TORONTO - Maritime Resources Corp. (TSX.V: MAE) ('Maritime' or the 'Company') is pleased to announce feasibility study (the 'Feasibility Study') results for the 100% owned Hammerdown Gold Project ('Hammerdown' or the 'Project') in the Baie Verte mining district of Newfoundland and Labrador, Canada. The Feasibility Study supports a technically straightforward, brownfields open pit mine and gold processing operation benefiting from low capital investment and rapid payback. The attractive financial return profile enables the Company to pursue mine life extensions, and follow-up on exciting exploration opportunities within Maritime's 400 km2 land package in the Baie Verte mining district. Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars.
Garett Macdonald, President and CEO, commented, 'The completion of the Hammerdown Gold Project Feasibility Study is a positive step forward for the Company and positions Hammerdown as one of the highest return, highest grade open pit development projects located in a top tier jurisdiction with tremendous exploration upside. We view Hammerdown as a great starter mine for the Company with an average of 50,000 ounces of annual gold production and $41.4M of annual free cash flow ('FCF'). Permitting is well advanced with the Project released from provincial Environmental Assessment in 2021. Future mineral processing is planned through the existing gold circuit at the Nugget Pond mill facility. The Project is also projected to be a major contributor to the socio-economic well being of the Baie Verte-Green Bay district and central Newfoundland. There is excellent potential to add to the Project's mine life through near-mine exploration along a 5 km magnetic low trend that has been identified adjacent to the Hammerdown deposit and also the nearby Orion deposit. Our next drill program will focus on this area, targeting shallow open-pit mineralization with the potential to be brought into the mine plan in the future.'
Open pit mine with run of mine ('ROM') grade of 4.46 grams per tonne ('gpt') Au, life of mine ('LOM')
On-site crushing and sorting plant producing 700 tonnes per day ('tpd') of mill feed grading 6.76 gpt Au
Mineral processing at Maritime's 700 tpd gold circuit at the Nugget Pond mill facility
LOM payable gold production of 247,000 oz, averaging 50,000 ounces annually
$102.8M after tax net present value ('NPV') (5% discount) with 48.1% internal rate of return ('IRR'), 1.7 year payback at US$1,750/oz base case gold price (three year trailing average)
$75.0M estimated initial capital cost with $4.9M in net sustaining capital
US$912/oz gold all-in sustaining cost ('AISC')
Several near-mine exploration opportunities to grow resources and extend mine life
The Feasibility Study contemplates open pit mining from the Hammerdown deposit, including the higher grade narrow Hammerdown veins and the thicker, lower grade Wisteria zone. The Hammerdown mine is designed as a conventional truck and shovel open pit operation with one year of pre-production stripping and five years of subsequent mining. ROM ore from Hammerdown would be sent to the on-site crushing and ore sorting plant to produce the mill feed product that would be hauled to the Company's gold circuit at the Nugget Pond mill for final processing. Current mineral resources contained within the Orion deposit have not been considered as part of the Hammerdown Feasibility Study and remain subject to ongoing exploration, environmental and technical studies.
A total of 1.895 million tonnes of ROM ore is scheduled to be mined from the Hammerdown pit with a diluted grade averaging 4.46 gpt Au. A total of 38.5 million tonnes of non-acid generating waste rock will also be produced and stored in a waste rock stockpile to the south of the open pit.
The open pit has been designed and scheduled to maximize project rate of return. Pit slope optimization has been undertaken based on geotechnical data collected between 2019 and 2021. Hammerdown's open pit development consists of three phases of pushbacks with overburden thickness averaging under 2-metres ('m'). Mining will be completed by conventional drill / blast / load / haul methods on 5-meter benches in ore and 10-m benches in waste where practical. Waste loading and haulage will be handled by 7-m3 hydraulic excavators and 55-tonne payload haul trucks. Ore loading and hauling will be handled by a fleet of 4-m3 hydraulic excavators with a 7-m3 front end loader as backup and 38-tonne payload articulated haul trucks.
