{"id":46057,"date":"2020-07-15T15:40:00","date_gmt":"2020-07-15T15:40:00","guid":{"rendered":"https:\/\/icrowdnewswire.com\/?p=2654448"},"modified":"2020-07-15T15:40:00","modified_gmt":"2020-07-15T15:40:00","slug":"alamos-gold-announces-phase-iii-expansion-of-island-gold-to-2000-tpd","status":"publish","type":"post","link":"https:\/\/ipsnews.net\/business\/2020\/07\/15\/alamos-gold-announces-phase-iii-expansion-of-island-gold-to-2000-tpd\/","title":{"rendered":"Alamos Gold Announces Phase III Expansion of Island Gold to 2,000 tpd"},"content":{"rendered":"![\"\"](\"https:\/\/icrowdnewswire.com\/wp-content\/uploads\/2020\/07\/4000-alamos-logo.png\")
<\/p>\n
Alamos Gold Inc.<\/strong> reported results of the positive Phase III Expansion Study conducted on its Island Gold mine, located in Ontario, Canada. Based on the results of the study, the Company is proceeding with an expansion of the operation to 2,000 tonnes per day (“tpd”) (“Shaft Expansion”). This follows a detailed evaluation of several scenarios which demonstrated the Shaft Expansion as the best option, having the strongest economics, being the most efficient and productive scenario, and the best positioned to capitalize on further growth in Mineral Reserves and Resources. All amounts are in United States dollars, unless otherwise stated. <\/p>\nPhase III Expansion Study Highlights – Shaft Expansion<\/strong><\/p>\n\n- Average annual gold production of 236,000 ounces per year<\/strong> starting in 2025 upon completion of the shaft. This represents a 72% increase from the mid-point of previously issued 2020 production guidance<\/li>\n
- Industry low average total cash costs of $403 per ounce of gold and mine-site all-in sustaining costs of $534 per ounce<\/strong> starting in 2025, a 19% and 30% decrease from the mid-point of previously issued 2020 guidance, respectively<\/li>\n
- After-tax net present value (“NPV”) of $1.02 billion<\/strong> at a 5% discount rate and an after-tax internal rate of return (“IRR”) of 17%, using a base case gold price assumption of $1,450 per ounce and a USD\/CAD foreign exchange rate of $0.75:1<\/li>\n
- After-tax NPV of $1.45 billion and an after-tax IRR of 22%<\/strong>, at a 5% discount rate using a gold price assumption of $1,750 per ounce and a USD\/CAD foreign exchange rate of $0.75:1<\/li>\n
- Mine life of 16 years, double the current eight year Mineral Reserve life. <\/strong>This is based on a mineable Mineral Resource of 9.6 million tonnes grading 10.45 grams per tonne of gold (“g\/t Au”) containing 3.2 million ounces of gold<\/li>\n
- Lowest combined capital and operating costs of all scenarios evaluated. <\/strong>Total life of mine capital of $1,066 million including sustaining capital. Higher life-of-mine growth capital of $514 million with the Shaft Expansion is more than offset by the lowest sustaining capital and operating costs of all scenarios evaluated.<\/li>\n<\/ul>\n
“Island Gold has been a tremendous acquisition for Alamos Gold. We acquired Island Gold in 2017 at a cost of approximately $600 million when it had 1.8 million ounces of Mineral Reserves and Resources. This high-grade deposit has more than doubled to 3.7 million ounces and we expect further growth yet. The Phase III Expansion Study showcases the growing value of Island Gold. Already one of the most profitable mines in Canada, the expansion will increase production, lower costs, and make this operation even more profitable. The expansion will also best position the operation to benefit from additional exploration success,” said John A. McCluskey, President and Chief Executive Officer. <\/p>\n
\n\n\nPhase III Expansion Study Highlights –<\/strong>
Shaft Expansion<\/strong><\/td>\nLife of Mine<\/strong>
