Login ID:
Password:
Partner Login
Contact Us : 7066511911

PRESS RELEASE: Maritime's Prefeasibility Study on the Hammerdown Gold Mine Returns an IRR of 46.8% and NPV (8%) of $71.2M

2 Mar 2017 11:02 am

Dow Jones received a payment from EQS/DGAP to publish this press release.
 
 
 DGAP-News: Maritime Resources Corp. / Key word(s): Miscellaneous 
Maritime's Prefeasibility Study on the Hammerdown Gold Mine Returns an IRR 
of 46.8% and NPV (8%) of $71.2M 
 
2017-03-02 / 12:02 
The issuer is solely responsible for the content of this announcement. 
 
Vancouver, British Columbia--(Newsfile Corp. - March 2, 2017) - Maritime 
Resources Corp. (TSXV: MAE) ('Maritime') is pleased to announce that they 
have completed the Prefeasibility Engineering Study and Economic Assessment 
('PFS' or 'Study') aimed to reopen the past producing Hammerdown gold 
project in Newfoundland and Labrador, Canada. 
 
The PFS was evaluated on the Measured & Indicated NI43-101 mineral resource 
estimate for the past producing Hammerdown gold deposit. The study was 
completed by WSP Canada Inc. ('WSP'), an independent third party 
engineering firm, with the mandate to evaluate the potential of bringing 
the past producing gold mine back into commercial production. 
 
The Study was successful in demonstrating a viable mining operation with 
low upfront capital and short time line to the start of gold production. 
The engineering design optimizes a small foot print within the historical 
mine area as well as utilizing some of the existing underground 
infrastructure where possible. The operation is schedule to run at a 
capacity of approximately 400 metric tons per day ('mtpd') over a five-year 
mine life. 
 
The results show positive economics, strong internal rate of return, short 
payback period and significant cash flow under reasonable commodity price 
assumptions. The pre-tax operating cash cost to produce an ounce of gold is 
$558 CDN with an all in pre-tax-cost (including capital, sustaining capital 
and operating cost) of $955 CDN per ounce of gold. 
 
In addition, there remain numerous opportunities for improvement to reduce 
the planned development and capital costs. Maritime will continue to 
evaluate these opportunities with a goal to fully optimize the returns from 
the mining operation. 
 
PRE-FEASIBILY STUDY ('PFS') HIGHLIGHTS 
 
(All currency is expressed in Canadian dollars ($CA) unless otherwise 
noted.) 
 
- 
 
Project Pre-tax net present value ('NPV8%') of $71.2 million with an 
IRR of 46.8% per cent. 
 
- 
 
Project after-tax net present value ('NPV8%') of $44.2 million with an 
internal rate of return ('IRR') of 34.8% 
 
- 
 
Net pre-tax cash flow of $104 million, undiscounted. Net after-tax cash 
flow of $69 million, undiscounted. 
 
- 
 
Total Development and Capital Cost Estimate for the five-year life of 
mine of $67.8 million, 
 
- 
 
Mine Development Capital of -$16.8 million 
 
- 
 
Equipment Capital of - $10.6 million 
 
- 
 
Infrastructure Capital of - $13.0 million 
 
- 
 
Sustaining Capital - $12.9 million 
 
- 
 
Indirect costs of - $ 7.3 million 
 
- 
 
Contingency of - $7.2 million 
 
- 
 
Mine life for the current plan at Hammerdown is five years, producing 
approximately 174,000 ounces at an average of approximately 35,000 
ounces per year. Basic assumptions used for the compilation of this 
PFS: 
 
- 
 
Gold Price of US$ 1,250 per ounce 
 
- 
 
Exchange Rate of 0.8 US$ : 1 CA$ (or 1 US$ : 1.25 CA$) 
 
- 
 
Project discount rate of 8% 
 
- 
 
Mill recovery of 97% based on the historic treatment of the ore at 
the nearby Nugget Pond Gold Mill from 2000 to 2004. 
 
Doug Fulcher, President and CEO of Maritime commented: 
 
'We are pleased with the results of the PFS as it demonstrates that the 
Hammerdown Gold mine has the potential to convert Maritime into a junior 
gold producer. Through the ongoing partnership and discussions with Rambler 
Metals and Mining, Maritime hopes to quickly advance Hammerdown towards 
commercial productions by, utilizing the Nugget Pond gold mill where ore 
from this deposit was processed in the past. 
 
'In addition to a high internal rate of return and short payback period, 
the project has numerous opportunities that could further enhance the 
project's economics. We are confident that with access to the underground 
workings, combined with a surface diamond drilling program, our 
understanding of the deposit and the mineralization will significantly 
increase. The surface exploration program will aim to extend the gold vein 
system along trend, to test the blue sky potential, while a more focused 
program will be designed to improve the confidence level of any inferred 
material so that it can be further considered for inclusion in the reserve 
and mine plan. 
 
'Being a Canadian asset, Maritime benefits not only from working in one of 
the safest jurisdictions in the world, but also from selling commodities in 
US dollars whilst most costs remain in Canadian dollars. This, combined 
with high grade, low capital costs and low project risks, makes the 
Hammerdown mineral asset unique amongst its peers. 
 
'With this study now in-hand we will continue our efforts into the 
permitting aspects of the project while reviewing options to potentially 
fund the reopening of the Hammerdown Gold mine.' 
 
MINERAL RESOURCE AND RESERVE UPDATE 
 
As part of the PFS, a new geological resource and reserve has been 
estimated for the Hammerdown project. Tables 1 and 2 below outline the 
results of this updated estimate which will also be detailed in the 
technical report filed with SEDAR. No inferred mineralisation was included 
in the reserve estimate. 
 
MINERAL RESERVE 
 
Table 1 Mineral Reserve Estimate Summary for the Hammerdown Gold Project 
 
CLASSIFICATION QUANTITY GRADE CONTAINED METAL 
tonnes Au, g/t Au, Koz 
Proven Reserves (undiluted, unrecovered) 118,600 15.17 57.8 
Probable Reserves (undiluted, unrecovered) 320,600 11.79 121.5 
Total Proven and Probable 439,200 12.70 179.4 
Reserve(undiluted, unrecovered) 
Dilution (all sources) 261,400 0 0 
Reserve (diluted and recovered) 700,600 7.96 179.4 
Note: see Mineral Reserve Statement Notes below 
 
MINERAL RESOURCE 
 
Table 2 Mineral Resource Estimate for the Hammerdown/Rumbullion/Muddy Shag 
Gold Deposits 
 
CLASSIFICATION QUANTITY GRADE CONTAINED METAL 
tonnes Au, g/t Au, Koz 
Measured 372,170 12.09 144.7 
Indicated 553,500 9.60 170.9 
Total Measured + Indicated 925,670 10.60 315.6 
Inferred 1,557,000 7.53 376.8 
Note: see Mineral Resource Statement Notes below 
 
The procedures used for the resource and reserve estimation processes are 
consistent with the Canadian Institute of Mining and Metallurgy ('CIMM') 
best practices and NI 43-101 guidelines. Generally, figures are rounded to 
reflect the accuracy of the estimate; numbers may not total due to this 
rounding. 
 
Pre-Feasibility Study ('PFS') SUMMARY 
 
The PFS is based on the measured and indicated mineral resources only 
within the Hammerdown deposit. The Orion deposit, located approximately 1.5 
km from Hammerdown gold mine, was not considered a part of this study and 
remains an opportunity for the project. 
 
Ore mined at Hammerdown will be trucked and processed, at approximately 400 
mtpd, at the Nugget Pond mill through a toll milling arrangement with 
Rambler Metals and Mining Canada Limited with whom Maritime has a strategic 
alliance. 
 
Ore will be mined by way of a combination of both Long Hole and Mechanized 
Cut and Fill, utilizing the original access portal and a small portion of 
the existing underground workings. 
 
Mine life in the PFS is approximately 5 years producing an average of 
approximately 35,000 ounces of gold per year with an all in pre-tax cost of 
approximately $955 per ounce. 
 
Additional opportunities exist to improve the low risk, low capital base 
case scenario, including: 
 
- Additional resource growth through the exploration and development of 
the Inferred Resource at Hammerdown that sits within the existing mine 
plan and contains up to 377,000 oz. gold; 
- The potential of open pit production from Orion, not included is this 
study, during the first few years of operations; 
- Further studies on both mining method, to minimize dilution, as well as 
underground development. This work will be initiated once the portal 
has been reopened and refurbishing of the underground workings have 
begun. 
- Integration of ore pre-concentration at the mine site. This could 
potentially allow for further optimization of mine production by 
reducing the amount of waste and improving the grade being delivered to 
the mill; 
- A detailed review will be completed of all surface infrastructure 
including, utilities, building and electrical etc. to determine the 
optimal use of and requirements for this equipment; 
- All mine and surface mobile equipment is purchased upfront as new. 
There may be opportunities to source some equipment in the used market 
or possible arrange equipment financing terms with a supplier. A review 
of both size and quantity of mobile equipment will be completed for 
optimization and potential reduction in up front capital. 
 
A National Instrument 43-101 ('NI 43-101') technical report will be filed 
on SEDAR at www.sedar.com within 45 days, before the end of April 2017. 
 
ECONOMIC SUMMARY 
 
Table 3 Project Economics 
 
ITEM VALUE 
Production Life 5 Years 
Recovered Gold 174,000 oz 
Revenue 270 $ M 
Total Operating Cost Estimate 97.1 $ M 
Total Capital Cost Estimate (Over LOM) 67.8 $ M 
Before-Tax Cash Flow 104 $ M 
After-Tax Cash Flow 69 $ M 
Before-Tax Net Present Value (8% discount) 71.2 $ M 
After-Tax Net Present Value (8% discount) 44.2 $ M 
Internal Rate of Return, Before-Tax 46 % 
Internal Rate of Return, After-Tax 34.8 % 
Before-Tax Payback Period, from start of production 1.7 Years 
After-Tax Payback Period, from start of production 1.9 Years 
 
Table 4 Summary Project Parameters and Economics 
 
ITEM VALUE 
Gold Price 1250 US$/oz 
Exchange Rate 0.8 US$: 1 CA$ 
Mill Feed 700,500 Tonnes 
Head Grade 7.96 g/t 
Gold Production 174,000 oz 
LOM Capital Estimate 
Mine Development Capital 16.8 $ M 
Mine Development Sustaining Capital 5.5 $ M 
Mine Equipment Capital 7.2 $ M 
Mine Equipment Sustaining Capital 7.1 $ M 
Water Management 0.7 $ M 
Infrastructure 8.6 $ M 
Power, Electricity 3.9 $ M 

(MORE TO FOLLOW) Dow Jones Newswires

March 02, 2017 06:02 ET (11:02 GMT)
Disclaimer
Top 5 Special Reports
Weekly: ICE Cotton Ends up; Awaits US-China Trade Deal...
Weekly: Pulses Slips On Listless Demand In Dals, Liquid...
USD/INR (Dec. 19) Bearish Short-term Trend: Retestin...
USD/INR (Dec. 19) Retesting Major Support Near 71.00...
USD/INR (Dec. 19) Retesting Major Support Near 71.00...