{"id":1195439,"date":"2020-07-13T10:48:02","date_gmt":"2020-07-13T15:48:02","guid":{"rendered":"https:\/\/resourceworld.com\/?p=58832"},"modified":"2020-07-13T10:48:02","modified_gmt":"2020-07-13T15:48:02","slug":"rockhaven-announces-robust-pea-with-post-tax-378m-npv5-and-37-irr-for-its-klaza-gold-silver-project-southern-yukon","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1195439","title":{"rendered":"Rockhaven Announces Robust PEA with Post-Tax $378M NPV(5%) and 37% IRR for its Klaza Gold-Silver Project, Southern Yukon"},"content":{"rendered":"

Rockhaven Resources Ltd.<\/strong> [TSX-V:RK<\/a>] (\u201cRockhaven\u201d) is pleased to announce the results of an updated Preliminary Economic Assessment (\u201cPEA\u201d) for its 100%-owned and road-accessible Klaza Deposit, located in the Dawson Range Gold Belt of southern Yukon.<\/p>\n

PEA Highlights<\/strong>:<\/p>\n

Highlights from the PEA, with a base case gold price of US$1,450\/oz and an exchange rate of C$1.00 equal to US$0.72 are as follows (all figures in Canadian Dollars unless otherwise stated):<\/p>\n

\u2022 Pre-Tax NPV(5%) of $529 million and an IRR of 45%, and a Post-Tax NPV(5%) of $378 million and an IRR of 37%;
\n\u2022 Using a +\/- 20% sensitivity analysis for gold price, Post-Tax NPV(5%) of $540 million and 49% IRR at US$1,740\/oz gold and a Post-Tax NPV(5%) of $211 million and 24% IRR at US$1,160\/oz gold;
\n\u2022 12-year mine life producing total payable metals of approximately 750,000 ounces gold and 13.8 million ounces silver;
\n\u2022 Initial capital costs of $244 million, which includes $32 million in contingency costs. Life-of-mine (\u201cLOM\u201d) sustaining capital costs total $114 million;
\n\u2022 Average LOM operating cash cost of US$613\/oz AuEQ* and total all-in sustaining cost of US$875\/oz AuEQ*;
\n\u2022 Annual payable metal production exceeds 100,000 ounces AuEQ in years three through seven; and,
\n\u2022 Only the upper portions of three out of eleven known mineralized zones are included in Mineral Resources evaluated by this PEA, and there is excellent potential for value enhancement through additional exploration.<\/p>\n

\u201cThis study demonstrates that Rockhaven\u2019s Klaza Deposit could support a mine with a long life and robust economics,\u201d stated Matt Turner, President and CEO of Rockhaven.<\/u>\u00a0 \u201cSince the last economic study was completed in 2016, closer spaced drilling has better defined the upper portions of the deposit, resulting in higher average grades in a superior resource category.\u00a0 We are very pleased with the results of this PEA and look forward to continuing to add value through additional discoveries while advancing the deposit through Pre-Feasibility.\u00a0 At its current ~C$35 million market capitalization, Rockhaven offers investors one of the most compelling valuations in the sector.\u201d<\/p>\n

AMC Mining Consultants (Canada) Ltd. (mineral resource, mining, infrastructure and financial analysis) was contracted to conduct the PEA in cooperation with Blue Coast Metallurgy Ltd. (metallurgy and processing), Knight Piesold Ltd (tailings and waste management).\u00a0 The PEA is based on the updated Mineral Resource estimate from the Klaza Deposit (see Klaza Property Technical Report dated June 5, 2018).<\/p>\n

The reader should be cautioned that the PEA is preliminary in nature. It includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the results of the PEA will be realized.<\/p>\n

Economic Results and Sensitivities<\/strong><\/p>\n

Tables I and II show economic results with varying metal prices and assumptions, and summarize projected production.<\/p>\n

Table I: Klaza Combined Open Pit and Underground Mining \u2013 Key Economic Assumptions and Results<\/strong><\/p>\n

