Newcore Gold Announces Positive Updated Preliminary Economic Assessment for the Enchi Gold Project, Ghana After-Tax NPV5% of $371 million, After-Tax IRR of 58% at $1,850/oz Gold, Average Annual Gold Production of ~120,000 ounces
NEWS RELEASE
Newcore Gold Announces Positive Updated Preliminary Economic Assessment for the Enchi Gold Project, Ghana
After-Tax NPV5% of $371 million, After-Tax IRR of 58% at $1,850/oz Gold, Average Annual Gold Production of ~120,000 ounces
April 25, 2024 TSX-V: NCAU, OTCQX: NCAUF
Vancouver, BC – Newcore Gold Ltd. ("Newcore" or the "Company") (TSX-V: NCAU, OTCQX: NCAUF) is pleased to announce positive results from the independent, updated Preliminary Economic Assessment ("PEA") completed for the Company’s 100%-owned Enchi Gold Project ("Enchi" or the "Project") in Ghana. The PEA was led by Lycopodium Minerals Canada Limited ("Lycopodium") of Toronto, Canada and provides a base case assessment of developing Enchi as a low capital intense, open pit, heap leach operation, processing 8.1 million tonnes per annum ("mtpa") utilizing contract mining. The PEA incorporated updated costing as well as development work completed on the Project since 2021 including a larger Mineral Resource Estimate completed in 2023, a significant amount of bench-scale and bulk sample metallurgical testwork and an updated environmental and social baseline study. All currencies in this news release are reported in U.S. dollars.
Highlights from the PEA at Enchi
- Strong project economics with low capital intensity.
- At a gold price of $1,850/oz: $586 million pre-tax net present value discounted at 5% ("NPV5%") and a 77% pre-tax internal rate of return ("IRR"), $371 million after-tax NPV5% and a 58% after-tax IRR.
- At a gold price of $2,350/oz: $987 million pre-tax NPV5% and a 127% pre-tax IRR, $632 million after-tax NPV5% and a 92% after-tax IRR.
- Initial capital costs estimated at $106 million (including a 20% contingency), with a short after-tax payback of 1.6 years.
- Robust production profile with a low-cost structure driven by a technically
straightforward, open pit, heap leach operation and low strip ratio.
- Average annual gold production of 121,839 ounces; peak gold production in year 6 of 155,188 ounces; 1.1 million ounces gold recovered over a 9-year life of mine ("LOM").
- LOM strip ratio of 2.67 to 1, mined grade of 0.60 g/t Au and gold recovery of 81.8%.
- LOM operating costs (1) estimated at $801/oz of gold, cash costs (2) estimated at $934/oz of gold, LOM all-in sustaining costs (AISC) (3) estimated at $1,018/oz of gold.
- Economics incorporate significant development work completed since 2021.
- The PEA incorporated the Mineral Resource Estimate completed in 2023 which reflected the addition of approximately 34,000 metres of Reverse Circulation ("RC") and diamond drilling completed in 2021 and 2022.
- Significant metallurgical testwork completed to date, highlighting the Project’s amenability to heap leach processing. Advanced metallurgical testwork consists of more than 390 tests including bottle rolls, column tests and two bulk-scale pilot heap tests.
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- Significant longer-term growth potential from the district-scale exploration
opportunity at Enchi.
- Enchi’s property covers 248 km2 along a prolific gold belt that hosts multi-million-ounce gold mines. Newcore has identified more than 20 pre-resource targets across the property and with less than 10% of the property explored. The district scale exploration opportunity at Enchi remains largely underexplored and untested.
- All deposits and targets remain open along strike and at depth, with potential for resource growth in both shallow oxides and within the sulphide mineralization.
Note: All currencies in this news release are reported in U.S. dollars unless otherwise specified. Base case parameters assume a gold price of $1,850/oz. NPV calculated as of the commencement of construction and excludes all pre- construction costs. Cash costs and AISC are non-IFRS financial measures (see cautionary language).
(1) Operating costs consist of mining costs, processing costs and mine site G&A.
