- 52% Pre-Tax Internal Rate of Return ("IRR"), 44% After-Tax IRR
- AISC of US$829/oz Au
- Feasibility Study assumes 5,000 tonnes per day ("tpd") run-of-mine heap leach operation
- Average annual payable gold production of 31,400 oz
- Initial capital expenditure ("Capex") of US$36 Million (includes US$8 Million for EPCM, owner's, indirect costs and contingency)
- US$38 Million Pre-Tax Net Present Value ("NPV5"), US$30 Million After-Tax NPV5
- Average annual after-tax free cash flow of US$23.8 Million
- Average blended gold recovery of 85%; total cash cost of US$14/tonne treated
- Creation of approximately 140 direct jobs and 50 indirect jobs during operation
TORONTO, Nov. 10, 2022 -- Unigold Inc. ("Unigold" or the "Company") (TSX-V:UGD; OTCQX: UGDIF; FSE:UGB1) is pleased to provide results of an independent Feasibility Study ("the Study") prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") on the Company's 100% owned Candelones Oxide Project in the Dominican Republic.
Gordon Babcock, Chief Operating Officer notes: "The Feasibility Study has enhanced the economics as compared to the Company's April 2021 Preliminary Economic Assessment (PEA). While inflation did have an impact, we were able to realize savings by identifying local suppliers and contractors for many of the cost centers. The Capital and Operating costs increased 4% relative to the PEA estimates. Metallurgical recoveries increased by 10% reflecting changes in ore handling and stacking. Recovered ounces increased by 7,400 ounces relative to the PEA due to improved metallurgical recovery assumptions. The net result describes a low-cost, low impact open pit heap leach mining operation capable of producing 31,000 ounces of gold annually. Our consulting team has done an outstanding job in streamlining the design to minimize capital and operating cost increases. Our exploration drilling of the oxide resource successfully converted 93% of the 2021 inferred resource to the measured and indicated classification, facilitating conversion to proven and probable reserves.
Joseph Hamilton, Chairman and CEO of Unigold notes: "The delivery of this feasibility study is a key deliverable for the Company for 2022. The Feasibility Study met our expectations, and our team was able to deliver a low-cost starter pit with a minimal environmental footprint. The economics are compelling for a starter operation. While this study looks at Oxide production only, the integration of the larger sulphide resource into the project planning is expected to enhance the mine life and production profile. We are awaiting the approval of the Exploitation Concession application which will be required for us to get to a production decision for the Candelones Project."
This Study was prepared for Unigold by Micon International Limited and other industry consultants. The following "qualified persons" contributed to the Study, each of whom has reviewed and approved the content of this news release. The following persons are independent for the purposes of NI 43-101:
• Chris Jacobs, C.Eng., MIMMM, President & Mining Economist, Micon International Limited
• Abdoul Aziz Dramé, P.Eng., Mining Engineer, Micon International Limited
• Bill Lewis, P.Geo., Senior Geologist, Micon International Limited
• Alan J. San Martin, MAusIMM (CP), Mineral Resource Specialist, Micon International Limited
• Stuart Saich, Principal Metallurgist, Company Director, Promet 101 Consulting Pty Ltd.
• Mathew Fuller, Principal, C.P.G., P.Geo., QP, Principal, Tierra Group International Ltd.
The pertinent input parameters and results of the Candelones Oxide Study (Base Case) are presented in Table 1 to Table 4. Table 5 presents the NPV and IRR sensitivity to variability in gold price, capital cost, and operating cost.
Mineral Reserve and Resource Estimates
The oxide mineral reserves and resources for the Candelones project are summarized in Tables 6 and 7. The Study is based on the oxide mineral resources, estimated by Mr. W. Lewis, P.Geo. and Mr. A. San Martin, MAusIMM (CP) and the oxide mineral reserves, estimated by Mr. Abdoul Aziz Dramé, P.Eng. all of whom are employees of Micon. Micon is independent of Unigold and Messrs. Lewis, San Martin and Dramé each meet the requirements of a "Qualified Person" as established by NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards for Mineral Resources and Mineral Reserves (May 2014). The effective date of the mineral reserve estimate is October 7, 2022. The effective date of the mineral resource estimate is August 8, 2022. A Technical Report summarizing the estimation methodology and procedures will be published on SEDAR and the Company's website within 45 days.
