total M+I | 48,114 | 1.36 | 2,102 | ||||
| Inferred | 1,580 | 0.99 | 50 | ||||
| Note: Mineral resources are not mineral reserves and have not demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimates. Assays were capped where appropriate. Open pit mineral resources are reported at a cut-off grade of 0.30 g/t gold. The cut-off grades are based on a gold price of US$1,600 per troy ounce and metallurgical recoveries of 78% for gold in saprolite rock, 90% for gold in granite fresh rock, and 82% for gold in artisanal miner tailings. Effective date of this estimate is December 10, 2021. |
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Mineral Reserve Estimate
The Project mine plan is based on Proven and Probable Mineral Reserves of 48.7 Mt at an average gold grade of 1.31 g/t for 2,042,000 contained ounces of gold as of December 10, 2021. The contained gold in the proven category represents 41% of the total ore reserve estimate, and the Mineral Reserves almost represent 100% of the Mineral Resource. The saprolite and garimpeiro tailings represent only 5% of the ore reserve contained gold (or 6% of tonnage) with the granite fresh rock being the main material type at 95% of contained gold (or 94% of tonnage).
The Proven and Probable ore reserves are inclusive of mining dilution and ore loss. The external mining dilution around the ore blocks results in a dilution tonnage of 2.6 Mt @ 0.11 g/t, entailing a mining dilution of 5.5%.
For mine planning purposes, GMS built a sub-blocked model for the tailings and the contact between the models using a SMU block size of 1 m x 1 m x 1 m and the remainder of the orebody using a SMU block size of 10 m x 10 m x 10 m in line with a bulk mining approach and appropriate to the style of mineralization.
Table 4: Mineral Reserve Estimate
| Classification | Tonnes | Grade Gold | Contained Gold | ||||
|---|---|---|---|---|---|---|---|
| (kt) | (g/t) | (koz) | |||||
| Proven | 17,973 | 1.46 | 842 | ||||
| Probable | 30,703 | 1.22 | 1,200 | ||||
| Total P&P | 48,676 | 1.31 | 2,042 | ||||
| Notes: CIM definitions were followed for mineral reserves. Mineral reserves are estimated for a gold price of $1,400/oz. Mineral reserve cut-off grade of 0.36 g/t. A dilution skin width of 1 m was considered resulting in an average mining dilution of 5.5%. Bulk density of ore is variable with an average of 2.67 t/m3. The average strip ratio is 3.4:1/ Numbers may not add due to rounding. Effective date of this estimate is December 10, 2021. |
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Production Profile
The Study outlines an average annual gold production profile of 174,700 ounces over the 10.5 years of mine life, with Year 1 as partial year considering 6 months of commercial production. Total gold production is 1,838 koz with an average gold grade milled of 1.31 g/t, and metallurgical recovery of 90%. Included in this total is 4 koz of gold recovered during pre-production with the balance of 1,834 koz during commercial production.
Figure 3: Gold Production Profile
Gold Recovered Grade Milled 1.71 300 1.80 1.58 1.51 1.48 1.60
1.33 1.33 1.29 1.29 1.40 1.19 200 1.20 1.02 1.00
0.80 0.57 206 209 100 203 0.60 175 180 163 163 137 0.40
70 0.20
0 - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year | Year | Year | Year | Year | Year | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 6 | 7 | 8 | 9 | 10 | 11 | ||||||||||||||||
| Ore Milled (kt) | 2,236 | 4,705 | 4,705 | 4,705 | 4,705 | 4,705 | 4,705 | 4,705 | 4,552 | 4,340 | 4,222 | ||||||||||
| Grade Milled (g/t) | 1.47 | 1.48 | 1.19 | 1.51 | 1.71 | 1.29 | 1.02 | 1.33 | 1.58 | 1.29 | 0.57 | ||||||||||
| Contained Gold (koz) | 106 | 224 | 180 | 228 | 258 | 196 | 154 | 201 | 232 | 180 | 78 | ||||||||||
| Recovery | 88% | 91% | 90% | 90% | 90% | 90% | 89% | 90% | 90% | 91% | 91% | ||||||||||
| Gold Recovered (koz) | 93 | 203 | 163 | 206 | 233 | 175 | 137 | 180 | 209 | 163 | 70 |
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Mining
Mining is contemplated as a conventional open pit operation using 16.5 m3 hydraulic excavators and fleet of 92 t mine trucks. A bulk mining approach is well suited for the massive ore body with mining to take place on 10 meter (“m”) high benches. The mine is planned as an owner mining operation with blasting activities to be outsourced.
The mine consists of a single open pit that will be developed in four phases, which allows for deferral of waste stripping over the mine life and maximizing mill feed grade during the earlier years with an objective of optimizing the production schedule and resulting economics.