(2) Cash costs consist of operating costs plus treatment and refining charges and royalties.
(3) AISC consists of cash costs plus sustaining capital (excluding closure costs).
Luke Alexander, President and CEO of Newcore stated, "The PEA confirms the opportunity at Enchi to develop an open pit, heap leach operation with robust economics. This is a notable milestone and an important step in advancing the development of our Enchi Gold Project in Ghana towards a construction decision. The PEA is a culmination of several years of de-risking work that included an updated Mineral Resource Estimate completed in 2023 and significant metallurgical testwork on the Project. Having Lycopodium on-board as the lead consultant also continues to support the development of Enchi as they are a partner of choice given their strong operational experience in West Africa. Our emphasis moving forward is to continue to drive development of the Project towards production, while not losing focus on the district scale exploration opportunity that will drive the size and scale opportunity at Enchi longerterm. The economics within the PEA support advancing Enchi towards production while also providing a strong underpinning of value for Newcore as we look to continue to unlock the Project’s significant potential."
Greg Smith, VP Exploration of Newcore stated, "We believe that longer-term the Project economics will benefit from the sizeable upside potential that exists at Enchi, with future resource expansion probable within not only the near-surface oxide and transition mineralization but also within the higher-grade structures defined at depth. The Project has substantial untapped potential, with a strategic location along a gold belt that hosts sizable mining operations. Enchi’s geological footprints align with those neighboring gold mines, with Newcore only just starting to define the potential of the Project that is reminiscent of its neighbors that began small and grew significantly over time. We look forward to continuing to prove out this potential for size and scale with an exploration focus alongside driving development of the Project going forward. As we advance Enchi with additional studies towards production, we will continue to prioritize working with our local communities to provide positive impacts, creating value for all stakeholders as we unlock the significant value potential at our Enchi Gold Project in Ghana."
The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that PEA results will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
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The PEA was prepared by Lycopodium as the lead consultant in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Lycopodium was the lead study manager and led the design parameters and cost estimates for process operations, process facilities, major equipment selection, plant site infrastructure, as well as operating and capital expenditures. The PEA was supported by Micon International Limited (mine planning and mine operations, reclamation) and SEMS Exploration (mineral resource estimates). The NI 43-101 PEA Technical Report will be filed on SEDAR+ within 45 days of this news release. All currencies are reported in U.S. dollars unless otherwise specified.
Newcore will host an investor webinar to discuss the results of the PEA on Friday, April 26, 2024 at 10am PT / 1pm ET. Details are provided at the end of this news release.
PEA Overview and Financial Analysis
The Enchi Gold Project is located in southwest Ghana, with the Project’s 248 km2 covering approximately 40 kms of Ghana’s prolific Bibiani Shear Zone, a gold belt which hosts several multi-million-ounce gold mines including Newmont’s Ahafo Mine and Asante Gold’s Bibiani and Chirano mines.
The PEA, with an effective date of April 24, 2024, contemplates an open pit, heap leach operation with a low strip ratio using contract mining and processing 8.1 mtpa (approximately 22,500 tonnes per day). The heap leach facility will be built in three phases, with excess capacity available for future expansion. Heap leach feed will be trucked from five deposits (Sewum, Boin, Nyam, Kwakyekrom, Tokosea) to a central crushing and heap leach facility which will be located between the Boin and Sewum deposits, which together host approximately 76% of the Mineral Resources currently defined at Enchi. Secondary crushing capacity is assumed to only be required once the mine plan shifts to processing transitional and fresh rock mineralization, in the second half of the mine life, reducing the upfront capital cost requirements.
