Newcore Gold Announces Positive Updated Preliminary Economic Assessment for the Enchi Gold Project, Ghana
After-Tax NPV5% of $371 million, After-Tax IRR of 58% at $1,850/oz Gold, Average Annual Gold Production of ~120,000 ounces
April 25, 2024, TSX-V: NCAU, OTCQX: NCAUF - Vancouver, BC – Newcore Gold Ltd. ("Newcore" or the "Company") (TSX-V: NCAU, OTCQX: NCAUF) is pleased to announce positive results from the independent, updated Preliminary Economic Assessment ("PEA") completed for the Company’s 100%-owned Enchi Gold Project ("Enchi" or the "Project") in Ghana. The PEA was led by Lycopodium Minerals Canada Limited ("Lycopodium") of Toronto, Canada and provides a base case assessment of developing Enchi as a low capital intense, open pit, heap leach operation, processing 8.1 million tonnes per annum ("mtpa") utilizing contract mining. The PEA incorporated updated costing as well as development work completed on the Project since 2021 including a larger Mineral Resource Estimate completed in 2023, a significant amount of bench-scale and bulk sample metallurgical testwork and an updated environmental and social baseline study. All currencies in this news release are reported in U.S. dollars.
Highlights from the PEA at Enchi
- Strong project economics with low capital intensity.
- At a gold price of $1,850/oz: $586 million pre-tax net present value discounted at
- 5% ("NPV5%") and a 77% pre-tax internal rate of return ("IRR"), $371 million after-tax NPV5% and a 58% after-tax IRR.
- At a gold price of $2,350/oz: $987 million pre-tax NPV5% and a 127% pre-tax IRR,
- $632 million after-tax NPV5% and a 92% after-tax IRR.
- Initial capital costs estimated at $106 million (including a 20% contingency), with a short after-tax payback of 1.6 years.
- Robust production profile with a low-cost structure driven by a technically straightforward, open pit, heap leach operation and low strip ratio.
- Average annual gold production of 121,839 ounces; peak gold production in year 6 of 155,188 ounces; 1.1 million ounces gold recovered over a 9-year life of mine ("LOM").
- LOM strip ratio of 2.67 to 1, mined grade of 0.60 g/t Au and gold recovery of 81.8%.
- LOM operating costs (1) estimated at $801/oz of gold, cash costs (2) estimated at $934/oz of gold, LOM all-in sustaining costs (AISC) (3) estimated at $1,018/oz of gold.
- Economics incorporate significant development work completed since 2021.
- The PEA incorporated the Mineral Resource Estimate completed in 2023 which reflected the addition of approximately 34,000 metres of Reverse Circulation ("RC") and diamond drilling completed in 2021 and 2022.
- Significant metallurgical testwork completed to date, highlighting the Project’s amenability to heap leach processing. Advanced metallurgical testwork consists of more than 390 tests including bottle rolls, column tests and two bulk-scale pilot heap tests.
- Significant longer-term growth potential from the district-scale exploration opportunity at Enchi.
- Enchi’s property covers 248 km2 along a prolific gold belt that hosts multi-million-ounce gold mines. Newcore has identified more than 20 pre-resource targets across the property and with less than 10% of the property explored. The district scale exploration opportunity at Enchi remains largely underexplored and untested.
- All deposits and targets remain open along strike and at depth, with potential for resource growth in both shallow oxides and within the sulphide mineralization.
Note: All currencies in this news release are reported in U.S. dollars unless otherwise specified. Base case parameters assume a gold price of $1,850/oz. NPV calculated as of the commencement of construction and excludes all pre-construction costs. Cash costs and AISC are non-IFRS financial measures (see cautionary language).
(1) Operating costs consist of mining costs, processing costs and mine site G
(2) Cash costs consist of operating costs plus treatment and refining charges and royalties.
(3) AISC consists of cash costs plus sustaining capital (excluding closure costs).