Table 5: Mining Physicals Summary by Phase
| Summary by Mining Phase | Unit | Total | Phase 0 | Phase 1 | Phase 2 | Phase 3 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Length of Phase years | 11.0 | 1.0 | 1.3 | 3.4 | 5.3 | ||||||
| Strip Ratio W:O | 3.4 | 2.1 | 1.3 | 2.6 | 5.4 | ||||||
| Total Tonnage kt | 212,067 | 5,273 | 16,220 | 84,166 | 106,407 | ||||||
| Waste Tonnage kt | 163,391 | 3,576 | 9,135 | 60,788 | 89,891 | ||||||
| Rock Tonnage kt | 133,185 | 2,021 | 5,237 | 47,513 | 78,415 | ||||||
| Saprolite Tonnage kt | 29,715 | 1,474 | 3,644 | 13,122 | 11,475 | ||||||
| Tailings Tonnage kt | 491 | 81 | 254 | 153 | 2 | ||||||
| Ore Tonnage kt | 48,676 | 1,697 | 7,085 | 23,378 | 16,516 | ||||||
| Gold Grade g/t Au | 1.31 | 1.00 | 1.41 | 1.30 | 1.30 | ||||||
| Contained Gold koz | 2,042 | 55 | 320 | 979 | 688 |
Phase 0 Phase 1 Phase 2 Phase 3
27.5 25.9 26.0 25.0 24.8
21.4 19.6
14.9
12.0
7.0 5.3 2.7
- (Year 2) (Year 1) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
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Pre-production mining will take place over a period of two years with a total of 17.1 Mt mined, which will provide for waste fill material for construction purposes and will expose higher grade ore prior to commercial production. The ore mined during pre-production will be stockpiled. A maximum 8.9 Mt of stockpiled ore is planned at peak capacity. This material will be stockpiled to cover periods of increased stripping and to match blending requirements for the mill. At the start of commercial production, a stockpile of 4.1 Mt is planned to be available containing 165,000 gold ounces at a gold grade of 1.24 g/t.
Figure 4: Mineral Stockpile Inventory
Ore Stockpiled Grade Stockpiled 10 1.40 1.24 1.19 1.20 1.08 8 1.03 0.95 0.91 1.00 0.84 0.80 0.73 0.73 0.70 0.80 0.68 5 0.62 8.7 0.60 8.2
0.40 5.4 4.7 4.8 4.1 4.2 2 4.1 4.1 3.1 2.9 2.8 0.20
0.6
- - (Year 2) (Year 1) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
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The open pit will generate 163.4 Mt of waste rock and 48.7Mt of ore, inclusive of historic garimpeiro tailings, over the life of mine (“LOM”) for an average LOM strip ratio of 3.4:1. Mining activities are planned over a duration of 11 years which includes 2 years of pre-production mining. Once the open pit is depleted and activities are stopped, stockpile reclaim continues for another 1.5 years to feed the mill. The mining rate reaches a peak of 27.5 Mt/y in year 5 of production.
Figure 5: Annual Mine Production
Ore Tonnage Waste Tonnage Grade Mined
1.69 30 1.80 27.5 25.9 26.0 25.0 1.60 1.44 24.8 25 1.34 1.32 1.60 1.40 1.25 1.24 21.4 1.19 19.6 20 1.37 1.20 0.99 1.27 14.9 1.00 1.07 12.0 0.80
10 0.60 7.0 5.3 0.40 5 2.7 0.20
0 - (Year 2) (Year 1) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
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Processing and Recovery
TZ ore contains two types of gold associated with sulfide minerals; the first association occurs with pyrite, while the second association exists with pyrite, chalcopyrite, galena and sphalerite. The conventional process plant design for the Project is based on a robust metallurgical flowsheet to treat gold bearing ore to produce doré. The process plant is designed to nominally treat 4.34 Mt of granite ore per year and will consist of comminution, gravity concentration, gold flotation, cyanide leach and adsorption of the gold concentrate via carbon-in-leach (“CIL”), carbon elution and gold recovery circuits. CIL tailings, representing 5% of tails, will be treated in a cyanide destruction circuit and dewatered to produce a tailings slurry for storage in geomembrane lined ponds. The bulk of the tailings (95%) from the flotation circuit are inert and disposed in a separate facility.
Figure 6: Process Flowsheet
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The mill schedule includes two months of commissioning with ore with the second month planned to achieve 60% of nameplate capacity after which commercial production will be achieved with 10.5 years of operation. The peak milling capacity is 4,705 kt/y or 12,890 t/d of nominal throughput and is maintained for the first 7.5 years while softer saprolite and tailings material is available as “supplemental” mill feed at a rate of 1,000 t/d in addition to the fresh rock. Fresh rock will represent 94% of the total mill feed with saprolite and tailings representing only 6%. Mill feed will be maximized with direct feed from the pit and rehandled stockpiled material. The average annual plant head grade is detailed below in Figure 7. The combined average annual plant feed grade is 1.31 g/t Au with a maximum peak of 1.71 g/t Au in Year 5.
Figure 7: Annual Mill Production
Ore to Mill Rehandled Ore Grade Milled
1.71 9 1.80 1.58 1.51 1.48 8 1.60 1.33 1.33 1.29 7 1.29 1.40 1.19 6 1.20 1.02 5 1.00 0.4 0.2 0.7 0.8 1.0 1.2 4 0.80 0.57 2.5 2.8 2.3 3 0.60
0.8 4.3 4.3 4.2 2 4.0 3.9 0.40 3.7 3.5 1 2.2 2.0 0.20 1.8 1.9
- - Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
Table 6: Metallurgical Recoveries
| Material | Grade | Total | Mill Feed | ||||
|---|---|---|---|---|---|---|---|
| Recovery | |||||||
| Granite | 1.32 | 91% | 94% | ||||
| Saprolite | 1.03 | 71% | 3% | ||||
| Garimpeiros Tailings | 1.11 | 85% | 3% | ||||
| Total LOM | 1.31 | 90% | 100% |
Power
Power is to be supplied from the Novo Progresso substation to the south, which will require the construction of a 198km 138 kV transmission line and a substation at the site. The Installation License (“LI”) for the transmission line was granted in 2017. The new line will be parallel to the Federal highway 163 towards Moraes Almeida, then will turn west along the site access road and eventually connect to the site substation adjacent to the plant site. Average power consumption is estimated at 20 MW with a peak requirement of 24 MW. Emergency diesel generators will provide 6.2MW of backup for critical loads as required in the event of a loss of utility power. The capital cost of the transmission line is included in the FS.
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