Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 10 of 67

REGIONAL NEWS - U.S. & CANADA MARCH 2019 • E&MJ 9 "This is the largest permit we have obtained in terms of size and scope, and we are excited about the prospect of a comprehensive drill test of the Black Pine gold system starting in Q2 2019," Liber- ty Gold Vice President of Exploration and Geoscience Moira Smith said. "We were impressed with the timeliness and profes- sionalism of the U.S. Forest Service (USFS) Sawtooth National Forest-Minidoka Ranger District throughout the process of produc- ing the Environmental Assessment and adhering to all of the timelines and mile- stones necessary to permit this project. "There are very few opportunities left in the Great Basin with multi-kilometer-scale oxide gold targets containing hundreds of gold-bearing drill holes, surrounded by undrilled gold-in-soil anomalies." In May 2017, Liberty Gold submitted an application for a new plan of opera- tions to the U.S. Forest Service (USFS) and worked diligently with the USFS and Stantec Consulting Services Inc. to com- plete wildlife, archaeological and other surveys to assist in producing a new plan of operations and comprehensive environ- mental assessment. The USFS issued a Finding of No Significant Impact on De- cember 12, 2018, and approved Plan of Operations on February 12. Liberty Gold acquired Black Pine in 2016. Weather and snow conditions permit- ting, drilling is expected to commence in the second quarter of 2019, and continue through early November. Approximately 16,000 m to 20,000 m of reverse circula- tion drilling in 80 to 100 holes is planned. Pure Gold to Develop Madsen Project Pure Gold Mining has reported results from an independent feasibility study of its 100% owned, previously mined Madsen gold pro- ject in the Red Lake mining district of Ontar- io. The study outlines a robust, high-grade, 800-metric-ton-per-day (mt/d) underground mining operation with low, initial capital cost and strong financial performance. The study is based on probable min- eral reserves of 3.5 million mt grading 9 grams/mt and containing 1 million ounc- es (oz) of gold. Initial capital to develop the project is estimated at C$95 million, including a 9% contingency. Mine life is planned at 12.2 years, with a 13-month preproduction period. Assuming project execution starts in April, first gold pro- duction could occur in May 2020. Gold production would average ap- proximately 102,000 oz per year in years three through seven of operations and 80,000-oz/y life-of-mine. Life-of-mine all-in sustaining cash costs are estimated at $787/oz of gold recovered. The pay- back period is estimated at three years. The Madsen project benefits from sig- nificant mining, milling and tailings infra- structure already in place. Mining will be conducted from new ramp development, utilizing a combination of cut-and-fill and longhole mining methods. A new hoist house and double-drum production hoist will use the existing shaft infrastructure to hoist ore and waste from the mine, be- ginning in year four of operations. A mining recovery of 95% and dilution of 10% are assumed for mined material. Ramp and level waste development would be performed by an owner-operated fleet of one-boom and two-boom electric-hydrau- lic drill jumbos, LHDs with 3-m 3 buckets, 20-mt haul trucks, scissor-lift bolters, and other rubber-tired support equipment. Mining will be facilitated by a com- bination of diesel and battery-powered equipment, with diesel equipment being utilized in the upper levels of the mine prior to refurbishment of the shaft and installation of the new production hoist. The use of battery-powered equipment in the mine will eliminate emissions associ- ated with the movement of ore and waste and will result in materially reduced ven- tilation and heating requirements. The existing mill and tailings manage- ment facility will be upgraded to achieve mill throughput of 800 mt/d. The plant will include one stage of crushing and two stages of grinding to achieve a final grind size of 75 microns. Based on recent met- allurgical test work, the optimized flow- sheet will include gravity concentration, cyanide leach, carbon adsorption/desorp- tion, and electrowinning, with an overall recovery of 96%. The product from elec- trowinning will be refined in an induction furnace to produce gold doré bars. Leached slurry from the carbon-in- pulp circuit will be treated using the SO2/ Air cyanide destruction process, and final tailings will be processed and utilized un- derground as hydraulic fill or pumped to the tailings management facility. JDS Energy and Mining Inc. led the Madsen project feasibility study, with contributions from Knight Piésold, Nord- min Engineering, MineFill Services, Inte- grated Sustainability, Lorax Environmen- tal Services, Ginto Consulting, and Equity Exploration Consultants. Osisko Closes Silver Stream Transaction With Falco Resources Osisko Gold Royalties Ltd. announced the closing of its previously announced senior-secured silver stream facility with reference to up to 100% of the future sil- ver produced from the Horne 5 property located in Rouyn-Noranda, Québec, from Falco Resources Ltd. Osisko will purchase up to 100% of the refined silver from the project. Osisko will pay Falco staged up- front-cash deposits of up to C$180 mil- lion plus ongoing payments equal to 20% of the spot price of silver on the day that refined silver is delivered, to a maximum of US$6 per ounce of refined silver. On closing of the Silver Stream, Osisko has funded the first deposit of C$25 million net of C$23.4 million representing the C$20 million principal amount of loans from Osisko to Falco entered into in May 2016 and September 2018 and accounts payable by Falco to Osisko, resulting in a cash outlay of C$1.6 million to Falco. "We are pleased to conclude this im- portant financing with Falco to continue the development of the Horne 5 project," Chair and CEO Sean Roosen said. "The addition of the silver stream on Horne 5 brings in a new generation of assets that have the potential to become anchor assets within Osisko's royalty and stream portfolio." Falco and Osisko have also reached an agreement to settle interest owed under each of the May 2016 and Sep- tember 2018 loans through the issuance of 5,353,791 common shares of Falco at a deemed price of C$0.34 per share. Completion of the Shares for Debt Set- tlement is subject to Falco obtaining necessary regulatory approvals, includ- ing acceptance of the TSX Venture Ex- change. The Horne 5 Project Horne 5 is a development-stage project located in Rouyn-Noranda, Québec. Horne 5 is located in the former Horne mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of cop- per. Falco completed a feasibility study for the project in 2017. Falco is currently in the permitting process and working on obtaining all third-party approvals to ad- vance project construction.

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