Abcourt releases a Positive Preliminary Economic Assessment for its Sleeping Giant Gold Project
ROUYN-NORANDA, June 07, 2023 - Abcourt Mines Inc. ("Abcourt" or the "Corporation") (TSX Venture: ABI) is pleased to announce the positive results of an independent Preliminary Economic Assessment ("PEA") prepared in accordance with NI 43-101 for the Sleeping Giant Project, a wholly owned high-grade gold deposit located in the greenstone belt of Abitibi, 80 km north of the town of Amos, Quebec.
PEA Highlights*
| Base Case Scenario?: Gold Price : 1800 $ US/oz, Exchange Rate : 1.00 USD = 1.30 CAD, Discount Rate : 5 % | |
| 54.4 |
| 33.3 |
| 42.0 |
| 30,100 |
| 96.7 |
| 8.10 |
| 5.8 |
| 720,200 |
| 181,300 |
| 1,120 |
| 321 |
| 424 |
| 178 |
| 1.5 |
Pascal Hamelin, President and CEO, comments: "The PEA results released today are excellent with an NPV5% of 54 M CAD and an IRR of 33%. The results of the PEA are based on a mineral resource produced in accordance with current CIM standards and guidelines. The PEA envisions a rapid start-up of operations with minimal initial investment. This project could quickly become the next gold producer in Quebec. Targeted drilling towards areas with inferred mineral resources could potentially increase resources and some project economics. The PEA is considering 50% utilization of our ore processing plant. This new drilling could potentially increase feed capacity and operate the plant at full capacity. This capacity could also allow us to accept material from other deposits such as Discovery and Flordin in the medium term, and potentially increase the value of our assets. The next step is to now target promising areas to convert inferred to indicated resources for incorporation into a more detailed economic assessment. With the potential to add other deposits to the project, we anticipate strong economic potential for the region around the Sleeping Giant plant in the future."
*The reader is advised that the PEA summarized in this press release is intended only to provide a high-level initial review of the project's potential and design options. The PEA's mine plan and economic model includes numerous assumptions and the use of inferred mineral resources. Inferred Mineral Resources are considered too speculative to be used in economic analysis, except as permitted by NI 43-101 in PEA studies. There is no guarantee that Inferred Mineral Resources can be converted to Indicated or Measured Mineral Resources and, therefore, there is no guarantee that the economics of the project described herein will be realized.
Table 1 : PEA Summary
| Total Tonnes Extracted (t) | 720,200 |
| Average Extracted Grade (g/t) | 8.10 |
| Total Gold Contained (oz) | 187,600 |
| Total Gold Produced (oz) | 181,300 |
| Total Payable Gold (oz) | 180,800 |
| Net Mill Recovery (%) | 96.7 |
| Average Annual Production (oz/an) | 30,100 |
| Initial Capital (M CAD) | 42.0 |
| Sustaining Capital (M CAD) | 31.8 |
| Reclamation and Closure Cost1 (M CAD) | 6.7 |
| Total Unit Operating Cost (CAD/t milled) | 320.67 |
| Cash Cost per ounce (USD/oz) | 1 008.82 |
1 : Including the closure bond held by the MRNF presently at 5.4 M$
Opportunities to increase Project Value
The Sleeping Giant Project has strong potential for mineral resource expansion based on more than 800 mineralized structures remaining open at depth, down plunge and to the east. Future modeling could offer an increase in the potential of the project. In addition, with a utilization of nearly 50% of its capacity, the current ore processing plant has excess capacity which could offer the opportunity to accept material from deposits surrounding the Sleeping Giant Project. The contribution of other deposits could positively influence the economics of the PEA. Moreover, Abcourt owns several deposits with mineral resources within a radius of less than 200 km from the Sleeping Giant project, including the Discovery, Flordin and Pershing-Manitou deposits.
