Gold Bull Resources Corp. (TSXV: GBRC) has reported the completion of its Sandman Preliminary Economic Assessment (PEA) Phase 2 Study at its 100% owned Sandman Project located in Humboldt County, Nevada, USA.
The Sandman Scoping Phase 2 Study has identified a stand-alone, low pre-production capital US$29M, conventional heap leach gold project producing circa 35,000 to 40,000 ounces of gold per year for nine years. The project boasts an excellent Internal Rate of Return (IRR) at 101% and a pre-tax payback period of 1.1 years, using a conservative gold price of US$1800.
The Scoping Phase 2 Study focused on mining gold mineralized material within optimized pit shells in two phases: Phase 1 mines all mineralized material within the pit shell above the water table and this Phase 2 study focused on mineralized material below the water table and within the pit shell, after completion of additional monitoring, permitting and dewatering efforts paid by mine cashflow, thereby reducing initial capital and completed during the above water table mining process.
The benefit of this two-phase approach, is enabling sufficient time and mine sourced funding to continue to close out existing mineral resources, discover additional gold resources, and enable sufficient time to conduct the below water table mine studies and permitting, all paid from Sandman Project mine revenues. The model is organic growth and non-shareholder dilutive.
The Study highlights include:
Production rate average of 2.2Mtpa for a nine-year operation
35,000-40,000oz of gold per annum produced from conventional heap leach
At US$1,800/oz gold price:
IRR of 101% (pre-tax)
NPV 6% US$145 M (pre-tax)
Payback period of 1.1 years (pre-tax)
Average grade 0.73g/t gold
LOM low strip ratio of 2.2:1
Phase 1 Initial pre-production Capital $29M and Phase 2 Capital US$20M paid by Phase 1 mining revenues. Total LOM capital US$49.2M, including working capital US$4.5M
LOM Operating cost of US$17.22 per tonne
All in Sustaining Cost (AISC) of US$1,204/oz of gold
This Scoping Phase 2 Study focused on the efficient extraction of all mineralized material within an optimized pit shell in a sequence that facilitates effective use of initial pre-production capital and a more rapid mine commissioning. This Scoping Phase 2 Study will be a preliminary economic assessment, under NI 43-101 requirements, and will be filed on SEDAR within 45 days.
“Sandman provides Gold Bull with a low-cost and moderate mine life start-up opportunity. In our Phase 1 PEA we only examined the oxide gold located above the water table, to enable a rapid timeline for mine commissioning and limited the initial pre-production capital,” CEO, Cherie Leeden, said.
“This Phase 2 scoping study focussed on extending the mine life from 5 years to 9 years while utilising mine cashflow for Phase 2 development. The intent is to be mining, developing, and discovering additional ounces at the project utilizing mining cashflow. Excellent exploration potential exists at Sandman.
“The known gold resources at Sandman remain open, therefore this PEA is the most conservative base case done using only our pit constrained ounces at a gold price of US$1800. If we were to use today’s gold price of circa $2000, it pushes our NPV from US$145M to US$189M, and our IRR from 101% to 123%. Sandman is most sensitive to the gold price.”
For further information please visit: https://goldbull.ca/