Table 1: FS Summary (reported in US$)
| Total mineralized material mined (000 t) | 5,597 | |
| Total waste (000 t) | 2,232 | |
| Average grade (Au g/t) | 0.67 | |
| Total gold contained (oz) | 121,350 | |
| Total gold produced (oz) | 102,970 | |
| Average Gold recovery (%) | 85% | |
| Average annual gold produced (oz) | 31,426 | |
| Total initial Capex (US$M) | $35.9 | |
| Sustaining Capital (US$M) | $0.9 | |
| Unit Operating Cost (per tonne ore treated) | ||
| Mining (US$/t) | $4.13 | |
| Processing (US$/t) | $5.55 | |
| General & administration (US$/t) | $1.31 | |
| Refining, delivery, royalty (US$/t) | $3.18 | |
| Total operating cost per tonne treated (US$/t) | $14.17 | |
Table 2: Capital Cost Summary (US$ million)
| Capital Costs (US$M) | Pre-Production | Sustaining | Total | |||
| Mining | $1.71 | $0.94 | $2.65 | |||
| ADR Processing Plant | $9.97 | $9.97 | ||||
| Infrastructure | $16.40 | $16.40 | ||||
| EPCM, Indirects, Owners Costs | $3.72 | $3.72 | ||||
| Subtotal | $31.80 | $0.94 | $32.74 | |||
| Contingency | $4.10 | $4.10 | ||||
| Total Capital Costs | $35.90 | $0.94 | $36.84 | |||
| Closure and Rehabilitation | $0.47 | $4.66 | $5.13 | |||
Note: Totals may differ due to rounding.
Table 3: Summary Economics at US$1,650 gold per oz (US$ million) (US$M)
| LOM: Gross Revenue * (US$M) | $169.9 | |
| Minimum Tax/Royalty/Community Burdens* | $17.0 | |
| EBITDA Net Cash Operating Margin* | $90.6 | |
| Direct Taxes * | $8.8 | |
| Net Cash Flow from Operations After-Tax* | $81.8 | |
| Total Capital Cost including sustaining and closure costs* | $42.0 | |
| Net Project Cashflow after Capital recapture* | $39.8 | |
| Pre-Tax 5% NPV cash flow (US$M) | $38.2 | |
| Pre-Tax IRR | 52.4% | |
| After-Tax 5% NPV cash flow (US$M) | $30.6 | |
| After-Tax IRR | 43.6% |
* Undiscounted
Table 4: All-In Sustaining Cost (US$ million)
| Mining Cost (US$M) | $23.1 |
| Processing Cost (US$M) | $31.1 |
| General & Administrative (US$M) | $7.3 |
| Refining & Smelting (US$M) | $0.8 |
| Royalties (US$M) | 17.0 |
| Adjusted Operating Costs | $79.3 |
| Sustaining (US$M) | $0.9 |
| Closure cost (US$M) | $5.1 |
| Total (US$M) | $85.3 |
| All-in Sustaining Cost (US$/oz) | $829 |
| All-in Sustaining Costs are presented as defined by the World Gold Council Less Corporate G&A | |
Table 5: NPV & IRR Sensitivities (Base Case1 in bold): 5% Discount Rate
| 80% | 85% | 90% | 95% | 100% | 105% | 110% | 115% | 120% | ||||||||||||||||||||
| Gold Price | NPV (US$M) | $10.3 | $15.4 | $20.5 | $25.6 | $30.6 | $35.7 | $40.7 | $45.7 | $50.7 | ||||||||||||||||||
| IRR | 19.1% | 25.6% | 31.7% | 37.7% | 43.6% | 49.2% | 54.8% | 60.2% | 65.5% | |||||||||||||||||||
| Operating Cost | NPV (US$M) | $38.5 | $36.5 | $34.6 | $32.6 | $30.6 | $28.7 | $26.7 | $24.7 | $22.8 | ||||||||||||||||||
| IRR | 52.5% | 50.3% | 48.1% | 45.8% | 43.6% | 41.3% | 39.0% | 36.7% | 34.3% | |||||||||||||||||||