\"\"
1. LOM average
2. Gold equivalent values for mining purposes assume base case metal prices and recoveries used in the PEA and are calculated using the following formula: AuEQ=1*Au+Ag\/107.82+Pb\/4.14+Zn\/4.68
3. Overall payable % includes treatment, transport, refining costs and selling costs
4. Includes mine operating costs, milling, and mine G&A<\/figcaption><\/figure>\n

Table II: Klaza Economic Sensitivity Analysis (Post-tax)<\/strong><\/p>\n

\"\"<\/p>\n

Capital and Operating Costs<\/strong><\/p>\n

The Klaza project has been envisioned as a combined open-pit and underground mining operation.\u00a0 Open-pit mining is anticipated to be completed by a contract mining company while the underground operation will be owner-operator with the equipment owned and personnel employed by Rockhaven.<\/p>\n

Grid electrical power will provide the majority of the electrical power to the project over the life of the mine.\u00a0 An on-site camp is envisioned to house mine and mill personnel.<\/p>\n

\"\"<\/p>\n

Mining <\/strong><\/p>\n

Open-pit mining is anticipated to commence in Year 1 and produce a total of 1,181 kt of mineralized rock over three years.\u00a0 Peak open-pit production will be 598 kt in Year 2. A total of 6,283 kt of mineralized rock is anticipated to be produced from underground operations over the 12-year mine life, beginning in Year 1.\u00a0 Peak underground production will be 688 kt in Years 5 through 7.<\/p>\n

Underground mining will be accomplished using mechanized longhole open stoping on 25 m sub-levels.\u00a0 A minimum stope width of 3.0 m was used in this study with dilution of 0.25 m in the hanging wall and 0.1 m in the footwall.\u00a0 Underground access will be achieved via four separate declines for the each of the four main zones.\u00a0 The Central Klaza decline will start from the base of the open-pit.<\/p>\n

Waste rock will be used to backfill underground stopes as they are mined and to construct the tailings dams.\u00a0 The remainder will be disposed of in waste dumps on surface.<\/p>\n

Processing & Metallurgy<\/strong><\/p>\n

The Klaza process consists of comminution by crushing followed by semi-autogenous grinding and ball milling, with the ground product feeding a conventional sequential flotation circuit producing lead, zinc and arsenopyrite concentrates. The arsenopyrite concentrate is treated by pressure oxidation (POX), followed by cyanide leaching of the POX residue to recover the gold. Precious metals are also leached from the lead concentrate to increase the overall gold recovery to dor\u00e9 and enhance saleability of the concentrate. Final products from this process are precious-metal-rich lead and zinc concentrates as well as gold and silver as dor\u00e9.<\/p>\n

The processing plant will operate year-round at a rate of approximately 1,900 tonnes per calendar day, and will achieve full throughput by Year 2. The average LOM feed grade is projected to be 3.40 g\/t Au, 79 g\/t Ag, 0.6% lead and 0.7% zinc.<\/p>\n

Base metal concentrates will be dewatered and containerized for shipment to smelters. Flotation tailings will be thickened and sent to a conventional tailings impoundment, and the leached pressure oxidation residue will flow through cyanide destruction and be sent to a double-lined hydromet residue storage facility.<\/p>\n

Although this study assumes a relatively small 250 tpd onsite POX circuit would be used, an arsenopyrite concentrate could be produced for shipment to a smelter in Nevada or China.\u00a0 This was not considered in this study at this time but will be investigated as the project advances.<\/p>\n

Process water will primarily be sourced from underground dewatering and surface run-off, with make-up from the nearby Klaza River as necessary.<\/p>\n

Metallurgical testwork to support the PEA has been conducted on several composites from the Western Klaza, Central Klaza and Western BRX zones, as well as a Project-Wide Composite comprising a blend of material from these zones. Testwork included grinding, flotation and pressure oxidation work.<\/p>\n

Opportunities to Enhance Value <\/strong><\/p>\n

This updated PEA reaffirms Rockhaven\u2019s commitment to enhancing value at the Klaza project through engineering studies and resource expansion and definition.\u00a0 It has highlighted several key areas that can provide significant opportunities to further enhance the value of the Klaza project.\u00a0 These opportunities include:<\/p>\n