Table 1 - Important Parameters of the PEA
Key Assumptions
Base Case Gold Price $1,850/oz
Production Profile
Total Tonnes Processed (mt) 69.8 Total Tonnes Waste (mt) 186.1 Strip Ratio 2.67 Heap Leach Feed Grade 0.60 g/t Au Mine Life 9 years Throughput (mtpa) 8.1 Gold Recovery 81.8% LOM Gold Production (ounces) 1,096,553 LOM Average Annual Gold Production (ounces) 121,839 Peak Gold Production in Year 6 (ounces) 155,188
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Unit Operating Costs
LOM Average Operating Costs (1) $801/oz gold LOM Average Cash Costs (2) $934/oz gold LOM AISC (Cash Costs plus Sustaining Capital) (3) $1,018/oz gold
Capital Costs
Initial Capital Cost $106 million Sustaining Capital Cost (4) $92 million Closure Cost $18 million
(1) Operating costs consist of mining costs, processing costs and mine site G&A.
(2) Cash costs consist of operating costs plus treatment and refining charges and royalties.
(3) AISC consists of cash costs plus sustaining capital (excluding closure costs).
(4) Sustaining capital cost includes $7.4 million in each of years three and six for heap leach pad expansion, as well as ~$58 million for crusher installation completed in years four and five.
Table 2 - Project Economics Summary
| $1,850/oz Gold Price | $2,350/oz Gold Price | ||||
| Pre-Tax | After-Tax | Pre-Tax | After-Tax | ||
| NPV $586 million 5% | $371 million | $987 million | $632 million | ||
| IRR 77% | 58% | 127% | 92% | ||
| Payback 1.4 years | 1.6 years | 0.8 years | 1.1 years | ||
| LOM Cash Flow $788 million | $506 million | $1,298 million | $837 million |
Chart 1 - Production and Cost Profile by Year
The financial model was completed on a 100% project basis and includes a 5% gross royalty to the Ghanaian Government and a 2% net smelter return ("NSR") royalty to Triple Flag Precious Metals Corp. The economic analysis carried out for the Project uses a cash flow model at a base gold price of $1,850 per ounce and a 5% discount rate. The financial assessment of the Project was carried out on a 100% equity basis, not accounting for potential sources of funding which may include debt. No provisions were made for the effects of inflation, and current Ghana tax
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regulations were applied to assess the tax liabilities. The Government of Ghana has the right to a 10% free carried interest in the Project.
A summary of the cash flow model can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-summary-cash-flow.pdf
Table 3 - Enchi Economic Sensitivity to Gold Price
| Gold Price (US$/oz) | $1,650 | $1,750 | $1,850 | $1,950 | $2,050 | $2,150 | $2,250 | $2,350 |
| Pre-Tax NPV 5% | $425 M | $505 M | $586 M | $666 M | $746 M | $827 M | $907 M | $987 M |
| Pre-Tax IRR | 58% | 67% | 77% | 87% | 97% | 107% | 117% | 127% |
| Pre-Tax Payback | 1.7 years | 1.5 years | 1.4 years | 1.2 years | 1.1 years | 1.0 years | 0.9 years | 0.8 years |
| After-Tax NPV 5% | $266 M | $319 M | $371 M | $423 M | $475 M | $527 M | $580 M | $632 M |
| After-Tax IRR | 44% | 51% | 58% | 65% | 72% | 78% | 85% | 92% |
| After-Tax Payback | 2.0 years | 1.8 years | 1.6 years | 1.5 years | 1.4 years | 1.3 years | 1.2 years | 1.1 years |
Chart 2 - After-Tax Economic Sensitivity to Gold Price, Operating and Capital Costs
Metallurgical Testing and Recoveries
A conceptual heap leach facility was designed, with the facility processing oxide, transition and fresh rock mineralization. The PEA utilized recoveries estimated for each material type, with 85% for oxide and transition and 75% for fresh, for an average gold recovery of 81.8%.
Determination of the appropriate recovery value was based on the significant amount of test work completed to date on each of the five existing deposits (Sewum, Boin, Nyam, Kwakyekrom, Tokosea). This testwork completed by Newcore and its predecessors dates back to 2012 and was conducted at SGS, Intertek and the University of Mines and Technology in Tarkwa (UMaT). The test programs were conducted on diamond drill holes, RC drill holes, composite samples and on trench samples covering a range of gold grades, weathering intensities and different portions of each deposit. Individual tests have consisted of a series of testwork including cyanide soluble assays, diagnostic leach, bottle rolls, column tests and two 15-tonne bulk-scale pilot heaps completed on representative samples. This testwork showed that cyanide leaching is a viable option for the extraction of gold from the oxide, transition and
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fresh domains, and this recovery rate is consistent with typical heap leach operations that have similar types of mineralization.