| Capital Cost | NPV (US$M) | $36.1 | $34.7 | $33.4 | $32.0 | $30.6 | $29.3 | $27.9 | $26.6 | $25.2 | ||||||||||||||||||
| IRR | 59.5% | 54.9% | 50.8% | 47% | 43.6% | 40.4% | 37.5% | 34.8% | 32.3% | |||||||||||||||||||
1 - Base Case: US$1,650 gold per oz; CAPEX US$35.90 Million; Operating Cost US$14.17/ tonne processed
Table 6.0 - Mineral Reserve Estimate - Candelones Oxide Project
| Mineralization Type | Category | Tonnes (x1,000) | Au g/t | Au oz | Waste/Ore Ratio |
| Oxide | Proven | 2,564 | 0.79 | 65,000 | |
| Total Proven | 2,564 | 0.79 | 65,000 | ||
| Oxide | Probable | 2,384 | 0.57 | 43,000 | |
| Transition | 649 | 0.62 | 13,000 | ||
| Total Probable | 3,033 | 0.58 | 56,000 | ||
| Total Proven + Probable | 5,597 | 0.67 | 121,000 | 0.40 | |
Table 7.0 - Mineral Resource Estimate - Candelones Oxide Project
| Mineralization Type | Category | Tonnes (x1,000) | Au g/t | Au oz | Waste/Ore Ratio |
| Oxide | Measured | 2,542 | 0.83 | 67,000 | NA |
| Oxide | Indicated | 2,483 | 0.60 | 48,000 | |
| Transition | 710 | 0.66 | 15,000 | ||
| Measured + Indicated | 5,735 | 0.71 | 130,000 | ||
| Oxide | Inferred | 1,094 | 0.43 | 15,000 | |
| Transition | 160 | 0.59 | 3,000 | ||
| Inferred | 1,255 | 0.45 | 18,000 | ||
Oxide Mineral reserves, with an Effective Date of October 7, 2022, were estimated by Mr. Abdoul Aziz Dramé, P. Eng, of Micon International Limited ("Micon") a Toronto based consulting company independent of Unigold. Mr. Dramé meets the meet the requirements of a "Qualified Person" as defined by NI 43-101. The reserve estimate is based on a long-term gold price of US$ 1650 per ounce and economic cut-off grades of 0.21 g/tonne (OXIDE) and 0.33 g/tonne (TRANSITION). Mineral reserves are reported within a final designed pit developed from an optimized pit shell. Mineral reserves assume 2.5% dilution, metallurgical recoveries of 88% (OXIDE) and 59% (TRANSITION); mining costs of USS$ 1.84 to 2.39 per tonne (WASTE), US$2.25 per tonne (OXIDE) and US$ 2.75 per tonne (TRANSITION); processing costs of US$5.56 per tonne; G&A costs of US$1.31 per tonne and selling and royalty costs of US$ 3.18 per tonne
Oxide Mineral resources, with an Effective Date of August 8, 2022, are inclusive of mineral reserves and were estimated by Mr. W. Lewis, P.Geo. and Mr. A. San Martin, MAusIMM(CP) of Micon International Limited. ("Micon"), a Toronto based consulting company, independent of Unigold. Both Mr. Lewis and Mr. San Martin meet the requirements of a "Qualified Person" as defined by NI 43-101. The estimate is based on a long-term gold price of US$1,800 per ounce; metallurgical recoveries of 88% (OXIDE) and 59% (TRANSITION); mining costs of US$2.25 per tonne (OXIDE) and US$ 2.75 per tonne (TRANSITION); processing costs of US$5.97 per tonne; G&A costs of US$1.93 per tonne. Pit constrained resources are reported within an optimized pit shell.
