/NOT FOR DISSEMINATION OR DISTRIBUTION IN
(All financial figures in US Dollars unless otherwise stated)
Note that all Haile Technical Report forecasts are based on Mineral Reserves only. The results of the Technical Report are not to be used as formal guidance. The Company expects to provide formal annual guidance for production, costs and capital based on Board approved budgets in the first quarter of 2021.
Key Highlights
- Life of mine extended to 2033 based on Mineral Reserves only
- Reserve Gold Price Case ("Reserve Case") pre-tax net present value ("NPV") (5% discount rate) of approximately
US$930 million , after-tax ofUS$892 million at a flat gold price of$1,500 /oz - Market Consensus Gold Pricing Case ("Market Pricing Case") pre-tax NPV5% of approximately
US$1.1 billion , after-tax ofUS$1.05 billion - Reserve Case life of mine pre-tax undiscounted free cash flows of approximately
$1.3 billion , after-tax of$1.2 billion - Market Pricing Case life of mine pre-tax undiscounted free cash flows of approximately
$1.5 billion , after-tax of$1.4 billion - Increased Proven & Probable Gold Reserves by 60,000 ounces, Measured & Indicated Resources by 120,000 ounces and Inferred Resources by 40,000 ounces, all net of mine depletion as at
June 30, 2020 - Approximate life of mine cash costs of
$590 per ounce and All-In Sustaining Costs ("AISC") of$800 per ounce - Horseshoe Underground optimal mine sequence confirmed as bottom-up with development expected to commence in 2021 and first production targeted for late 2022
- Average annual life of mine gold production of 180,000 - 200,000 ounces, increasing to approximately 250,000 ounces when on combined open pit and underground mill feed between 2023 and 2027
- Underground exploration targets advancing including Horseshoe, Snakeshoe and Palomino with new drill targets at Aquarius and Pisces (both not included in the Technical Report)
"Haile has been a commercial operation for approximately three years. Despite numerous challenges during this time, we have successfully increased the process plant capacity by approximately 75% from nameplate, have significantly increased mining rates while reducing unit costs, upskilled the local workforce and attracted experienced operations managers who have improved the safety culture and operational productivity. We continue to adapt to the extreme weather patterns of the last few years in the Carolinas that have at times hampered mining productivity. Through our experience of operating Haile over the past few years, we have updated its mine plan to deliver over the long-term."
"We evaluated the Horseshoe Underground mine sequence and confirmed a bottom-up approach as the optimal mine sequence. We plan to commence development of the Horseshoe Underground in late 2021 with first production targeted for late in 2022. Gold mineralisation below the current reserve open pit design represents significant underground growth opportunity for the Company with further drilling being planned to convert Inferred Resources (Horseshoe, Palomino), define new resources where we have intersected significant zones of mineralisation (Snakeshoe) and test new underground targets Pisces and Aquarius. Underground ore feed is an important part of Haile's future operation. Its importance is illustrated in the updated Technical Report with average annual gold production of 250,000 ounces a year at first quartile costs when both open pit and underground ore is fed through the mill."