More than 390 tests have been completed to date. Testwork has included cyanide assays, 24-hour and 48-hour bottle rolls, gravity gold recovery, size distribution analyses, 24-hour dissolution bottle roll, diagnostic leach bottle roll, 48-hour kinetic leach bottle roll, optimized leach bottle roll, 5 to 10-day bottle roll, 30 to 90-day column tests and bulk-scale pilot heap tests. Metallurgical testwork completed to date indicates strong recoveries and the Project’s amenability to heap leach processing.
Heap leach percolation and recovery values used data from all representative column leach testwork conducted thus far for the Enchi Gold Project. Some samples reached ultimate recovery by 60-days, while others continued to progress even after 90-days.
Newcore completed two bulk-scale pilot heap tests in 2023 that continued to confirm Enchi’s strong amenability to heap leach processing. Trench samples, 15-tonnes each, from Boin and Sewum (the two largest deposits on the Project) were selected for bulk-scale pilot heap tests over a 60-day period. The samples consisted of representative oxide material with individual samples and composites covering a range of gold grades. The two composite samples underwent an agglomeration process using Portland cement. Cyanide solution at 1,000 ppm NaCN was added with 2.28 kg/t lime. The prepared agglomerates were then placed on platforms, and after a curing period of 72 hours, irrigation began and was completed for 60 days. The heap leach pad was prepared with compacted ground and impermeable clay layers, with primary berms constructed around each pad. Dripper tubes were used to distribute cyanide solution evenly. Solution samples were analyzed for gold content before and after adsorption. The pilot heap tests were aimed to simulate leaching response, showing amenability to heap leaching. Gold recovery rates for Sewum and Boin heaps increased rapidly in the first 20 days, reaching 78.6% and 73.2% respectively, then continued at a moderate pace until day 40, achieving 91.7% for Sewum and 85.6% for Boin. After 60 days, ultimate recoveries were 93.5% for Sewum and 90.3% for Boin. Two composite tailings samples were collected from each heap, averaging 0.06 grams per tonne gold ("g/t Au") and 0.12 g/t for Sewum and Boin, respectively, confirming overall recoveries of +90%.
Comminution testwork consists of 10 samples tested with Jet-Rom Engineering Ltd. in May 2023, and another 20 samples tested with Odeleb Ltd. in October 2023. Based on the data available, the oxide material is soft, and the sulphide material is competent. Given the soft nature of the oxide and transition material, this material is planned to be processed through a mineral sizer rather than a crusher. This has allowed for a delay in crushing capacity installation to year four, ahead of processing sulphide material.
Metallurgical testwork was also conducted on fresh mineralization. Bottle roll results for sulphide material from the Nyam deposit returned an average gold recovery of 79% after 48-hours, ranging from 63% to 90%. Recovery curves indicated increasing trends, with estimated final recoveries of >90% - 95% under optimized conditions. Five samples underwent diagnostic leach, yielding consistent results with total recoveries averaging 94.9%. 14 samples underwent optimization testing, incorporating finer grinding, lead nitrate addition, and oxygen introduction and total recoveries increased by an average of +10% to reach 92%. Gold mineralized samples contained no silver and low metal values.
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Additional metallurgical test work is underway as part of the ongoing work program at Enchi, including column tests to better simulate heap leach conditions and further test for optimal crushing size, reagent consumption and leach permeability. The testwork completed to date supports heap leach processing as a viable option for the extraction of gold, with moderate to high overall gold recovery expected between mid-80’s to 90%.
