Velocity Announces Preliminary Economic Assessment for the Rozino Gold Project, Southeast Bulgaria
VANCOUVER, British Columbia, Sept. 17, 2018 (GLOBE NEWSWIRE) -- Velocity Minerals Ltd. (TSXV: VLC) (“Velocity” or the “Company”) announces the results of an independent Preliminary Economic Assessment (“PEA”) on its Rozino gold project (“Rozino” or the “Project”) located in southeast Bulgaria. The PEA provides a base case assessment of developing the Project by open pit mining and gold recovery by a combination of on-site preconcentration in a flotation plant (“Flotation Plant”) and further processing in an existing operating carbon-in-leach plant (“CIL Plant”) located in Kardzhali, 85km by road from Rozino. Saleable gold doré will be produced at Kardzhali. The PEA financial model returns an after-tax NPV5% of $129 million and an after-tax internal rate of return (“IRR”) of 33.1%.
Rozino is located within the Tintyava prospecting license, an exploration property in which Velocity has an exclusive right to acquire a 70% interest by delivering the PEA report to the underlying property owner, Gorubso Kardzhali A.D. (“Gorubso”), in the coming weeks.
“We have achieved our goal of advancing Rozino from discovery and exploration drilling through to this positive economic assessment in just over one year. On delivery of the PEA, the Company will have earned its 70% interest in the Project and will move forward towards a prefeasibility study in joint venture with our partner Gorubso,” commented Keith Henderson, Velocity’s President & CEO. “We believe that there is significant potential for resource expansion at Rozino and additional exploration drilling is expected to be completed over the coming months in tandem with infill drilling of the existing mineral resource.”
Mr. Henderson continued, “The work completed at Rozino represents an important first step in Velocity’s strategy to explore and develop multiple satellite deposits for processing in the existing centrally located CIL Plant. The Company is completing due diligence on other advanced properties located within the exploration and mining alliance area, with a view to earning 70% interests through additional option agreements with Gorubso. The aim is to build a multi-asset production profile that maintains annual production of more than 100,000 ounces of gold over a period in excess of 10 years.”
- After-Tax Financials: After-tax NPV5% of $129 million and after-tax IRR of 33%
- Cash Cost: All-in sustaining cost2 of US$543 per ounce
- Annual Gold Production: Steady state3 annual production of 65,000 ounces, peak annual production of 78,000 ounces
- Capital Costs: Total estimated capital costs of $97.6 million (includes contingency)
- Sustaining Capital: Low estimated sustaining capital of $6.3 million
- Mining: Open pit with 0.6 g/t gold Cut-Off Grade (COG), attractive strip ratio of 2.5 and 1.51 g/t Life of Mine (“LOM”) gold grade
- Processing: On-site flotation producing gold bearing pyrite concentrate assaying 30 g/t and transportation to the CIL Plant (located 85 km from the Project) for processing
- ROCE: Return on capital expenditure of 3.3
Rozino Development: Mine Site to Payable Gold
The PEA provides a base case assessment of developing Rozino by open pit mining, on-site crushing, milling and simple flotation to produce a 30 g/t gold concentrate. The concentrate would then be trucked 85km on existing roads to the currently operating CIL Plant where saleable gold doré would be produced.
In addition to returning positive economic results, this assessment also provides significant benefits, including shortened permitting timelines and capital cost reductions for the following reasons:
- the existing CIL Plant and tailing management facility (“TMF”) are fully permitted, currently operational, and have sufficient capacity to process concentrate from Rozino
- the use of the existing CIL Plant reduces total capital cost requirements
- development on-site at Rozino only requires permitting for mining, preconcentration and disposal of relatively benign waste products
The engineering work leading to the PEA economic results presented here included a range of development scenarios, which will be documented in the upcoming PEA.
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