Positive feasibility study for Pershing Gold’s Relief Canon mine

Mine Development Associates (MDA), Kappes Cassidy & Associates (Kappes Cassidy), of Reno, NV and Jorgensen Engineering and Technical Services (Jorgensen Engineering), of Centennial, CO, completed the FS for the company's Relief Canyon gold mine with an effective date of 24 May 2018.

According to Pershing, highlights from the FS include a pre-tax net present value (NPV) of US$154 million, a pre-tax internal rate of return (IRR) of 91% and pre-tax Net Cash Flow of US$204 million. The NPV, IRR and Net Cash Flow figures assume pre-tax economics using US$1290 per ounce (/oz) of gold (Au), US$16.75/oz of silver (Ag) and a 5% discount rate.

Pershing Gold's Chairman and CEO, Stephen D. Alfers, commented: "The feasibility study validates the previous technical work we have done at Relief Canyon, confirming it to be a low CAPEX, low cost, high IRR project."

 

"We have always believed that the Relief Canyon mine has scale, because the deposit is open at depth and in three directions. Recent drilling bears this out, and we expect to add mine life as we continue infill drilling and exploration," said Alfers. 

Operating Cost and CAPEX

The FS demonstrates the applicability of contract-mining and conveyor stacking to bring the project into production. The FS estimates that 509 514 oz Au are expected to be produced with average life of mine (LOM) production of 91 000 oz Au/year over the 5.6 year LOM. The FS highlights the low-cost nature of this project with an average cash cost of US$769/oz Au and All in Sustaining Cost (AISC) of US$801/oz Au. The modest capital expense (CAPEX) nature of this project is reaffirmed with the estimated FS Initial CAPEX of US$28.2 million. 

Mining

Contract mining has been identified as the preferred mining method, and Pershing Gold has worked closely with several contract mining companies in order to identify the equipment, method and costs of opencast mining based on detailed contractor bids. The method of mining will be a drill, blast, load haul method typical for Nevada opencast mining. The truck fleet is expected to consist of thirteen 100-t trucks operating with three 992 loaders. Ore will be hauled to stockpiles ahead of the primary crusher where it will be blended and fed to the crusher as required. All of our plans to commence mining operations are contingent upon obtaining project financing for Relief Canyon.

Metallurgical Testing

The Relief Canyon ore deposit contains oxidised and partially oxidised gold mineral resources and reserves that historical mining experience indicates would be amenable to cyanide heap-leach processing. 

In 2015, 2016 and 2018, Pershing Gold conducted metallurgical test work on drill core and bulk samples to confirm heap-leach processing on resources and reserves that have been identified within the proposed pit.

The metallurgical test work was based on identifying three distinct alterations on cross-section, which have been named the Main, Lower, and Jasperoid Zones. 

Results from column leach testing demonstrate that the major Relief Canyon ore types contained in the Main, Jasperoid and Lower Zones, generally would be amenable to heap-leach cyanidation treatment. 

The column-leach and permeability tests also indicate that agglomeration is required in order to achieve hydraulic conductivity and a corresponding gold recovery on a consistent basis. There is also testwork showing that blending low and high fines content material will aid hydraulic conductivity. 

Exploration and Development Potential

Pershing has continued to conduct exploration and development drilling within and adjacent to the current FS resource model. core holes have been drilled to date, primarily in three areas:

• infill drilling within the North area along the proposed west edge of the FS reserve pit,
• extensional drilling southwest of the North area resource, and
• twin hole drilling within the Main zone mineralisation southwest of the historic South pit.

Drilling in the first two target areas is meant to upgrade the resource model, resulting in a potential enlargement of the FS reserve pit, and also extend the current mineral resource farther to the west and southwest. The Main zone drilling is twinning pre-Pershing reverse circulation drill holes to confirm and provide confidence in the resource model. Upon completion of the current drill programme, Pershing is planning on updating the resource model in 3Q18.

Drill results to date from eight infill holes in the first target area are on approximately 30% higher in gold grade than predicted within the resource model. According to the company, it is likely that these results would have a positive impact and should result in an enlargement of the current FS pit. 

Read the article online at: https://www.globalminingreview.com/exploration-development/31052018/positive-feasibility-study-for-pershing-golds-relief-canon-mine/