Mineral Processing
A process flowsheet for the Project can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-process-flow-sheet.pdf
A processing throughput of 8.1 mtpa was selected. The process design is based on a phased approach flowsheet aimed at maximizing gold recovery, and on minimizing initial capital expenditure and operating costs. The main design criteria for equipment selection included suitability for duty, reliability and ease of maintenance. The plant layout provides ease of access to all equipment for operating and maintenance requirements while facilitating ease of concurrent construction in multiple areas.
The process design consists of the following process unit operations: one primary mineral sizer to provide crushed feed with 80% passing (P80) of 40-50 mm; future installation of two trains of two-stage crushing plant to provide crushed feed with a P80 of 19 mm when harder transition and fresh feed is introduced in later years of the mine plan; agglomeration of the crushed feed with cement and cyanide solution in a rotating drum to improve percolation within the leach pad; grasshopper conveyors and radial stacker to stack crushed feed on the leach pad in 5 metre lifts; cyanide solution application on the stacked feed with a typical solution application rate of 10 L/m2/h applied during the first 40 days, reduced to 7 L/m2/h thereafter; carbon-incolumn process to load activated carbon with gold from the pregnant solution drained from the leach pad; barren, pregnant and excess solution ponds to accommodate pregnant solution drain-down and to accommodate storm water; and refining equipment to produce a final doré product.
Capital Costs
An initial capital expenditure of $106 million (including 20% contingency) has been estimated to construct the Project, with a further $92 million in sustaining capital during operations and $18 million for closure (including reclamation). The capital cost estimate is based on an open pit mining and heap leach operation processing 8.1 mtpa utilizing contract mining.
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Capital costs are detailed in the table below.
Table 4 – Capital Cost Estimate Details
| Description | Initial | Sustaining | Closure | LOM | ||
|---|---|---|---|---|---|---|
| ($M) | ($M) | ($M) | ($M) | |||
| Mining Areas & Road Development $4.2 | $4.5 | - | $8.7 | |||
| Heap Leach Facility (1) $9.9 | $14.8 | - | $24.7 | |||
| Earthworks & Pads $1.6 | - | - | $1.6 | |||
| Mechanical, Equipment & Piping $39.5 | - | - | $39.5 | |||
| Power, Electrical, Instrumentation $7.9 | - | - | $7.9 | |||
| Crusher Installation (2) - | $57.7 | - | $57.7 | |||
| EPMC (Engineering & Procurement) $9.3 | - | - | $9.3 | |||
| Construction Indirect Costs $7.8 | - | - | $7.8 | |||
| Owner’s Costs $7.8 | - | - | $7.8 | |||
| Closure Capital (3) - | - | $18.2 | $18.2 | |||
| Contingency (20.0%) $17.6 | $15.4 | - | $33.0 | |||
| Total Capital Costs $105.8 | $92.4 | $18.2 | $216.4 |
Note: numbers may not add due to rounding.
(1) The heap leach facility will be built in three phases, with excess capacity available. The sustaining capital portion includes $7.4 million in each of years three and six for the heap leach pad expansion.
(2) Crusher installation will be completed in years four and five, once required for processing fresh mineralization.
(3) Closure Capital includes environmental monitoring in the four years after production.
This capital cost estimate is based on industry standard estimates. Capital cost estimates were developed using budgetary quotes provided by contractors experienced in Ghana, as well as estimates updated to reflect current pricing since the prior PEA was completed in 2021.
Construction is estimated to be 15 months. The Enchi Gold Project benefits from relatively flat terrain (rolling hills) and standard infrastructure, limiting the amount of earthworks required. The initial capital costs reflect an estimate for the design and development of the plant and mine infrastructure that includes agglomeration, heap leaching, processing ponds and a gold recovery plant. The heap leach pads will be built in three phases, with excess capacity available. $7.4 million is estimated in each of years three and six for the heap leach pad expansion.
Crusher installation will be completed in years four and five at a total cost of approximately $58 million. The additional crushers will facilitate the transition from processing of oxide material to processing of transitional and fresh rock mineralization in the second half of the mine life.
Closure costs have been estimated based on the preliminary infrastructure plans and are inclusive of an allowance for a robust rehabilitation program and continued monitoring and care and maintenance for four years post completion of mining.