Table 2 : Summary of Economic Parameters (1,800 USD/ounce of gold)
| After-tax NPV5% (M CAD) | 54.4 |
| After-tax IRR (%) | 33.3 |
| Payback Period after tax (years) | 2.2 |
| Operating Cashflow (M CAD) | 177.9 |
| Cashflow before tax (M CAD) | 104.1 |
| Yearly averaged Cashflow before tax (M CAD) | 26.6 |
| Income tax (M CAD) | 29.0 |
| Cashflow after tax (M CAD) | 75.0 |
| Discount Rate (%) | 5.0 |
| NPV5% before tax (M CAD) | 77.5 |
| IRR before tax (%) | 41.1 |
| Payback Period before tax (years) | 2.1 |
Summary of the Capital and Operating Expenses
Table 3 : Summary of Capital Expenses
| Capital Expenses1 (M CAD) | Initial Capital Costs | Sustaining Capital Costs | Total Capital Costs |
| Capitalized Net Revenue2 | (18.65) | 0.00 | (18.65) |
| Capitalized Operating Expenses | 27.12 | 0.00 | 27.12 |
| Underground Development | 10.48 | 18.22 | 28.71 |
| Infrastructures | 5.83 | 0.18 | 6.01 |
| Equipments Upgrade | 6.67 | 0.00 | 6.67 |
| Electrical Circuit | 6.40 | 0.00 | 6.40 |
| Tailing Facilities | 4.15 | 6.74 | 10.89 |
| Closure and Reclamation | 0.00 | 6.69 | 6.69 |
| Total | 42.00 | 31.83 | 73.83 |
| Capital Cost per ounce (USD/oz) | 111.60 | ||
| Operating Cost per ounce (USD/oz) | 1 008.82 | ||
| All-In Sustaining Cost (Capital and Operating) (USD/oz) | 1 120.43 | ||
1 : The total can vary due to rounding.
2 : The Corporation expects revenues during the preproduction period.
3 : Net amount including the closure bond currently deposited with the MRNF for 5.4 M$.
Table 4 : Summary of the Operating Expenses
| Unit Operating Costs | CAD/t milled |
| Mining Extraction | 226.24 |
| Technical Services | 28.90 |
| Milling | 47.17 |
| Environment | 1.76 |
| Administration and general Expenses | 17.01 |
| Total Unit Operating cost | 320.67 |
A sensitivity analysis was performed to validate the impact on NPV5% and IRR, before and after tax by varying the gold price and capital costs. The results of the analysis are shown in Tables 5 and 6 below; the base case is in bold in the tables. Note that a sensitivity analysis was also carried out on revenues and operating costs. The results of this evaluation can be found in the PEA.
Table 5 : Sensitivity to Gold Price
| Before Taxes | After Taxes | |||||||||
| (US$/oz) | NPV5% (M CAD) | IRR (%) | NPV5% (M CAD) | IRR (%) | ||||||
| 1 550 | $30.1 | 21% | $22.6 | 18% | ||||||
| 1 600 | $39.6 | 25% | $30.4 | 21% | ||||||
| 1 650 | $49.1 | 29% | $36.6 | 25% | ||||||
| 1 700 | $58.6 | 33% | $42.5 | 28% | ||||||
| 1 750 | $68.1 | 37% | $48.4 | 30% | ||||||
| 1 800 | $77.5 | 41% | $54.4 | 33% | ||||||
| 1 850 | $87.0 | 45% | $60.2 | 36% | ||||||
| 1 900 | $96.5 | 48% | $66.1 | 39% | ||||||
| 1 950 | $106.0 | 52% | $72.0 | 42% | ||||||
| 2 000 | $115.5 | 55% | $77.9 | 44% | ||||||
| 2 050 | $124.9 | 59% | $83.8 | 47% | ||||||
Table 6 : Sensitivity to Capital Costs
| Before Taxes | After Taxes | ||||||||||
| (%) | NPV5% (M CAD) | IRR (%) | NPV5% (M CAD) | IRR (%) | |||||||
| -50 | % | $107.4 | 72% | $75.4 | 60% | ||||||
| -40 | % | $101.4 | 64% | $71.2 | 53% | ||||||
| -30 | % | $95.4 | 57% | $67.0 | 47% | ||||||
| -20 | % | $89.5 | 51% | $62.8 | 42% | ||||||
| -10 | % | $83.5 | 46% | $58.6 | 37% | ||||||
| 0 | % | $77.5 | 41% | $54.4 | 33% | ||||||
| 10 | % | $71.6 | 37% | $50.1 | 30% | ||||||
| 20 | % | $65.6 | 33% | $45.9 | 27% | ||||||
| 30 | % | $59.6 | 30% | $41.7 | 24% | ||||||
| 40 | % | $53.7 | 27% | $37.5 | 21% | ||||||
| 50 | % | $47.7 | 24% | $33.3 | 19% | ||||||
Mineral Resources
Table 7 : Mineral Resources Estimate
| Mining Method (Cut-off Grade) | Indicated Resources | Inferred Resources | ||||
| Metric Tonnes (t) | Grade (g/t Au) | Troy Ounces (oz Au) | Metric Tonnes (t) | Grade (g/t Au) | Troy Ounces (oz Au) | |
| Potential Long Hole (4.25 g/t Au) | 677,000 | 7.03 | 153,000 | 677,000 | 8.13 | 177,000 |
| Potential Room & Pillar (5.0 g/t Au) | 78,000 | 7.98 | 20,000 | 207,000 | 10.67 | 71,000 |
| Total | 755,000 | 7.14 | 173,300 | 884,000 | 8.74 | 248,300 |
Notes on Mineral Resource Estimates:
- The independent and qualified persons, as defined by NI 43-101 are Olivier Vadnais-Leblanc, P. Geo. and Eric Lecomte, ing, all from InnovExplo Inc. The effective date is December 12, 2022.