Micon has not identified any legal, political, environmental, or other risks that could materially affect the potential development of the mineral resource estimate.
The mineral reserve and resource estimates are classified according to the CIM Standards which define a Mineral Resource as "a concentration or occurrence of solid material of economic interest in or on the earth's crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other characteristics of a mineral resource are known, estimated, or interpreted from specific geological evidence and knowledge including sampling. Mineral resources are sub-divided, in order of increasing geological confidence, into inferred, indicated, and measured categories. An inferred mineral resource has a lower level of confidence than an indicated mineral resource. An indicated mineral resource has a higher level of confidence than an inferred mineral resource but has a lower level of confidence than a measured mineral resource."
The CIM Standards define an inferred mineral resource as: "that part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An inferred mineral resource has a lower level of confidence than that applying to an indicated mineral resource. It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated mineral resources with continued exploration." The reader is reminded that mineral resources are not mineral reserves and therefore do not have demonstrated economic viability.
Mining
The oxide mineral reserves included in the life-of-mine plan outcrop on surface and are contained within a pit with a maximum depth of approximately thirty metres. The mine has a nominal production rate of 5,000 tonnes per day. Contract mining is assumed using a local, established construction contractor in the Dominican Republic. The material is free-dig at surface.
The top 5.0 meters is expected to be sorted and the fine fraction agglomerated prior to placement on the leach pad to counter the high clay content observed near surface. The classification-agglomeration of the upper portion of the deposit was added to mitigate any potential percolation issues at the base of the heap leach pad as well as to maximize gold recovery.
Most of the oxide resource assumes a small percentage of ripping along with mechanical loading by excavator no drilling and blasting is necessary. As the pit deepens an aggressive ripping program with D8 triple shank and excavator ripper will be used to prepare the bench for loading by excavator this will occur at or near the transition ore/waste zone at the bottom of the planned pit development.
Processing
A total of 150,000 tonnes per month of material will be extracted and hauled approximately 3 km onto a Run-of-Mine heap leach pad that will follow local contours with a minimum of earthworks. Gold and silver will be recovered in an adsorption-desorption-recovery circuit and electrowinning cells, with gold room recovery and production of Dore bullion bars. Silver credits are not included in the financial modelling. No tailings facility is required. Gold recovery estimates for oxide and transition mineralization are based on a column leach test work completed at Bureau Veritas Commodities Canada Ltd. Metallurgical test laboratories, Vancouver, where preliminary results indicate 88% gold extraction in 30 days for -19 mm oxide mineralization and over 59% gold extraction in 43 days for -12.5 mm transition mineralization. This study uses a weighted average of 85% leach recovery with a 70-day leach cycle.
Surface Infrastructure and Indirect Costs
The mining and processing infrastructure will be located at the Candelones site. Site power is assumed to be supplied by generators under contract. The mine site is directly accessible by an International paved highway. No off-site infrastructure is expected to be required. Process Water is available in the immediate area. Surface water management includes ditches, ponds, and pumping stations.
Indirect costs including owner's costs, engineering, procurement and construction management, temporary facilities for construction and other related items are estimated at US$3.7 million. An additional US$4.1 million (pre-production) has been budgeted as contingency for specific direct and indirect costs.
Royalties
A 5% royalty on all metals produced from the Candelones Project is payable to the Government of the Dominican Republic and forms a minimum tax. The royalty payments are credited against the 27% tax on Net Income. A community contribution of 5% of after-tax income is also provided for within the 10% total royalty applied in this Study. The royalty calculation is believed to be a conservative estimate of the ultimate burdens.