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Site Infrastructure
A proposed site plan for the Project can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-site-facility-layout.pdf
The Enchi Gold Project is located in southwest Ghana, in the Aowin district of Western Region, and is accessed from Accra on sealed roads via the regional port city of Takoradi or the mining centre of Tarkwa. From either of these centres, access to the town of Enchi (population ~15,000), the district capital, is available by paved and gravel roads. The town of Enchi is located 10 kilometres west of the Project. Fuel, accommodations, food and most supplies can be obtained in town. The region has a long history of mining, and there is a large population base of skilled and unskilled labour to draw upon for exploration, development, construction and operations.
The Project area has moderate infrastructure. A paved road crosses the central portion of the Project leading to the town of Enchi. The remainder of the Project is serviced by a series of gravel roads. As such, most infrastructure works are anticipated to be greenfields. Ghana’s current electrical generation capacity of 2,125 megawatts is made up of about 50% hydro and 50% thermal plants. Site operations are estimated to have a connected load of approximately 12 megawatts with a maximum running demand of 8 megawatts. There is a 33 kV electrical line available near the Project, located approximately 10 kilometres from the proposed plant site, with prospective options for connection routes dependent on demand and capacity required. For the PEA, the proposed electrical power supply option for the mining operations and heap leach facility will be an onsite, natural gas power station supported by back-up diesel generators.
The anticipated infrastructure for the Project includes mine dry facilities, equipment maintenance workshop, refueling facilities, explosive magazine, assay laboratory and warehouse facilities. As well as, access roads, stockpiling areas, storm water handling facilities, water supply, power supply network, diesel generators, sewage treatment plant and waste management facilities. Given the Project’s proximity to the town of Enchi, it is assumed that no onsite accommodations will be required. Accommodations for expatriate and some senior staff may be provided through rental houses in the town of Enchi.
Modern seaports at Takoradi and Tema are located 207 km and 447 km southeast of the Project, respectively, and have been used for the implementation and construction of several gold mines in recent years.
The Enchi Gold Project currently totals 248 km2 with 40 kms covering the Bibiani Shear Zone, a well-known gold belt in Ghana that hosts multi-million-ounce gold mines including Newmont’s Ahafo Mine and Asante Gold’s Bibiani and Chirano mines.
Operating Costs
The Project is modelled as a near surface, open pit, heap leach mine with heap leach feed material trucked from five deposits (Sewum, Boin, Nyam, Kwakyekrom, Tokosea) to a central crushing and heap leach facility located between Boin and Sewum.
Operating costs for the life of mine are estimated at $878 million. Cash costs over that time are estimated at $1,024 million and include operating costs, royalties and refining charges.
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A 5% royalty on revenues is due to the Government of Ghana and a 2% NSR royalty is due to Triple Flag Precious Metals Corp. Camp costs for the Enchi Gold Project are lower relative to other projects because of the Project’s proximity to the town of Enchi where most administrative facilities can be located.
Operating costs are summarized in the table below.
Table 5 – Operating Cost Estimate Details
| Operating Costs | LOM ($M) | $/tonne leached | $/oz Au | |||
|---|---|---|---|---|---|---|
| Mining $546 | $7.83 | $498 | ||||
| Processing $285 | $4.09 | $260 | ||||
| Mine Site G&A $47 | $0.67 | $43 | ||||
| Total Operating Costs $878 | $12.58 | $801 | ||||
| Treatment & Refining Charges $4 | $0.06 | $4 | ||||
| Royalties $142 | $2.03 | $129 | ||||
| Total Cash Costs $1,024 | $14.68 | $934 | ||||
| Sustaining Capital (1) $92 | $1.32 | $84 | ||||
| All-in Sustaining Costs (AISC) (2) $1,117 | $16.00 | $1,018 |
Note: numbers may not add due to rounding.
(1) Sustaining capital excludes closure costs.
(2) AISC consists of cash costs plus sustaining capital (excluding closure costs).