(starting January 2020)<\/strong><\/td>\nPost Completion of Shaft (2025+)<\/strong><\/td>\n<\/tr>\n\nProduction<\/strong><\/td>\n| <\/td>\n | <\/td>\n<\/tr>\n | \n| Mine life (years)<\/td>\n | <\/td>\n | 16<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Total gold production (000 ounces)<\/td>\n | <\/td>\n | 3,104<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Average annual gold production (000 ounces)<\/td>\n | <\/td>\n | 201<\/td>\n | <\/td>\n | <\/td>\n | 236<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Total mill feed (000 tonnes)<\/td>\n | <\/td>\n | 9,572<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Average gold grade (grams per tonne)<\/td>\n | <\/td>\n | 10.45<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Recovery (%)<\/td>\n | <\/td>\n | 96.5<\/td>\n | %<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Average mill throughput (tpd)<\/td>\n | <\/td>\n | 1,700<\/td>\n | <\/td>\n | <\/td>\n | 2,000<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nOperating Costs<\/strong><\/td>\n| <\/td>\n | <\/td>\n<\/tr>\n | \nTotal cost per tonne of mill feed1 <\/sup>(C$)<\/td>\n| $<\/td>\n | 182<\/td>\n | <\/td>\n | $<\/td>\n | 178<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nTotal cash cost (per ounce sold)2<\/sup><\/td>\n| $<\/td>\n | 422<\/td>\n | <\/td>\n | $<\/td>\n | 403<\/td>\n<\/tr>\n | \nMine-site all-in sustaining cost (per ounce sold)2<\/sup><\/td>\n| $<\/td>\n | 598<\/td>\n | <\/td>\n | $<\/td>\n | 534<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nCapital Costs (millions)<\/strong><\/td>\n| <\/td>\n | <\/td>\n<\/tr>\n | \n| Growth (project) capital expenditure<\/td>\n | $<\/td>\n | 514<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Sustaining capital expenditure<\/td>\n | $<\/td>\n | 552<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Total capital expenditure<\/td>\n | $<\/td>\n | 1,066<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nBase Case Economic Analysis<\/strong><\/td>\n| <\/td>\n | <\/td>\n<\/tr>\n | \nIRR vs current 1,200 tpd operation (after-tax)3<\/sup><\/td>\n| <\/td>\n | 17<\/td>\n | %<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| NPV @ 0% discount rate (millions, after-tax)<\/td>\n | $<\/td>\n | 1,659<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| NPV @ 5% discount rate (millions, after-tax)<\/td>\n | $<\/td>\n | 1,019<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Gold price assumption (average, per ounce sold)<\/td>\n | $<\/td>\n | 1,450<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Exchange Rate (US Dollar\/Canadian Dollar)<\/td>\n | <\/td>\n | 0.75<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \nEconomic Analysis at $1,750 per ounce Gold Price<\/strong><\/td>\n| <\/td>\n | <\/td>\n<\/tr>\n | \nIRR vs current 1,200 tpd operation (after-tax)3<\/sup><\/td>\n| <\/td>\n | 22<\/td>\n | %<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| NPV @ 0% discount rate (millions, after-tax)<\/td>\n | $<\/td>\n | 2,280<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| NPV @ 5% discount rate (millions, after-tax)<\/td>\n | $<\/td>\n | 1,450<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Gold price assumption (average, per ounce sold)<\/td>\n | $<\/td>\n | 1,750<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Exchange Rate (US Dollar\/Canadian Dollar)<\/td>\n | <\/td>\n | 0.75<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n- Total unit cost per tonne (“t”) of ore includes royalties and silver as a by-product credit<\/li>\n
- Total cash costs and mine-site all-in sustaining costs include royalties and silver as a by-product credit<\/li>\n
- The IRR is calculated on the differential after-tax cash flow between the Shaft Expansion scenario and continuing to mine at 1,200 tpd with ramp access and with a paste fill plant<\/li>\n<\/ol>\n
