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Benton, Nordmin to Initiate Diamond Drill Program at Cape Ray Gold Project in Ontario

Benton Resources Inc. and its joint venture partner Nordmin Engineering Ltd., are pleased to announce that they will be initiating a 5000 metre diamond drill program commencing in early to mid-August.

The drilling is designed to infill and expand the 51 and 41 deposits to potentially increase and provide better confidence in the current resources in preparation for feasibility studies. In addition, Nordmin has notified Benton that it has submitted the project environmental description and registration report to the government of Newfoundland and Labrador Environment and Conservation Environmental Assessment Division located in St. John's for review. Earlier this year (see PR March 07, 2016) Benton and Nordmin released the results of a positive preliminary economic assessment ("PEA") for their Cape Ray gold project, located approximately 20km northeast of Port aux Basque, Newfoundland. The results of the PEA include a pre-tax net present value ("NPV") at a 7% discount rate of $48.4 million with a pre-tax internal rate of return ("IRR") of 29% and a post-tax NPV at a 7% discount rate of $32.6 million with a post-tax IRR of 24%.

The PEA is based on the mineral resource estimate completed by Sibley Basin Group Ltd. in the National Instrument 43-101 report dated April 29, 2015 entitled "Mineral Resource Estimate Technical Report For The Cape Ray Property,04,41,51 and Windowglass Hill Deposits, Isle aux Morts Area, Newfoundland and Labrador, Canada".

Highlights from the PEA, with the base-case gold price of $1,200 (U.S.) per ounce and an exchange rate of $1.25CDN/USD, are as follows (all figures in Canadian dollars unless otherwise stated):

  • Pre-production Capital is $47.3 million with a contingency of $4.7 million included within the initial Capital. Pre-production is for a 2 year period.
  • Sustaining Capital of $33.7 million for the Life of Mine ("LOM").
  • Pre-tax NPV(7%) of $48.4 million and internal rate of return of 29%.
  • Post-tax NPV(7%) of $32.6 million and internal rate of return of 24%.
  • Pre-tax Net Revenue of $88.4 million over 6 year LOM.
  • Post-tax Net Revenue of $63.4 million over 6 year LOM.
  • Positive Cash-flow is realized in year 3.
  • 1,700,000 tonnes of mill feed averaging a combined 4.6 g/t gold and 4.8 g/t silver.
  • Mill operates at average tonnage of 851 tonnes per day.
  • Total production of 250,000 ounces of gold and 260,000 ounces of silver.
  • Gold recovery of 97% and Silver recovery 45%.

The reader should be cautioned that the PEA is preliminary in nature. It contains inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The current drill campaign will help bring some of the inferred resources into indicated which will help with the confidence level of the project as it moves towards the feasibility stage.

Source: http://www.bentonresources.ca/

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