Luke Alexander, President and CEO of Newcore stated, "The PEA confirms the opportunity at Enchi to develop an open pit, heap leach operation with robust economics. This is a notable milestone and an important step in advancing the development of our Enchi Gold Project in Ghana towards a construction decision. The PEA is a culmination of several years of de-risking work that included an updated Mineral Resource Estimate completed in 2023 and significant metallurgical testwork on the Project. Having Lycopodium on-board as the lead consultant also continues to support the development of Enchi as they are a partner of choice given their strong operational experience in West Africa. Our emphasis moving forward is to continue to drive development of the Project towards production, while not losing focus on the district scale exploration opportunity that will drive the size and scale opportunity at Enchi longer-term. The economics within the PEA support advancing Enchi towards production while also providing a strong underpinning of value for Newcore as we look to continue to unlock the Project’s significant potential."
Greg Smith, VP Exploration of Newcore stated, "We believe that longer-term the Project economics will benefit from the sizeable upside potential that exists at Enchi, with future resource expansion probable within not only the near-surface oxide and transition mineralization but also within the higher-grade structures defined at depth. The Project has substantial untapped potential, with a strategic location along a gold belt that hosts sizable mining operations. Enchi’s geological footprints align with those neighboring gold mines, with Newcore only just starting to define the potential of the Project that is reminiscent of its neighbors that began small and grew significantly over time. We look forward to continuing to prove out this potential for size and scale with an exploration focus alongside driving development of the Project going forward. As we advance Enchi with additional studies towards production, we will continue to prioritize working with our local communities to provide positive impacts, creating value for all stakeholders as we unlock the significant value potential at our Enchi Gold Project in Ghana."
The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that PEA results will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
The PEA was prepared by Lycopodium as the lead consultant in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). Lycopodium was the lead study manager and led the design parameters and cost estimates for process operations, process facilities, major equipment selection, plant site infrastructure, as well as operating and capital expenditures. The PEA was supported by Micon International Limited (mine planning and mine operations, reclamation) and SEMS Exploration (mineral resource estimates). The NI 43-101 PEA Technical Report will be filed on SEDAR+ within 45 days of this news release. All currencies are reported in U.S. dollars unless otherwise specified.
Newcore will host an investor webinar to discuss the results of the PEA on Friday, April 26, 2024 at 10am PT / 1pm ET. Details are provided at the end of this news release.
PEA Overview and Financial Analysis
The Enchi Gold Project is located in southwest Ghana, with the Project’s 248 km2 covering approximately 40 kms of Ghana’s prolific Bibiani Shear Zone, a gold belt which hosts several multi-million-ounce gold mines including Newmont’s Ahafo Mine and Asante Gold’s Bibiani and Chirano mines.
The PEA, with an effective date of April 24, 2024, contemplates an open pit, heap leach operation with a low strip ratio using contract mining and processing 8.1 mtpa (approximately 22,500 tonnes per day). The heap leach facility will be built in three phases, with excess capacity available for future expansion. Heap leach feed will be trucked from five deposits (Sewum, Boin, Nyam, Kwakyekrom, Tokosea) to a central crushing and heap leach facility which will be located between the Boin and Sewum deposits, which together host approximately 76% of the Mineral Resources currently defined at Enchi. Secondary crushing capacity is assumed to only be required once the mine plan shifts to processing transitional and fresh rock mineralization, in the second half of the mine life, reducing the upfront capital cost requirements.
Link to English original news:
Presentation and Investor Webinar
Newcore will host an investor webinar to discuss the PEA on Friday, April 26, 2024 at 10am PT / 1pm ET. Shareholders, analysts, investors and media are invited to join the live webcast by registering using the following link:
https://events.6ix.com/preview/updated-pea-highlights-robust-economics-at-the-enchi-gold-project .
After registering, you will receive a confirmation email containing details to access the webinar. The replay will also be available on Newcore’s website.
A presentation to accompany the webinar and PEA will be available on the Company’s website.
