Euromax Resources Ltd. ("Euromax" or the "Company") is pleased to announce the results of the Pre-Feasibility Study ("PFS"), including a maiden Mineral Reserve, for its 100% owned Ilovitza gold-copper porphyry project in Macedonia. With an NPV of US$675 million the PFS demonstrates the economic robustness of the Ilovitza Project (the "Project"), building upon the significantly increased Mineral Resource announced 3 December 2013, as well as incorporating costs based on supplier quotes and engineering studies carried out to at least pre-feasibility industry standards.
PFS Highlights (based on US$1,250/oz Au and US$3.00/lb Cu)
- Maiden Total Probable Reserve of 225 million tonnes containing:
- 2.45 million ounces of gold
- 905 million pounds (411 thousand tonnes) of copper
- Total Sulphide Probable Reserve of 209 million tonnes at an average grade of 0.34 g/t Au and 0.20% Cu
- Total Oxide Probable Reserve of 16 million tonnes at 0.33 g/t Au
- Throughput of 10 million tonnes per annum and mine life of 23 years
- Conventional open pit with strip ratio of 0.7:1
- Average process recoveries of 86.5% gold and 84% copper
- Average annual payable production of 95,000 oz gold and 16,000 tonnes of copper
- World Gold Council defined Adjusted Operating Cash Costs of US$216/oz and All-In Costs of US$334/oz*
- Pre-tax NPV(5%) of US$675 million and Post-tax NPV(5%) of US$558 million
- Pre-tax IRR of 18.6% and Post-tax IRR of 16.5%
- Initial Capex US$502 million including contingency
- Distributable post-tax net cash flow of US$1.2 billion after capex
The PFS was produced by the following experts who worked with the Company's technical team:
- Tetra Tech – Geology, Resources, Mineral Processing and Engineering, Infrastructure, Hydrolgeology, Hydrology;
- ACA Howe International – Mining and Reserves, Mine Infrastructure;
- Faculty of Civil Engineering from St. Cyril and Methodius University of Skopje – Tailings
A detailed breakdown and discussion of the PFS results can be found in the Appendix and an independent NI 43-101 compliant technical report will be filed on SEDAR and the Company's website within 45 days of this announcement.
Project Advancement & Financing
The Company has established a Technical Advisory Committee ("TAC") of leading experts in their fields who will form the core of the owner's team to ensure efficient project execution and who will oversee the progression of the Project through full Feasibility Study/Front End Engineering Design ("FS/FEED") and into construction.
The recently announced sale of the Company's Bulgarian assets, the establishment of a Balkan focused exploration services company and corporate streamlining, has freed up management and financial resources to be wholly dedicated to the development of Ilovitza.
The Company is implementing its finance plan in two phases: Phase 1 to cover the FS/FEED costs and Phase 2 for the financing of the construction capex. Confidentiality agreements have been executed and due diligence is underway with several potential financing partners, contemplating an asset-based financing for Phase 1 to the start of construction.
Financing structures being considered include metal streaming and royalty arrangements. The agreed structure will be designed to ensure minimal shareholder dilution, whilst at the same time leveraging the asset value, so as to neatly dovetail into the Phase 2 financing of construction scheduled to commence in 2016. Further, with the completion of the PFS, the Company is now able to engage with certain banking counterparties to initiate due diligence for a Project Financing to fund Phase 2, the construction.
Commenting on the results of the PFS, Pat Forward, Chief Operating Officer, said: "Following the work carried out in 2013 to define the expanded Mineral Resource, we are pleased that our PFS on the Ilovitza Project has defined a financially attractive operation based on a robust study, more than justifying the next steps in project development. We are now in an excellent position to build on this as we continue with our full feasibility work and then the front end engineering and continue to establish our owner's team to fulfil our ambition to build and operate the first major modern mine in Macedonia."
Commenting on the results of the PFS, Steve Sharpe, President & CEO, said: "Despite incredibly challenging mining equity markets that have seen a decline in the market value of our Company despite the significant increase in the asset value of Ilovitza, it is particularly rewarding to be able to now publicly demonstrate the exceptionally robust economics of the Ilovitza Project. This is a massively important project for Macedonia, and as one of the few permitted mining projects in Europe, will dramatically enhance the economic profile of the country. The overwhelming local, national, and indeed supranational support for the project places us in the enviable position of certainty of development. Our immediate task is for the management team to deliver the implementation of a minimally dilutive financing package and the management of the DFS/FEED process to ensure the start of construction in 2016 and first production in 2017. These areas are exactly where our strongest skill sets and track records lie."
Conference Call
The Company will be hosting a conference call and question and answer session to discuss the results of the PFS on Friday 6th June, 2014 at 10 am EST / 3pm BST. A new presentation will be uploaded to the Company's website in advance of the call. To participate in the call, please dial:
- United Kingdom: 020 3139 4830 or UK Toll-Free Number: 0808 237 0030
- Canada: 1 514 841 2196 or Canada Toll-Free: 1 866 404 5783
- United States: 1 718 873 9077 or US Toll-Free Number: 1 866 928 7517
- Participant pin code: 76848541#
Notes:
* Adjusted Operating Cash Costs and All-In Costs as defined by the World Gold Council which assumes copper as a by-product and includes US$1.8M corporate G&A.
Qualified Person
Mr Patrick Forward, FIMMM, a Qualified Person under National Instrument 43-101 Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators and COO of the Company, reviewed and approved the scientific or technical disclosure in this release and has verified the data included.
Source: http://www.euromaxresources.com