Environment and Closure
The Candelones Project is located almost entirely on land owned by the Dominican Government. The project requires the submittal of an Environmental and Social Impact Assessment ("ESIA"). The Company will engage the Government through the Ministerio de Medio Ambiente y Recursos Naturales to develop the framework for the ESIA over the coming months. Environmental baseline data collection has been initiated and all collected baseline data will inform the ESIA, which will commence once the framework is finalized. Community consultations have started and will continue for the remainder of the year as stated by Unigold CSR onsite team. In addition to ESIA approval, the project will require permits and authorizations prior to construction and operation of the mine. Requests for these approvals will be submitted following the ESIA approval.
A closure plan for the Candelones project will be developed in consultation with the Government and the local communities as part of the ESIA. Closure costs are estimated at US$5.1 million. The objective of site closure is to return the site to a fully satisfactory state that includes eliminating all unacceptable health hazards and ensuring public safety, eliminating the production and spread of contaminants that could damage the environment and in returning the site to an environmentally sound condition without the need for maintenance or continuous monitoring.
Stakeholder Engagement
The Candelones Project is located south of the town of Restaura?ion in the northwestern Dajabon Province of the Dominican Republic, within a border area that has been designated for preferential development by the government of the Dominican Republic. Unigold has been proactive in community engagement for the past twenty years. Project consultations were initiated in 2020 and will continue thru to project initiation at a future date pending permit approval. Numerous stakeholders have expressed an interest in learning about the project. Surveys conducted by Unigold in 2020 allowed members of the community to voice concerns about water quality, land disturbance, blasting operations, dust control and impacts to wildlife. Unigold is committed to addressing concerns and continuing the dialogue with potentially affected stakeholders through the detailed engineering and environmental assessment process.
The local community has expressed strong support for the project. The main interest in the project has a focus on employment and entrepreneurial opportunities. In 2020 more than 80 community members worked at the Company's projects in the Candelones area.
About Unigold Inc. - Discovering Gold in the Caribbean
Unigold is a Canadian based mineral exploration company traded on the TSX Venture Exchange under the symbol UGD, the OTCQX exchange under the symbol UGDIF, and on the Frankfurt Stock Exchange under the symbol UGB1. The Company is focused primarily on exploring and developing its gold assets in the Dominican Republic. The Candelones oxide gold deposit is within the 100% owned Neita Fase II exploration concession located in Dajabón province, in the northwest part of the Dominican Republic. Unigold has made an application to convert part of this this exploration concession into a 9,990 Ha Exploitation Concession: "Neita Sur". Unigold made a subsequent application to renew the Exploration Concession over those areas of Neita Fase II that do not fall within the Exploitation Licence area: "Neita Norte". Both applications are pending approval by the Dominican Government. The Candelones project area is about 20 kilometers south of the town of Restaura?ion. The oxide deposit occurs at surface as a result of the tropical weathering of underlying mineralization. Unigold has been active in the Dominican Republic since 2002 and remains the most active exploration Company in the country. The Neita Fase II exploration concession is the largest single exploration concession covering volcanic rocks of the Cretaceous Tireo Formation. This island arc terrain is host to Volcanogenic Massive Sulphide deposits, Intermediate and High Sulphidation Epithermal Systems and Copper-gold porphyry systems. Unigold has identified over 20 areas within the concession area that host surface expressions of gold systems. Unigold has been concentrating on the Candelones mineralization and continues to expand the deeper sulphide resources with on-going drilling.
Forward-looking Statements
Certain statements contained in this document, including statements regarding events and financial trends that may affect our future operating results, financial position, rates of return, and cash flows, may constitute forward-looking statements within the meaning of the federal securities laws. These statements are based on our assumptions and estimates and are subject to risk and uncertainties. You can identify these forward-looking statements by the use of words like "estimate", "strategy", "expects", "plans", "believes", "will", "estimates", "intends", "projects", "goals", "targets", and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. We wish to caution you that such statements contained are just predictions or opinions and that actual events or results may differ materially. The forward-looking statements contained in this document are made as of the date hereof and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward-looking statements. Where applicable, we claim the protection of the safe harbour for forward-looking statements provided by the (United States) Private Securities Litigation Reform Act of 1995.Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