Mineable Resource<\/strong><\/p>\nA Mineable Resource totaling 9.6 million tonnes, grading 10.45 g\/t Au containing 3.2 million ounces of gold has been included in the Phase III Expansion Study. This incorporates Mineral Reserves and approximately 80% of Measured and Indicated and Inferred Mineral Resources as of December 31, 2019. Mineral Resources included in the study had stoping outlines applied and then were assigned Island Gold’s standard zonal dilution and recovery rates. Stopes were evaluated against applicable cut-off grades and a mine design and sequence was generated. The inclusion of 80% of the Mineral Resource is consistent with the historical conversion rate of Inferred Mineral Resource to Mineral Reserve which has averaged 83% since 2016. This also reflects the high degree of confidence in the quality of the Mineral Resource which is part of the same structure as Mineral Reserves with a consistent style of mineralization.<\/p>\n Mineable Resource as of December 31, 2019<\/strong><\/p>\n\n\n\n| <\/td>\n | December 31, 2019<\/strong><\/td>\nUndiluted Resource Used in Phase III Study<\/strong><\/td>\nDiluted & Recovered Resource Used in Phase III Study<\/strong><\/td>\n<\/tr>\n\n <\/strong><\/td>\nTonnes (000)<\/strong><\/td>\nGrade<\/strong>
(g\/t Au)<\/strong><\/td>\nOunces<\/strong>
(000)<\/strong><\/td>\nTonnes (000)<\/strong><\/td>\nGrade<\/strong>
(g\/t Au)<\/strong><\/td>\nOunces<\/strong>
(000)<\/strong><\/td>\nTonnes (000)<\/strong><\/td>\nGrade<\/strong>
(g\/t Au)<\/strong><\/td>\nOunces<\/strong>
(000)<\/strong><\/td>\n<\/tr>\n\nMineral Reserves<\/strong><\/td>\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Proven<\/td>\n | 786<\/td>\n | 13.48<\/td>\n | 341<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 786<\/td>\n | 13.48<\/td>\n | 341<\/td>\n<\/tr>\n | \n| Probable<\/td>\n | 2,857<\/td>\n | 9.52<\/td>\n | 874<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 2,857<\/td>\n | 9.52<\/td>\n | 874<\/td>\n<\/tr>\n | \n| Total Reserves<\/td>\n | 3,643<\/td>\n | 10.37<\/td>\n | 1,215<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | 3,643<\/td>\n | 10.37<\/td>\n | 1,215<\/td>\n<\/tr>\n | \nMineral Resources<\/strong><\/td>\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| Measured<\/td>\n | 25<\/td>\n | 4.52<\/td>\n | 4<\/td>\n | 21<\/td>\n | 4.52<\/td>\n | 3<\/td>\n | 24<\/td>\n | 3.85<\/td>\n | 3<\/td>\n<\/tr>\n | \n| Indicated<\/td>\n | 853<\/td>\n | 6.57<\/td>\n | 180<\/td>\n | 724<\/td>\n | 6.57<\/td>\n | 153<\/td>\n | 807<\/td>\n | 5.60<\/td>\n | 145<\/td>\n<\/tr>\n | \n| Total Measured & Indicated<\/td>\n | 879<\/td>\n | 6.51<\/td>\n | 184<\/td>\n | 746<\/td>\n | 6.51<\/td>\n | 156<\/td>\n | 831<\/td>\n | 5.55<\/td>\n | 148<\/td>\n<\/tr>\n | \n| Inferred<\/td>\n | 5,392<\/td>\n | 13.26<\/td>\n | 2,298<\/td>\n | 4,576<\/td>\n | 13.26<\/td>\n | 1,950<\/td>\n | 5,099<\/td>\n | 11.30<\/td>\n | 1,853<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | Phase III Mill Feed<\/strong><\/td>\n9,572<\/strong><\/td>\n10.45<\/strong><\/td>\n3,216<\/strong><\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Economic Analysis<\/strong><\/p>\nThe Shaft Expansion to 2,000 tpd has an estimated base case after-tax NPV of $1.02 billion and after-tax IRR of 17% using a 5% discount rate and assuming a gold price of $1,450 per ounce and USD\/CAD foreign exchange rate of $0.75:1.<\/p>\n Assuming a $1,750 per ounce gold price, the after-tax NPV increases to $1.45 billion and after-tax IRR increases to 22%. The mine plan, operating parameters and capital estimates incorporated in the study are effective January 1, 2020. The project economics are sensitive to metal price assumptions and input costs as detailed in the tables below.