Updated Mineral Reserves and Resources
As at
Table 1 – Proven & Probable Mineral Gold Reserves ( | |||||||||||
Resource Area | Proven | Probable | Proven & Probable | ||||||||
Mt | Au g/t | Ag g/t | Mt | Au g/t | Ag g/t | Mt | Au g/t | Ag g/t | |||
3.0 | 1.37 | 2.54 | 46.4 | 1.58 | 2.35 | 49.4 | 1.57 | 2.36 | 2.49 | 3.75 | |
Underground | - | - | - | 3.4 | 3.78 | - | 3.4 | 3.78 | - | 0.42 | - |
Haile Total | 3.0 | 1.37 | 2.54 | 49.8 | 1.73 | 2.19 | 52.8 | 1.71 | 2.21 | 2.91 | 3.75 |
|
Open Pit Notes: |
|
Underground Notes: |
|
As at
Table 2 – Measured & Indicated Resources ( | |||||||||||
Resource Area | Measured | Indicated | Measured & Indicated | ||||||||
Mt | Au g/t | Ag g/t | Mt | Au g/t | Ag g/t | Mt | Au g/t | Ag g/t | |||
3.2 | 1.35 | 2.61 | 52.3 | 1.53 | 2.40 | 55.5 | 1.52 | 2.41 | 2.71 | 4.30 | |
Underground | - | - | - | 3.3 | 4.95 | - | 3.3 | 4.95 | - | 0.53 | - |
Haile Total | 3.2 | 1.35 | 2.61 | 55.6 | 1.73 | 2.40 | 58.8 | 1.71 | 2.27 | 3.24 | 4.30 |
Table 3 – Inferred Mineral Resources ( | |||||
Resource Area | Inferred Resources | ||||
Mt | Au g/t | Ag g/t | |||
7.6 | 1.0 | 1.3 | 0.24 | 0.32 | |
Underground | 9.0 | 3.1 | - | 0.90 | - |
Haile Total | 17 | 2.1 | 0.6 | 1.1 | 0.32 |
Notes: |
|
The Company continues to focus on resource growth and conversion at Haile with an emphasis on underground targets with significant results (i.e. addition of Palomino Inferred Resource of 600koz in 2019). The Company will incorporate 2020 drill results into the year-end Resource and Reserve update.
Operating Physicals
Over the life of mine, the Company expects to produce approximately 2.5 million ounces of gold with an average annual life of mine gold production of approximately 180,000 - 200,000 ounces, increasing to approximately 250,000 ounces with combined both open pit and underground mill feed (2023 to 2027).
The life of mine AISC is estimated to be approximately
Figure 1 – Technical Report Haile Production & Cost Profile
|
Table 4 – Site All-in Sustaining Cost Breakdown (Reserve Case) | ||
All-in Sustaining Cost Inputs | Units | Average LOM (per oz Au sold) |
Direct cash costs | per oz Au sold | |
Sustaining capital expenditures | per oz Au sold | |
Total Site All-in Sustaining Costs | per oz Au sold |
Table 5 – Operating Unit Costs Overview | ||
Operating Costs | Units | Average LOM |
per tonne mined | ||
Underground | per tonne mined | |
Processing | per tonne milled | |
Site General & Administrative | per tonne milled |
|
The Company expects to mine approximately 388 million tonnes of waste and 46 million tonnes of ore from the open pits for a life of mine strip ratio of 8.4 to 1 from 2021 onward. Open pit mining is expected to average 40 million tonnes of waste and 4 million tonnes of ore per year based on historical mining and weather data up until 2029, reducing thereafter. Mining rates are based on the operation's expanded mine footprint and has factored additional Potential Acid Generating ("PAG") material which requires engineered and environmentally approved containment locations. Open pit mining unit costs are estimated to average approximately
The Haile Underground is initially expected to mine approximately 3.4 million tonnes of ore over an average five-year mine life or approximately 680,000 tonnes a year based on Reserves. The Company will target the conversion of Horseshoe Inferred Resources and other underground targets along the one-kilometre corridor between Horseshoe and Palomino (Figure 8). Horseshoe underground mining unit costs are estimated to be approximately
Figure 2 – Haile Mining Physicals
Since 2017, the Company has increased the Haile process plant capacity by approximately 75% above nameplate (2.3 million tonnes per annum) and expects a steady-state annual throughput rate of approximately four million tonnes per annum. Processing unit costs are estimated to further decrease and average approximately
Over the life of mine, the head grade is estimated to average 1.7 grams per tonne and approximately 2.3 grams per tonne between 2023 and 2027 from combined open pit and underground ore feed. Gold recoveries are typically correlated with head grade and are expected to average approximately 85% over life of mine and 87% from 2023 and 2027 with the higher average head grade from combined open pit and underground ore feed.