Qualified Persons and NI 43-101 Technical Report
The PEA for the Enchi Gold Project was prepared for Newcore by personnel from Lycopodium and other industry consultants, each of whom is a "qualified person" within the meaning of NI 43-101 and considered to be "independent" of the Company under section 1.5 of NI 43-101. Each Qualified Person has reviewed and confirmed that the scientific and technical information in this news release accurately reflects the summaries or extracts of the NI 43-101 Technical Report for which they are responsible.
- Lycopodium Mineral Canada Ltd.: Preetham Nayak, P.Eng. (Infrastructure and Project Economics), Ryda Peung, P.Eng. (Metallurgy and Mineral Processing)
- Micon International Limited: Kerrine Azougarh, P.Eng. (Mining)
- SEMS Exploration: Simon Meadows Smith, P.Eng/P.Geo (Geology and Mineral Resources)
Mr. Gregory Smith, P. Geo, Vice President of Exploration at Newcore, is a Qualified Person as defined by NI 43-101. He has reviewed and approved other scientific and technical information contained in this news release for which the independent Qualified Persons who prepared the NI 43-101 Technical Report are not responsible. For prior exploration and drilling results, Mr. Smith has verified the technical and scientific data disclosed herein and has conducted appropriate verification on the underlying data including confirmation of the drillhole data files against the original drillhole logs and assay certificates.
The NI 43-101 Technical Report supporting the PEA will be filed under the Company’s SEDAR+ profile at www.sedarplus.ca , and on Newcore’s website, within 45 days of this news release.
Newcore Gold Best Practice
Newcore is committed to best practice standards for all exploration, sampling and drilling activities. Drilling was completed by an independent drilling firm using industry standard RC and Diamond Drill equipment. Analytical quality assurance and quality control procedures include the systematic insertion of blanks, standards and duplicates into the sample strings. Samples are placed in sealed bags and shipped directly to Intertek Labs located in Tarkwa, Ghana for 50 gram gold fire assay.
Non-IFRS Financial Measures
The Company has included certain non-IFRS financial measures in this news release, such as initial capital cost, sustaining capital cost, total capital cost, cash costs and AISC, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. As a result, these measures may not be comparable to similar measures reported by other companies. Each of these measures used are intended to provide additional information to the reader and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Non-IFRS financial measures used in this news release and common to the gold mining industry are defined below.
Cash Costs and Cash Costs per Ounce
Cash costs are reflective of the cost of production. Cash costs reported in the PEA consist of mining costs, processing costs, mine site G, treatment and refining charges and royalties. Cash costs per ounce is calculated as cash costs divided by payable gold ounces.
AISC and AISC per Ounce
AISC is reflective of all of the expenditures that are required to produce an ounce of gold from operations. AISC reported in the PEA includes cash costs plus sustaining capital, but excludes closure costs, corporate general and administrative costs and taxes. AISC per ounce is calculated as AISC divided by payable gold ounces.
About Newcore Gold Ltd.
Newcore Gold is advancing its Enchi Gold Project located in Ghana, Africa’s largest gold producer (1). The Project currently hosts an Indicated Mineral Resource of 743,500 ounces of gold at 0.55 g/t and an Inferred Mineral Resource of 972,000 ounces of gold at 0.65 g/t. Newcore Gold offers investors a unique combination of top-tier leadership, who are aligned with shareholders through their 22% equity ownership, and prime district scale exploration opportunities. Enchi’s 248 km2 land package covers 40 kilometres of Ghana’s prolific Bibiani Shear Zone, a gold belt which hosts several 5 million-ounce gold deposits, including the Chirano mine 50 kilometers to the north. Newcore’s vision is to build a responsive, creative and powerful gold enterprise that maximizes returns for shareholders.
(1) Source: Production volumes for 2022 as sourced from the World Gold Council.