<\/p>\n Shaft Expansion After-Tax NPV (5%) Sensitivity ($ Millions)<\/strong><\/p>\n\n\n\n <\/strong><\/td>\n| <\/td>\n | -10%<\/strong><\/td>\n| <\/td>\n | <\/td>\n | -5%<\/strong><\/td>\n| <\/td>\n | Base Case<\/strong><\/td>\n| <\/td>\n | 5<\/strong>%<\/strong><\/td>\n| <\/td>\n | <\/td>\n | 10<\/strong>%<\/strong><\/td>\n| <\/td>\n<\/tr>\n | \n| Gold Price<\/td>\n | $<\/td>\n | 808<\/td>\n | <\/td>\n | $<\/td>\n | 914<\/td>\n | <\/td>\n | $<\/strong><\/td>\n1,019<\/strong><\/td>\n| $<\/td>\n | 1,124<\/td>\n | <\/td>\n | $<\/td>\n | 1,228<\/td>\n | <\/td>\n<\/tr>\n | \n| Canadian Dollar<\/td>\n | $<\/td>\n | 1,127<\/td>\n | <\/td>\n | $<\/td>\n | 1,073<\/td>\n | <\/td>\n | $<\/strong><\/td>\n1,019<\/strong><\/td>\n| $<\/td>\n | 964<\/td>\n | <\/td>\n | $<\/td>\n | 910<\/td>\n | <\/td>\n<\/tr>\n | \n| Capital Costs<\/td>\n | $<\/td>\n | 1,083<\/td>\n | <\/td>\n | $<\/td>\n | 1,051<\/td>\n | <\/td>\n | $<\/strong><\/td>\n1,019<\/strong><\/td>\n| $<\/td>\n | 988<\/td>\n | <\/td>\n | $<\/td>\n | 954<\/td>\n | <\/td>\n<\/tr>\n | \n| Operating Costs<\/td>\n | $<\/td>\n | 1,077<\/td>\n | <\/td>\n | $<\/td>\n | 1,048<\/td>\n | <\/td>\n | $<\/strong><\/td>\n1,019<\/strong><\/td>\n| $<\/td>\n | 991<\/td>\n | <\/td>\n | $<\/td>\n | 961<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Shaft Expansion After-Tax NPV (5%) and IRR Sensitivity to Gold Price<\/strong><\/p>\n\n\n\nGold Price<\/strong><\/td>\nAfter-Tax NPV5%<\/sup> ($M)<\/strong><\/td>\nAfter-Tax IRR (%)<\/strong><\/td>\n<\/tr>\n\n| $1,250<\/td>\n | $727<\/td>\n | 14%<\/td>\n<\/tr>\n | \n| $1,350<\/td>\n | $874<\/td>\n | 16%<\/td>\n<\/tr>\n | \n$<\/strong>1,450<\/strong><\/td>\n$<\/strong>1,019<\/strong><\/td>\n17<\/strong>%<\/strong><\/td>\n<\/tr>\n\n| $1,550<\/td>\n | $1,164<\/td>\n | 19%<\/td>\n<\/tr>\n | \n| $1,650<\/td>\n | $1,308<\/td>\n | 20%<\/td>\n<\/tr>\n | \n| $1,750<\/td>\n | $1,450<\/td>\n | 22%<\/td>\n<\/tr>\n | \n| $1,850<\/td>\n | $1,593<\/td>\n | 24%<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Phase III Expansion Scenarios Evaluated<\/strong><\/p>\nFive scenarios were evaluated as part of the Phase III Expansion Study as follows:<\/p>\n \n- Ramp 1,200 tpd (current base case operation with no paste plant);<\/li>\n
- Ramp 1,200 tpd (R1200);<\/li>\n
- Ramp Expansion to 1,600 tpd (R1600);<\/li>\n
- Shaft Expansion to 1,600 tpd (S1600); and<\/li>\n
- Shaft Expansion to 2,000 tpd (S2000). <\/li>\n<\/ul>\n
With the exception of the first scenario (maintaining the current operation) all of the other scenarios included the addition of a paste plant. Detailed mine plans were created for all scenarios with multiple optimizations for each. Design engineering and costing for each scenario were completed to pre-feasibility level. Costing was based on first principles and with a high degree of confidence given existing operating experience.<\/p>\n Phase III Shaft Expansion Overview<\/strong><\/p>\nThe Phase III Expansion of Island Gold to 2,000 tpd from a current rate of approximately 1,200 tpd will involve various infrastructure investments. These include the installation of a shaft, paste plant, and an expansion of the mill and tailings facility. Following the completion of the shaft construction in 2025, the operation will transition from trucking ore and waste to skipping ore and waste to surface through the new shaft infrastructure, driving production higher and costs significantly lower.<\/p>\n Mining<\/strong><\/p>\nLong-hole open stoping will continue to be utilized as the primary mining method; however, increased development and key infrastructure changes including the addition of a paste plant and shaft will allow for mining rates to increase to 2,000 tpd.