Mining Costs
The PEA contemplates open pit mining undertaken by a contractor. An average unit mining cost of $2.14 per tonne of material mined was used for the financial analysis ($1.70/t mined for oxide, $2.43/t mined for transition, $3.00/t mined for fresh rock) which includes the transportation of mineralized material from the pits to heap leach facility. These costs have been determined based on local contractor budgetary quotations and experience from similar sized open pit heap leach operations and local conditions. The mining costs used in financial analysis consider variations in haulage profiles throughout the life of mine.
Processing Costs
An average processing cost of $4.09 per tonne of material leached was used in the economics, based on the designed process flowsheet. This includes crushing, agglomeration, heap leach operation, recovery plant, general site maintenance and process labour.
Mine Site G&A
Mine Site G&A also includes costs related to on-site company personnel and mineral tenure fees. An annual total of $180,000 has also been allocated for corporate and social responsibility.
Mineral Resources
The 2024 PEA incorporates the Mineral Resource Estimate completed in 2023 (see news release dated March 7, 2023). The 2023 Resource incorporated approximately 34,000 metres
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of additional infill and resource expansion RC and diamond drilling completed by Newcore between January 2021 and July 2022. The Mineral Resource has an effective date of January 25, 2023, is reported using a constraining resource pit at a gold price of $1,650 per ounce. Indicated Mineral Resource of 743,500 ounces of gold at an average grade of 0.55 g/t Au and totalling 41,736,000 tonnes; and Inferred Mineral Resource of 972,000 ounces of gold at an average grade of 0.65 g/t Au and totalling 46,556,000 tonnes.
Table 6 - Mineral Resource Estimate for the Enchi Gold Project (1)
| Zone | Classification | Tonnes | Au Grade (g/t) | Contained Au (ounces) |
|---|---|---|---|---|
| Sewum | Indicated | 20,925,000 | 0.48 | 323,300 |
| Inferred | 21,798,000 | 0.53 | 373,100 | |
| Boin | Indicated | 13,020,000 | 0.62 | 258,200 |
| Inferred | 15,884,000 | 0.68 | 349,600 | |
| Nyam | Indicated | 7,791,000 | 0.65 | 162,000 |
| Inferred | 2,681,000 | 1.21 | 104,700 | |
| Kwakyekrom | Inferred | 4,244,000 | 0.72 | 97,700 |
| Tokosea | Inferred | 1,949,000 | 0.75 | 46,900 |
| Total Indicated | 41,736,000 | 0.55 | 743,500 |
| Total Inferred | 46,556,000 | 0.65 | 972,000 |
(1) Notes for Mineral Resource Estimate:
1. Canadian Institute of Mining Metallurgy and Petroleum ("CIM") definition standards were followed for the resource estimate.
2. The 2023 resource models used ordinary kriging (OK) grade estimation within a three-dimensional block model with mineralized zones defined by wireframed solids and constrained by pits shell for Sewum, Boin and Nyam. Kwakyekrom and Tokosea used Inverse Distance squared (ID2).
3. Open pit cut-off grades varied from 0.14 g/t to 0.25 g/t Au based on mining and processing costs as well as the recoveries in different weathered material.
4. Heap leach cut-off grade varied from 0.14 g/t to 0.19 g/t in the pit shell and 1.50 g/t for underground based on mining costs, metallurgical recovery, milling costs and G&A costs.
5. CIL cut off grade varied from 0.25 g/t to 0.27 g/t in a pit shell and 1.50 g/t for underground based on mining costs, metallurgical recovery, milling costs and G&A costs.
6. A $1,650/ounce gold price was used to determine the cut-off grade.
7. Metallurgical recoveries have been applied to five individual deposits and in each case three material types (oxide, transition and fresh rock).
