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Tepal Project

Tepal Project Overview

Since acquiring the Tepal project in late 2009, ValOro has carried out aggressive exploration, resource expansion, and infill drilling programs through to the end of 2011, totaling 56,810 metres of drilling in 292 holes. This drilling has allowed the Company to achieve significant increases in resources for both the North and South Zones, to add the resources of the Tizate Zone and to place a high percentage of mineral resources from all of the zones into the Measured and Indicated categories. The largest drilling program, in 2011, consisting of 41,284 metres of drilling in 215 holes, allowed for the most recent resource estimate for the project, which was prepared by Micon International Ltd. The estimate was released in March 2012, and included all project drilling data from the North, South, and Tizate zones up to December 2011.

In March 2013, the Company announced the positive results of a Pre-Feasibility Study ("PFS") prepared by JDS Energy & Mining Inc. The results were based on the March 2012 Micon resource report.

A link to the full March 2013 Tepal PFS report is provided on the website home page.

Significant highlights of the March 2013 PFS and mine plan include:

  • The Project's estimated post-tax NPV, at a 5% discount, is $421 million with an IRR of 28%.
  • The Project's estimated pre-tax NPV, at a 0% discount, is $925 million with an IRR of 36%
  • The Project's estimated payback period is 2.7 years pre-tax and 3.2 years post-tax.
  • Pre-production capital costs for the Project are estimated to be $354 million.
  • The Project is expected to produce an average of 117,000 ounces of gold and 49 million pounds of copper annually over its initial seven years of operation.
  • The Project has an estimated mine life of 11.5 years, and an average milling rate of 38,700 tonnes per day.
  • Life of mine all-in sustaining cash costs of production, net of by-product credits, as per World Gold Council Standards are estimated to be $290/oz. for gold or $0.89/lb. for copper.

In January, 2017 ValOro announced the Tepal Preliminary Economic Assessment (“PEA”) using reduced metal prices from the PFS and redesigning the mine plan to a more efficient and smaller throughput of 22,000 tonnes per day. The PEA used US$1,250/Oz. Gold Price and US$2.50/LB Copper Price resulting in a US$169M After-Tax NPV (5%) and 24% IRR. The initial capex was reduced 40% to  US$214M:

  • Pre-tax: NPV5% of $299 million and 36% IRR with a 1.6-year payback period
  • After-tax: NPV5% of $169 million and 24% IRR with a 2.3-year payback period
  • Production averages 79,000 oz. of gold and 32 Mlbs of copper over a 10-year mine life
  • Life of mine (“LOM”) average cash cost of $313/oz. gold and LOM average cash cost plus sustaining cost of $396/oz. gold (net of copper and silver by-product credits)
  • Initial capital costs estimated at $214 million with a 2-year pre-production period
  • LOM sustaining and closure capital costs estimated at $87 million

Up to 2013, the primary focus of the company was to expand the resource and complete both the PFS and permit the project through submittal of a MIA, which was successfully done.  During 2017 and 2018, Valoro determined that it was an opportune time to review all of the data collected on the project and develop an exploration plan based on first principles. This has been completed and awaits funding availability for a drill program.