- These mineral resources are not mineral reserves because they do not have demonstrated economic viability. The results are presented undiluted and are considered to have reasonable prospects of economic viability. The 2022 MRE follows the CIM Standards.
- The estimate encompasses 846 mineralized lenses that were modelled using a minimal geological width of 0.5m using Genesis software.
- A density value of 2.85 g/cm3 (based on measurements and mine et mill reconciliation) was assigned to all mineralized zones.
- High-grade capping supported by statistical analysis was done on composites data and established at 95 g/t Au for all mineralized zones. Composites (0.5 m) were calculated within the zones using the grade of the adjacent material when assayed or a value of zero when not assayed.
- The exigence of a Reasonable Prospect of Eventual Economical Extraction is fulfilled by the use of cut-off grades based on reasonable mining parameters and locally constrained within Deswik Stope Optimizer shapes using a minimal mining width of 1.7 m for both potential methods. It is reported at a rounded cut-off grade of 4.25 g/t Au using the long-holes (LH) method, and 5.0 g/t Au, using the Room and Pillars (R&P) method. The cut-off grades were calculated using the following parameters: mining cost = C$213.96/t (LH) to C$261.56/t (R&P); processing cost = C$35.10/t; G&A = C$22.09/t; gold price = US$1,650.00/oz and USD:CAD exchange rate = 1.30. The cut-off grades should be re-evaluated in light of future prevailing market conditions (metal prices, exchange rates, mining costs etc.).
- The estimate was completed using a sub-block model in Surpac 2022. A 4m x 4m x 4m parent block size was used (1m x 1m x 1m sub-blocked). Grade interpolation was obtained by Inverse Distance Squared (ID2) using hard boundaries.
- The mineral resource estimate is classified as Indicated and Inferred. The Inferred category is defined with a minimum of three (3) drill holes within the areas where the drill spacing is less than 75 m and shows reasonable geological and grade continuity. The Indicated mineral resource category is defined with a minimum of four (4) drill holes within the areas where the drill spacing is less than 30 m and shows reasonable geological and grade continuity.
- The number of metric tonnes was rounded to the nearest hundred, following the recommendations in NI 43-101 and any discrepancies in the totals are due to rounding effects. The metal contents are presented in troy ounces (tonnes x grade / 31.10348) rounded to the nearest hundred.
- The independent and qualified persons for the 2022 MRE are not aware of any known environmental, permitting, legal, political, title-related, taxation, socio-political, or marketing issues that could materially affect the Mineral Resource Estimate.
PEA Detail
Mining Extraction
The Sleeping Giant project is an underground mine that was operated until 2014. The operation extended from the N-55 level to the N-1060 level. The mineralization consists of numerous veins of gold. The mining plan consists of extracting 720,000 tonnes of ore, including new stopes that can be accessed almost exclusively from existing levels. Production is split between levels N-145 and N-1110 and will require rehabilitation of the drifts, escapeway, shaft service compartment and existing infrastructure. The stopes will be mined by the longhole, Shrinkage, and room-and-pillar methods with a tonnage distribution of 27%, 30% and 43%, respectively.
At full production, daily production will reach 350 tpd on 10-hour shifts on a continuous 7-day rotation. The preproduction period will span a period of one and a half years. The mining methods were established according to the geometry, in particular the dip, of the various stopes. For the long hole method, the sub-levels are distributed at an interval of 15 vertical meters. For the rooms and pillars method, the pillars left in place have an area of 3 m x 3 m, while the rooms have a maximum width of 6.0 m.