<\/p>\n Shaft<\/em><\/p>\nA 5.0 metre diameter concrete lined shaft will be constructed with a steel head frame. The shaft will house two 12 tonne skips in dedicated compartments for ore and waste movement, and a double-deck service cage for the transport of personnel and materials. The shaft will be sunk to an initial depth of 1,373 metres. The hoisting plant is designed for an ultimate depth of 2,000 metres providing flexibility to accommodate future exploration success. At the initial depth of 1,373 metres, the shaft has a capacity of 4,500 tpd, more than sufficient to accommodate the peak mining rates of 3,300 tpd (ore & waste).<\/p>\n A conventional blind sink methodology will be utilized providing improved schedule reliability with minimal impact on existing operations. A combined raise-bore from the 840 metre level, and blind sink option below the 840 metre level was evaluated; however, this option would significantly impact existing operations. The cuttings from the raise bore in the upper mine, and waste generated from the conventional sink in the lower mine would displace underground throughput capacity and significantly reduce mining rates below 1,200 tpd by as much as 400 tpd over the next several years.<\/p>\n The underground ore and waste handling and loading pocket will be a conventional configuration similar to that of Young-Davidson. Once skipped to surface, ore will be trucked to the expanded mill circuit.<\/p>\n Ventilation requirements under the Shaft Expansion are lower than under the ramp scenarios given the significantly smaller mobile fleet allowing the shaft to serve as the only new required fresh air source. The total construction capital for the shaft installation including all supporting infrastructure is $232 million4<\/sup>.<\/p>\nPaste plant<\/em><\/p>\nWith the exception of the current base case operation, the addition of a paste plant was included in all scenarios for a number of reasons, principally the high project returns with an after-tax IRR of 32%. The addition of paste fill underground will allow for faster stope cycling, thereby supporting higher mining rates and providing increased geotechnical stability. It will also increase mining recovery resulting in an additional 100,000 ounces of gold recovered over the life of mine, an in-situ value of $145 million at a gold price of $1,450 per ounce. Further, 56% of tailings will be placed underground reducing tailings dam raise requirements, a capital savings of $13 million.<\/p>\n The paste plant will have a capacity of 2,000 tpd and capital cost of $34 million4<\/sup> with the plant expected to be completed in the fourth quarter of 2023.<\/p>\nMobile fleet<\/em><\/p>\nMining rates are expected to ramp up to 2,000 tpd following the completion of the shaft in 2025. This will be supported by a significantly smaller mobile fleet than required under the ramp scenarios. Post completion of the shaft, a total of five haul trucks will be required to support a mining rate of 2,000 tpd. This compares to a peak of 18 haul trucks required to sustain ramp haulage at 1,200 tpd and 25 haul trucks for ramp haulage at 1,600 tpd. This contributes to the lower ventilation requirements with the Shaft Expansion, and significantly lower diesel usage and green house gas emissions.<\/p>\n Processing and Infrastructure<\/strong><\/p>\nThe expanded mill will be a conventional milling operation with a nominal capacity of 2,000 tpd, up from approximately 1,200 tpd currently. The expansion will include upgrading the crushing circuit, adding a second parallel ball mill, and a new elution and carbon in pulp (“CIP”) circuit with carbon screens. The total cost of the mill expansion is $40 million4<\/sup>.<\/p>\nThe flow sheet of the new circuit includes upgrades and expansions for the following major process operations:<\/p>\n \n- New vibratory grizzly feeder;<\/li>\n
- New primary crusher;<\/li>\n