About Lycopodium
Lycopodium brings extensive studies and project delivery experience in gold mineral processing plants in West Africa, including Ghana. Over the past 25+ years they have participated or delivered over 30 greenfield projects in West Africa, and 13 within Ghana. Lycopodium have an established office in Accra and are currently participating in a similar greenfield gold project, located approximately 200 kilometres north of Newcore’s Enchi Gold Project. Through their long-term and current project experience Lycopodium have developed extensive knowledge of Ghanian and West African suppliers and contractors, as well as local capital and operating costs. Lycopodium has a demonstrated track record for the development and delivery of value-optimised, fit-for-purpose, fast to ramp up and easy to operate mineral processing plant projects, delivered in a timely manner.
About Micon International Limited
Micon International Limited is an independent firm of senior geologists, mining engineers, and metallurgists headquartered in Toronto, Ontario, Canada. Micon also maintains a fully integrated office in Norwich, United Kingdom, as well as retaining full-time consultants based in other locations within the UK and France. Micon’s professional staff have extensive experience in the mining industry with both mining companies and leading consultancy firms. Since 1988, Micon has offered a broad range of consulting services to clients involved in the mineral industry. The firm maintains a substantial practice in the geological assessment of prospective properties, the independent estimation of mineral resources and mineral reserves, the compilation and review of feasibility studies, the economic evaluation of mineral properties, due diligence reviews, and the monitoring of mineral developments on behalf of financing institutions. Micon’s practice is worldwide and includes precious and base metals, energy minerals, and a wide variety of industrial and specialty minerals.
About SEMS Exploration
SEMS Exploration is the leading full-services mineral exploration and mining consultancy company in West Africa. Since 2002, SEMS Exploration has provided independent geological consultancy and in-country support services to the mineral exploration and mining industry of West Africa. During this time, SEMS Exploration has established a reputation for dedicated, high quality work for a wide range of clients from major mining companies to junior exploration companies and private investors. SEMS Exploration provides a full range of geological, mining engineering and environmental services; from grassroots reconnaissance through mineral resource estimations, project management and mine design.
On Behalf of the Board of Directors of Newcore Gold Ltd.
Luke Alexander
President, CEO Director
For further information, please contact:
Mal Karwowska | Vice President, Corporate Development and Investor Relations
+1 604 484 4399
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
This news release includes statements that contain "forward-looking information" within the meaning of the applicable Canadian securities legislation ("forward-looking statements"). All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussion with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often, but not always using phrases such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. In this news release, forward-looking statements relate, among other things, to: timing of completion of a technical report summarizing the results of the PEA; the development, operational and economic results of the PEA, including cash flows, capital expenditures, development costs, extraction rates, recovery rates, mining cost estimates; estimation of mineral resources; statements about the estimate of mineral resources; magnitude or quality of mineral deposits; anticipated advancement of the Enchi Gold Project mine plan; future operations; future exploration prospects; the completion and timing of future development studies; anticipated advancement of mineral properties or programs; future exploration prospects; and the future growth potential of Enchi.
These forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business. The assumptions underlying the forward-looking statements are based on information currently available to Newcore. Although the forward-looking statements contained in this news release are based upon what management of Newcore believes, or believed at the time, to be reasonable assumptions, Newcore cannot assure its shareholders that actual results will be consistent with such forward-looking statements, as there may be other factors that cause results not to be as anticipated, estimated or intended. Forward-looking information also involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include, among others: risks related to interpretation of metallurgical characteristics of the mineralization, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, uninsured risks, regulatory changes, delays or inability to receive required approvals, taxes, mining title, the speculative nature of the Company’s business; the Company’s formative stage of development; the Company’s financial position; possible variations in mineralization, grade or recovery rates; actual results of current exploration activities; fluctuations in general macroeconomic conditions; fluctuations in securities markets; fluctuations in spot and forward prices of gold and other commodities; fluctuations in currency markets (such as the Canadian dollar to United States dollar exchange rate); change in national and local government, legislation, taxation, controls, regulations and political or economic developments; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, unusual or unexpected geological formations); the presence of laws and regulations that may impose restrictions on mining; employee relations; relationships with and claims by local communities; the speculative nature of mineral exploration and development (including the risks of obtaining necessary licenses, permits and approvals from government authorities); and title to properties.
Forward-looking statements contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information.