Figure 3 – Haile Processing Physicals
The Company has refined its capital cost estimate to incorporate additional infrastructure required over the life of mine from 2021 onward, which is based on operating data from over the last few years. Total non-sustaining (growth) capital for the expanded Haile operation, excluding site closure costs is estimated at approximately
The Horseshoe Underground mine plan has been enhanced and development capital investment is estimated to be approximately
Site closure capital is estimated at
Total sustaining capital for Haile is estimated to be approximately
Figure 4 – Haile Capital Investments
|
Economics
The Haile Technical Report highlights an estimated Reserve Case pre-tax NPV5% of approximately
Table 6 – Economic Analysis Overview | |||
Unit | Reserve Case | Market Consensus Case | |
Average LOM Gold Price | $/oz | 1,500 | 1,574 |
Average LOM Silver Price | $/oz | 17.00 | 19.44 |
Life of Mine (based on Reserves) | 2033 | 2033 | |
LOM Payable Gold | koz | 2,470 | 2,470 |
Pre-tax NPV5% | USDm | 930 | 1,110 |
After-tax NPV5% | USDm | 892 | 1,050 |
LOM Pre-Tax Free Cash Flow | USDm | 1,290 | 1,480 |
LOM After-tax Free Cash Flow | USDm | 1,240 | 1,410 |
|
Table 7 – Gold Price Assumptions | ||
USD/oz | Reserve Case | Market Consensus Case |
H2 2020 | 1,500 | 1,850 |
2021 | 1,500 | 1,850 |
2022 | 1,500 | 1,750 |
2023 | 1,500 | 1,650 |
2024 & Long-term | 1,500 | 1,500 |
|
Figure 5 – Reserve Case NPV Sensitivity Chart
Over the life of mine, the Company expects the Haile operation to generate
Figure 6 – Haile Net Cash Flow Profile – Reserve Case
Figure 7 – Haile Net Cash Flow Profile – Market Consensus Case
Exploration
The Company continues to define the potential of underground mining opportunities at Haile. The Company expects it will focus exploration efforts on further defining underground opportunities in an effort to extend the life of these operations beyond the initial five-years. Previous drilling of underground targets from surface has identified high-grade zones across the Horseshoe - Palomino trend that require further drill definition and understanding. The Company has also identified new underground targets, Pisces and Aquarius and plans to drill these targets in the near-future. Neither of these targets are included as the Technical Report is based on Reserves only.
Figure 8 – Haile Underground Targets
In line with ASX listing requirements,
Authorised for release to market by
About
Qualified Persons and Scientific and Technical Information
The Mineral Resource estimates included in this public release have been prepared under the supervision of
Each of
Messrs Carr, Cooney and Moore are full-time employees of the Company's subsidiary,
Cautionary Statement for Public Release
Certain information or statements contained in this public release may be deemed "forward-looking" within the meaning of applicable securities laws. Forward-looking statements and information relate to, among other things, future performance and study results and reflect the Company's expectations regarding the generation of free cash flow, achievement of guidance, execution of business strategy, future growth, future production, estimated costs, results of operations, business prospects and opportunities of
This public release also contains references to estimates of Mineral Resources and Mineral Reserves. The estimation of Mineral Resources and Mineral Reserves is inherently uncertain and involves subjective judgments about many relevant factors. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation which may prove to be unreliable and depend, to a certain extent, upon the analysis of drilling results and statistical inferences that may ultimately prove to be inaccurate. Mineral Resource or Mineral Reserve estimates may have to be re-estimated based on: (i) fluctuations in gold price; (ii) results of drilling, (iii) the results of metallurgical testing and other studies, including their subsequent refinement and updating; (iv) proposed mining operations, including dilution; (v) the evaluation of mine plans subsequent to the date of any estimates; (vi) changes in mining or other costs, and (vii) the possible failure to receive required permits, approvals and licenses or changes to existing mining licences.
As well, all of the economic results of studies included in this public release constitute forward-looking information or statements including pre-tax NPV (5% discount rate) of approximately
There are no assurances the Company can fulfil forward-looking statements and information. Such forward-looking statements and information are only predictions based on current information available to management as of the date that such predictions are made; actual events or results may differ materially as a result of risks facing the Company, some of which are beyond the Company's control. Although the Company believes that any forward-looking statements and information contained in this public release is based on reasonable assumptions, readers cannot be assured that actual outcomes or results will be consistent with such statements. Accordingly, readers should not place undue reliance on forward-looking statements and information.
The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements and information, whether as a result of new information, events or otherwise, except as required by applicable securities laws. The information contained in this release is not investment or financial product advice.
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