- New fine ore stockpile and conveyors;<\/li>\n
- Additional primary ball mill;<\/li>\n
- Primary Ball Mill screen for both ball mill circuits;<\/li>\n
- Existing thickener converted to high-rate thickener;<\/li>\n
- Two additional leach tanks;<\/li>\n
- New elution plant and kiln (ADR); and<\/li>\n
- Tailing pumps.<\/li>\n<\/ul>\n
Mill recoveries are expected to average 96.5% over the life of mine, consistent with the historical performance of the existing operation.<\/p>\n To accommodate the increased electricity requirements with the larger mill and shaft, the power line to site will be upgraded at a cost of $14 million. The same power line upgrade is required under all scenarios including maintaining the existing operating rates of 1,200 tpd. This reflects increased ventilation requirements with the ramp scenarios as mining progresses deeper.<\/p>\n An expansion of the existing tailings impoundment area is underway and required under all scenarios to accommodate the growth in the deposit over the last several years. With two planned future raises beyond 2020 and the addition of the paste plant, the tailings facility has sufficient capacity to accommodate existing Mineral Reserves and Resources.<\/p>\n Operating Costs<\/strong><\/p>\nTotal cash costs are expected to average $403 per ounce and mine-site all-in sustaining costs $534 per ounce following the completion of the shaft construction in 2025. These represent a 19% and 30% decrease from the mid-point of previous 2020 guidance, respectively. These are also the lowest costs of any scenario evaluated reflecting the significant productivity improvements, decreased ventilation requirements, increased automation, and higher throughput rates associated with the shaft.<\/p>\n Total life of mine operating costs of $1,310 million with the Shaft Expansion are significantly lower than all the other scenarios evaluated. This includes continuing ramp access mining at the current rate of 1,200 tpd which carried total operating costs of $1,648 million. The lower operating costs more than offset the higher capital such that total combined life of mine operating costs and capital with the Shaft Expansion are the lowest of any scenario.<\/p>\n Total operating costs are expected to average C$178 per tonne of mill feed post completion of the project. This includes average mining costs of C$96 per tonne. Both are the lowest of any scenario evaluated. This becomes even more significant as mining moves deeper with unit mining costs remaining relatively stable under the Shaft Expansion, while steadily increasing with the ramp scenarios.<\/p>\n The breakdown of unit costs is summarized as follows.<\/p>\n \n\n\n <\/strong><\/td>\nLife of mine<\/strong><\/td>\nPost project (2025)<\/strong><\/td>\nTotal LOM<\/strong><\/td>\n<\/tr>\n\nOperating Cost1<\/sup><\/strong><\/td>\nC$\/t Processed<\/strong><\/td>\nC$\/t Processed<\/strong><\/td>\nC$M<\/strong><\/td>\n<\/tr>\n\n| Mining<\/td>\n | $<\/td>\n | 98<\/td>\n | $<\/td>\n | 96<\/td>\n | $<\/td>\n | 936<\/td>\n<\/tr>\n | \n| Processing<\/td>\n | $<\/td>\n | 31<\/td>\n | $<\/td>\n | 31<\/td>\n | $<\/td>\n | 300<\/td>\n<\/tr>\n | \n| General and Administration<\/td>\n | $<\/td>\n | 39<\/td>\n | $<\/td>\n | 37<\/td>\n | $<\/td>\n | 377<\/td>\n<\/tr>\n | \n| Royalties<\/td>\n | $<\/td>\n | 15<\/td>\n | $<\/td>\n | 15<\/td>\n | $<\/td>\n | 146<\/td>\n<\/tr>\n | \n| Silver Credit<\/td>\n | -$<\/td>\n | 1<\/td>\n | -$<\/td>\n | 1<\/td>\n | -$<\/td>\n | 12<\/td>\n<\/tr>\n | \nTotal Operating Costs<\/strong><\/td>\n$<\/strong><\/td>\n182<\/strong><\/td>\n$<\/strong><\/td>\n178<\/strong><\/td>\n$<\/strong><\/td>\n1,747<\/strong><\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Royalty<\/strong><\/p>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |