BATTLE MOUNTAIN — Premier Gold Mines Ltd. is primed for advanced exploration at its $143 million Cove Project, the company announced May 15 after receiving the results of its preliminary economic assessment.
“This PEA sets the stage for the company’s planned advanced-exploration initiative at Cove,” said Ewan Downie, president and CEO of Premier Gold Mines. “These results support our plan for the construction of an exploration ramp to further define and expand the deposits in advance of a future feasibility study.”
The Cove Project covers 700 acres and is in the McCoy-Cove Exploration joint venture, 32 miles south of Battle Mountain in Lander County.
The PEA outlines an after-tax net present value of $143 million and an after-tax internal rate of return of 48 percent. After-tax cash flows result in a payback after four years. Over the life of mine, capital costs are estimated to total $114.4 million after pre-development costs of $25.8 million.
The indicated mineral resource totals more than 1 million tons at 0.327 ounces per ton of gold and 0.861 ounces per ton of silver for 342,000 ounces of gold and 900,000 ounces of silver, the company stated in a press release.
Life-of-mine gold production is estimated at 740 million ounces of gold during eight years of operations. The project will process 2.93 million tons at an average grade of 0.31 ounces per ton of gold.
Assessments assume the mining of the Helen and Gap resources, with the potential to increase mineral resources. Metallurgical testing took composite samples from the Helen and Gap zones through whole ore cyanidation testing, roasting and calcine cyanidation tests, and pressure oxidation with cyanidation of the residues. Results indicate that in general the Gap mineralization performs better with pressure oxidation, and the Helen mineralization performs better with roasting.
The mine will be accessed by a single ramp extending from the surface (elevation 4,625 feet) to the lowest extent of planned mining (elevation 3,430 feet). The access ramp will be large enough to accommodate 30-ton trucks. A series of raises will provide secondary egress and ventilation. A mining contractor will extract the mineralization using drift and fill mining methods at an average rate of 1,270 tons per day.
Three roasting facilities and two pressure oxidation facilities in northern Nevada are amenable to processing the Cove mineralization. The preliminary economic assessment incorporates toll-milling arrangements with associated over-the-road trucking costs for both process methods.
The Cove Project is fully permitted under an environmental assessment to develop an exploration ramp, complete underground diamond drilling and test mine up to 120,000 tons of potentially economic mineralization.
The focus for the remainder of 2018 and 2019 includes refinement of the hydrological model and development of an exploration decline to support underground diamond drilling to upgrade and add to mineral resources. Baseline studies, permitting, and a feasibility study are planned for 2019-20.