8. A density of 2.19 g/cm3 for oxide, 2.45 g/cm3 for transition and 2.72 g/cm3 for fresh rock was applied.
9. Optimization pit slope angles varied based on the rock types.
10. Reasonable mining shapes constrain the deeper mineral resource in close proximity to the pit shell.
11. Mineral Resources that are not mineral reserves do not have economic viability. Numbers may not add due to rounding.
12. The Mineral Resource Estimate is from the technical report titled "Mineral Resource Estimate for the Enchi Gold Project" with an effective date of January 25, 2023, which was prepared for Newcore by Todd McCracken, P. Geo, of BBA E&C Inc. and Simon Meadows Smith, P. Geo, of SEMS Exploration Services Ltd. in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects and is available under Newcore’s SEDAR+ profile at www.sedarplus.ca. Todd McCracken and Simon Meadows Smith are independent qualified persons ("QP") as defined by National Instrument 43-101. Simon Meadows Smith, P. Geo, of SEMS Exploration Services Ltd. is responsible for the Mineral Resource Estimate in the updated NI 43-101 PEA Technical Report to be filed on SEDAR+ within 45 days of this news release.
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The 2023 Mineral Resource Estimate was reviewed by SEMS Exploration as part of the PEA. The database used to determine the Mineral Resource Estimate consists of 169,857 metres of diamond drill, RC, rotary-air blast and trenches. The resource estimate is based on the combination of geological modeling, geostatistics and conventional block modeling using the Ordinary Krig methodology of grade interpolation for Sewum, Boin and Nyam. Kwakyekrom and Tokosea used Inverse Distanced squared. The mineral resources were estimated using a block model with parent blocks of 10m x 10m x 10m with sub-blocks to 2.5m x 2.5m x 2.5m. A capping study was made using histograms, probability plots, quantile plots and deciles plots to define the capping values resulting in variable capping values by deposit and zone.
The resource includes five deposits Sewum, Boin, Nyam, Kwakyekrom and Tokosea, each of which is open along strike and down dip. Several additional exploration targets have also been identified outside of the existing resource area at Enchi that present an opportunity for significant resource growth longer-term across the district scale property.
Mining and Production Schedule
A summary of the production schedule can be viewed at the following link:
https://newcoregold.com/site/assets/files/5847/2024_04-ncau-pea-nr-summary-production-profile.pdf
A three-dimensional mining block model was created from the mineral resource block model for each deposit. Pit optimizations were conducted using Datamine software, which runs a pseudoflow algorithm to determine a series of optimum pit shells for a range of revenue factors.
Mining would occur in a series of nine open pits across the five deposits with depths ranging from approximately 20 to 200 metres. The open pit parameters utilized for the PEA include 10 metre bench heights, overall slope angles ranging from 28 to 43 degrees for oxide / transition material and 46 to 50 degrees for fresh rock, haul roads / ramp widths of 30 metres at a 10% maximum gradient. The table below presents the subset of mineral resources within the pit shells.
Table 7 – Subset of Mineral Resources Within the PEA and Strip Ratios (1)
| Deposit | Tonnes (Mt) | Grade | Average | Gold Produced | Strip Ratio | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (g/t Au) | Recovery (%) | (ozs) (2) | |||||||||
| Sewum 36.6 | 0.52 | 82.1% | 499,768 | 1.80:1 | |||||||
| Boin 20.8 | 0.72 | 81.6% | 389,405 | 3.68:1 | |||||||
| Nyam 8.3 | 0.65 | 81.5% | 141,141 | 3.21:1 | |||||||
| Kwakyekrom 3.1 | 0.56 | 80.0% | 44,119 | 2.72:1 | |||||||
| Tokosea 1.1 | 0.79 | 82.5% | 22,119 | 8.49:1 | |||||||
| Enchi Project | 69.8 | 0.60 | 81.8% | 1,096,553 | 2.67:1 |
Note: numbers may not add due to rounding.
(1) Including mining losses of 3% and no mining dilution.
(2) Payable ounces of gold produced.
The mine plan was prepared using pit tonnages and grades exported from Hexagon’s Mine Sight 3D (MS3D) mine planning suite. The mine plan resulted in a nine-year mine life which delivers approximately 70 Mt of mineralized material with an average grade of 0.60 g/t Au to
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