Grade control in the open pit is a key part of the mining process and will be accomplished through a combination of 5 metre bench heights, 50,000 m of close spaced diamond drilling (15 m centres, 10 m vertically) to identify and report vein orientations and grades to the mine planners, selective excavation under GPS control, and mine geological control. The ore sorting process is integrated to remove dilution taken with the narrow veins during the mining process.
As a brownfields gold project, Hammerdown has a history of high gold recoveries through an industry standard carbon-in-pulp leaching circuit at the Nugget Pond mill. Between 2000-2004 Richmont Mines processed 291,400 tonnes of ore grading 15.8 gpt Au from Hammerdown at Nugget Pond. Recoveries averaged 97% with a total of 143,000 ounces of gold produced during this time. In 2021 Maritime acquired the gold circuit at Nugget Pond from a subsidiary of Rambler Metals and Mining PLC (see press release dated April 13, 2021).
The Feasibility Study's approach to mineral processing includes a crushing and ore sorting stage at the Hammerdown mine site to remove dilution and concentrate the ROM ore into a high-grade feed product for the mill. This product would be hauled 140 km to the Nugget Pond mill for final mineral processing including grinding, thickening, carbon in pulp leaching, refining to dore bars and disposal of tailings.
The crushing and sorting plant at Hammerdown is designed for 1,200 tpd of ROM feed with an ultimate capacity of 1,800 tpd, providing significant over-capacity to allow operating flexibility. ROM feed would go through primary and secondary crushing stages to produce a 50mm minus product. A three-deck screening plant would convey the fine fraction (minus 12mm) to the ore storage building and two separate coarse size fractions to two ore sorters operating in parallel. Sorter No.1 would receive a 12-25mm size fraction and sorter No. 2 would receive the 25-50mm size fraction. X-ray transmission ('XRT') sorting with compressed air would be used to concentrate the ore containing sulphides, separating it from the inert waste rock dilution taken during the mining process. The sorting process has been designed to operate without the use of water, relying on X-ray sensing and compressed air to separate the ore from the waste. Sorted product material would be conveyed to a final tertiary crushing stage to reduce the product to 12mm minus and stockpiled in the ore storage building. Sorted reject material would be stockpiled and back hauled to a storage pile for long term closure. Metallurgical test work supporting the design of the plant was completed on several bulk samples of Hammerdown mineralization at two different manufacturer's facilities. On average, a crushing and sorting rejection rate of 40% is expected with gold recovery of 95.0%.
At the Nugget Pond mill, the sorted product from Hammerdown is planned to be processed at a rate of 700 tpd. Highway haulage trucks carrying 30 tonne payloads will offload at Nugget Pond via an automated truck unloader that will convey the material to a covered stockpile. Reclaim feeders will transfer the fine ore to the grinding circuit, consisting of a 10.5' x 21' x 1,000 hp ball mill and a 450 hp vertical grinding mill to achieve a final P80 grind size of 50 microns. Post grinding the slurry would proceed through the existing carbon in pulp leach ('CIP') circuit to produce gold dore bars and a tailings product that would be deposited in the existing tailings management area. Gold recovery through the Nugget Pond gold circuit is estimated to be 95.5%. All metallurgical test work was conducted at Blue Coast Labs under the direction of Canenco Consulting Inc.
Capital costs have a basis of estimate at Class 3 (FEL3) with a stated -15%/+30% accuracy (after the Association for the Advancement of Cost Engineering International) and are stated in Q2 2022 Canadian dollars.
Capital cost contingency has been allocated on scopes of work. The combined contingency for all scopes of work is equivalent to 20% of direct costs, excluding mining equipment and pre-stripping. More than 82% of equipment costs, bulk materials and labour rates are estimated with budget quotes from vendors. The remaining 18% of costs are estimated from consultant databases on precedent projects, or from factoring such items as freight and construction indirect costs from supply pricing.
Mine equipment is assumed to be acquired through a combination of leasing for most production and support equipment, rentals for pioneering drills, and purchase of some support equipment.
The initial capital cost, including contingency, is estimated at $75.0M and net LOM sustaining capital cost is estimated at $4.9M, net of closure costs and salvage values for major equipment, for a total capital cost of $80.0M.