Abcourt currently owns the fleet of production equipment needed to carry out the production plan (cavo, rail loaders, various drills, etc.). A complete reconditioning of the equipment was considered to ensure optimal operation at the start of the work. Surface infrastructure remains unchanged; the ore being processed on site with the existing plant.
Mineral Processing
The Sleeping Giant concentrator processed ore from the Sleeping Giant mine from 1988 until 2014 and subsequently processed ore from adjacent mines from 2016 until 2022.
The concentrator process consists of ore crushing by a jaw crusher and two cone crushers in a closed circuit with a screen, primary grinding by a rod mill followed by secondary grinding by two ball mills in a closed circuit with cyclones. Cyclone overflow feeds a thickener and subsequently a pre-aeration tank, two leach tanks and four carbon-in-leach (CIL) tanks for a leach time of 46 hours. Lead nitrate is added to the grinding circuit to improve leaching. Once loaded with gold, the carbon is pumped from the CIL to be screened and eluted. The stock solution is directed to the gold room for electrolysis, sludge drying and ingot casting.
The concentrator has a capacity between 700 and 750 tpd. It will be operated 12 hours a day for a daily production of 350 t/d.
Surface Infrastructures and Tailing Facility
A site visit was carried out in order to validate the condition of the various surface and underground equipment as well as the surface infrastructures. This made it possible to estimate all the repair needed for a return to production of the site. Overall, the process plant, headframe, hoist buildings and other surface infrastructure were found to be in good condition. However, at the processing plant, an upgrade will be necessary for conveyors, crushing units, tanks and silos. Existing buildings and access roads are well maintained and capable of supporting activities related to a resumption of mining operations.
To facilitate an effective workforce management system, on-site accommodation and catering facilities have been provided for workers on rotation. These will constitute the main infrastructure investment required for the project. In total, an investment of $4.6 million is planned for the repair and construction of surface infrastructure, including drinking water and wastewater services.
An amount of $6.4 million is planned for the project for the reconditioning of the entire electrical network, including the modification of the arrival of the 25 kV electrical line from Hydro-Québec in order to include the various modules associated with the accommodation.
Underground, the mine dewatering system is currently in operation and all levels are accessible. Investments in piping will have to be made over time to ensure the continuity of operations. The emergency generator, which is mainly used for dewatering, must be upgraded. Communication systems are functional. In total, the reconditioning of surface and underground equipment is estimated at $6,7 million, including an amount of $4.3 million for process plant equipment.
For the mine tailing facility, certain work will have to be carried out in order to be able to store the mine tailings generated by the 720,000 t of ore milled in the concentrator. It is expected that cells 1 and 2A currently in place will be able to accommodate the tailings generated by the concentrator following dike raising and dredging work during the project. Cell 2 will continue to serve as a water recirculation basin towards the processing plant, while Cell 3 will serve as a polishing basin. The treatment of the tailing's mine waters before their discharge into the environment will be carried out in a manner similar to that of the last years of operation of the site. In total, an amount of $10.9 million is planned for the development of the tailing facility.
Environment and Restoration Plan
The project is located in the southern part of the territory of the Regional Government of Eeyou Istchee James Bay. The regional government is responsible for the management of these lands, which are public lands in the domain of the State.
The current project is considered an existing mine, and not subject to the environmental and social impact assessment and review procedure. The activities that will be carried out fall within the framework of the Environment Quality Act and the Regulation respecting the regulatory scheme applying to activities on the basis of their environmental impact.
Abcourt currently has most of the certificates of authorization allowing it to mine and process the ore. However, a request for modification of certain existing authorizations will have to be presented concerning work related to drinking water, wastewater treatment and the tailing facility.
Restoration costs for the Sleeping Giant Mine have been estimated at $12.1 million, taking into account the dismantling of surface facilities, including new accommodation facilities, water management infrastructure and the restoration of the tailing facility. The restoration work is planned to take place over 2 years.
Royalties
A 2.0% royalty was applied to the Sleeping Giant project on all ounces of gold produced.
