Tepal Project Overview
Since acquiring the Tepal project in late 2009, Geologix 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 Company also completed a Preliminary Economic Assessment ("PEA") in October 2010 and a Preliminary Assessment ("PA") in April 2011. 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.
Significant highlights of the March 2013 PFS and mine plan include:
Complete details of the PFS are available in the Company's news release dated March 19, 2013.
- 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 cash costs of production, net of by-product credits, are estimated to be $170/oz. for gold or $0.62/lb. for copper.