Maritime holds a 100% interest- directly and subject to option agreements entitling it to earn 100% ownership- in the Green Bay Property. This includes the former Hammerdown gold mine and the Orion gold project plus the Whisker Valley exploration project, all located in the Baie Verte Mining District near the town of King's Point, Newfoundland and Labrador. The Hammerdown Gold Project is characterized by near-vertical, narrow mesothermal quartz veins containing gold associated with pyrite. Hammerdown was last operated by Richmont Mines between 2000 and 2004. The Company also owns the gold circuit at the Nugget Pond metallurgical facility in Newfoundland and Labrador, the Lac Pelletier gold project in Rouyn Noranda, Quebec and several other exploration properties in key mining camps across Canada.
Garett Macdonald, MBA, P.Eng.
1900-110 Yonge Street, Toronto, ON M5C 1T4
Caution Regarding Forward Looking Statements:
Certain of the statements made and information contained herein is 'forward-looking information' within the meaning of National Instrument 51-102 - Continuous Disclosure Obligations. Forward-looking statements are often identified by terms such as 'will', 'may', 'should', 'anticipate', 'expects', 'intends', 'indicates' 'plans' and similar expressions. Forward-looking statements include statements concerning the low capital intensity and rapid payback of the Project, the exploration upside relating to the Project, the pursuit of mine life extensions, the potential to increase mineral resource and mineral reserve estimates, returns and FCF relating to the Project, capital financing processes relating to the Project, development of the next drill program on the Project, exploration and development of the Orion deposit, ROM ore scheduled to be mined from the Project, timing of submission of the Project Development Plan and the Progressive Rehabilitation and Closure Plan for Hammerdown, timing of future site construction, timing to first gold production, length of construction period for the Project, timing of completion of required permitting, timing for approvals to be obtained for the closure and development plans relating to the Project, availability of capital financing, the non-equity portion of any construction capital financing, timing of completion of construction capital financing process, amongst other things, which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. All forward-looking statements and forward-looking information are based on reasonable assumptions that have been made by the Company in good faith as at the date of such information. Such assumptions include, without limitation, the price of and anticipated costs of recovery of, base metal concentrates, gold and silver, the presence of and continuity of such minerals at modeled grades and values, the capacities of various machinery and equipment, the use of ore sorting technology will produce positive results, the availability of personnel, machinery and equipment at estimated prices, mineral recovery rates, and others. Forward-looking information is subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking information, including, without limitation, the ability of the Company to continue to be able to access the capital markets for the funding necessary to acquire, maintain and advance exploration properties or business opportunities; global financial conditions, including market reaction to the coronavirus outbreak; competition within the industry to acquire properties of merit or new business opportunities, and competition from other companies possessing greater technical and financial resources; difficulties in advancing towards a development decision at Hammerdown and executing exploration programs at its Newfoundland and Labrador properties on the Company's proposed schedules and within its cost estimates, whether due to weather conditions, availability or interruption of power supply, mechanical equipment performance problems, natural disasters or pandemics in the areas where it operates; increasingly stringent environmental regulations and other permitting restrictions or maintaining title or other factors related to exploring of its properties, such as the availability of essential supplies and services; factors beyond the capacity of the Company to anticipate and control, such as the marketability of mineral products produced from the Company's properties; uncertainty as to whether the acquisition of assets and new mineral property interests including the Nugget Pond gold circuit will be completed in the manner currently contemplated by the parties; uncertainty as to whether mineral resources will ever be converted into mineral reserves once economic considerations are applied; uncertainty as to whether inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied; government regulations relating to health, safety and the environment, and the scale and scope of royalties and taxes on production; and the availability of experienced contractors and professional staff to perform work in a competitive environment and the resulting adverse impact on costs and performance and other risks and uncertainties, including those described in each MD&A of financial condition and results of operations. In addition, forward-looking information is based on various assumptions including, without limitation, assumptions associated with exploration results and costs and the availability of materials and skilled labour. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, Maritime undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.
(C) 2022 Electronic News Publishing, source ENP Newswire