Qualified Persons
This PEA was prepared for Abcourt Mines Inc. by InnovExplo Inc. and other industry consultants, all Qualified Persons (QPs) under NI 43-101. The QPs have reviewed and approved the contents of this press release. The affiliation and areas of responsibility of each qualified person involved in the preparation of the Sleeping Giant PEA are listed below.
| Mr. Olivier Vadnais-Leblanc, géo | (InnovExplo Inc.) |
| Mr. Eric Lecomte, ing. | (InnovExplo Inc.) |
| Mr. Guy Comeau, ing. | (Soutex) |
| Mr. Luc Boutin, ing. | (WSP) |
| Mr. Marc L'Écuyer, ing. | (Englobe) |
| Mr. Jacques Blanchet, ing., M.Sc. | (Englobe) |
| InnovExplo Inc. |
|
| Soutex |
|
| WSP |
|
| Englobe |
|
Mr. Pascal Hamelin, ing, President and Chief Executive Officer of Abcourt, has verified and approved the technical information contained in this press release.
ABOUT ABCOURT MINES INC.
Abcourt Mines Inc. is a Canadian exploration corporation with strategically located properties in northwestern Québec, Canada. Abcourt owns the Sleeping Giant mill and mine where it concentrates its development activities.
ABOUT INNOVEXPLO INC.
InnovExplo Inc. is a consulting firm offering services in mining exploration, mining geology, mineral resources, mining engineering, environment, and sustainable development. Since its founding in 2003, InnovExplo Inc. has worked on 450 different mandates for 170 junior mining exploration and producing companies. The firm has produced more than 300 geological or engineering reports for projects affecting almost all the spheres of activity of a mining project, from exploration to operation, including mainly the drafting of technical reports in accordance with the Regulation 43-101.
ABOUT WSP
One of the largest professional services firms in the world, WSP mission is to shape the future of our cities and our environment. To this end, we provide strategic consulting, engineering and design services to our clients in the transport, infrastructure, environment, building, energy, water and utilities sectors. mines. Our 66,000 trusted professionals share the common goal of having a positive and lasting impact on the communities we serve, through a culture of innovation, integrity and inclusion. Science and sustainability guide all of our work. In 2022, WSP derived more than half of its CA$11.9 billion in revenue from services that positively impact the environment and support the United Nations Sustainable Development Goals (SDGs). The Company's shares are listed on the Toronto Stock Exchange (TSX: WSP). To learn more, visit https://www.wsp.com/en-GL
ABOUT SOUTEX
Soutex is a mineral processing and metallurgy consulting firm that offers specialized process services. Founded in 2000 and with offices in Canada (Quebec and Longueuil) and Germany (Munich), Soutex includes more than 35 metallurgists, process engineers and technicians. Soutex offers an excellent combination of specialists with experience in plant operations, engineering, technical services, and training.
ABOUT ENGLOBE
Englobe is a Canadian leader in the fields of geotechnics, environment, engineering, soil and biomass treatment, as well as in asset quality and integrity management. As a provider of specialized services in these different spheres, Englobe develops infrastructures for multiple clients in the private (industrial, mining sectors) and public sectors in Canada and elsewhere in the world.
For further information, please visit our website at www.abcourt.com and consult our filings under Abcourt's profile on www.sedar.com, or contact:
| Pascal Hamelin President and CEO T: (819) 768-2857 E: phamelin@abcourt.com | Dany Cenac Robert, Investor Relations Reseau ProMarket Inc., T: (514) 722-2276, post 456 E: dany.cenac-robert@reseaupromarket.com |
FORWARD-LOOKING INFORMATION
Certain information contained herein may constitute "forward-looking information" under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "seeks", "expects", "estimates", "intends", "anticipates", "believes", "could", "might", "likely" or variations of such words, or statements that certain actions, events or results "may", "will", "could", "would", "might", "will be taken", "occur", "be achieved" or other similar expressions. Forward-looking statements are based on Abcourt's estimates and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Abcourt to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Forward-looking statements are subject to business and economic factors and uncertainties, and other factors that could cause actual results to differ materially from these forward-looking statements, including the relevant assumptions and risks factors set out in Abcourt's public documents, available on SEDAR at www.sedar.com. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Although Abcourt believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements and forward-looking information. Except where required by applicable law, Abcourt disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
The TSX Venture Exchange and its regulatory service provider (as defined in the policies of the TSX Venture Exchange) assume no responsibility for the adequacy or accuracy of this press release.
