Improved Pea for Bravada's Wind Mountain Gold/silver Deposit, Nevada
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/01/12 -- Bravada Gold Corporation (TSX VENTURE: BVA)(FRANKFURT: BRT) ("Bravada") reported today the results of an updated, independent Preliminary Economic Assessment (PEA) for its Wind Mountain Gold/Silver Property in Washoe County, Nevada conducted by Mine Development Associates (MDA) of Reno. The base-case Internal Rate of Return (IRR) is nearly double the 2010 base- case IRR, and the number of ounces produced from near-surface oxide mineralization has increased significantly. The PEA considers only a portion of the property and mineralization contained within the North Hill deposit, the South End deposit, and previously mined "waste rock" was not included in the PEA.
The PEA assumes open-pit, contract mining with conventional trucks and shovels, run-of-mine leaching, and a base-case price of US$1,300 per ounce of gold and $24.42 per ounce of silver. The base-case economic model (1) is summarized below in US dollars and Imperial units (some values rounded):
Resource inside the pits = 42.1 million short tons of Indicated Resource @ 0.011 oz Au/t & 0.26 oz Ag/t, and 2.2 million short tons of Inferred Resource @ 0.008 oz Au/t & 0.18 oz Ag/t, both utilizing a 0.006 oz Au/t cutoff
Gold & Silver Ounces mined = 465,000 oz Au & 11,198,000 oz Ag (516,000 oz Au-eq(2)) Gold & Silver Ounces produced = 288,000 oz Au & 1,680,000 oz Ag (320,000 oz Au-eq(2))
Waste:Ore Strip ratio = 0.71:1
Capital = Initial capital of $45.4 million with $18.4 million sustaining capital
Mine Life = approximately 7 years of mining with 2 additional years of residual leaching & rinsing
Payback Period = 2.2 years Life-of-mine cash cost(3) = $859 per ounce Au Total Pre-Tax cost(3) = $1,080 per ounce Au IRR = 29%
Pre-tax NVP@5% = $42.9 million
(1) Canadian NI 43-101 guidelines define a PEA as follows: "A preliminary economic assessment is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied that would enable them to be classified as mineral reserves, and there is no certainty that the preliminary assessment will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability."
(2) Expected recoveries were incorporated to convert silver to gold equivalent (Au-eq) at 220Ag:1Au ($1,300 x 62% divided by $24.42 x 15%)
(3) Costs include estimated Nevada Net Proceeds taxes, property taxes, but not corporate income tax, and treats silver as a by-product credit.
Sensitivity studies by MDA indicate that gold and silver prices 30% higher in the same modeled pit and at the same recovery rates ($1,690/oz Au and $31.75/oz Ag) would increase the IRR to 74% and the NPV@5% to $136.2 million. Gold and silver prices that are 20% lower ($1,040/oz Au and $19.54/oz Ag) would result in the model being uneconomic at an NPV@5%. Sensitivities of the model to capital and operating costs are also provided by MDA, and are presented in the table below. MDA notes that additional studies such as additional metallurgical studies to evaluate crushing higher-grade portions of the deposit and grid drilling to delineate economic portions of the previously mined "waste rock", which are given no value in the current model, could further enhance the economics of known mineralization. Approximately 43% of the pre-mining strip in the PEA model consists of "waste rock", and MDA is optimistic that with further drilling and sampling a portion of this material's grade and tons could be quantified for economic evaluation.
President Joe Kizis commented, "The potential economics at Wind Mountain have increased dramatically at current metal prices, despite significantly higher capital and operating costs compared to those used in our 2010 PEA. In 2012, we plan to focus on the mine permitting process and on selective exploration drilling designed to add new exploration discoveries to the resource base of Wind Mountain. Specifically, we plan to test two undrilled areas where we believe extensive mineralization has been down-dropped by post-mineral faults and then covered by gravel. In addition, we have barely begun to explore the deeper sulphide potential of the property, where grades appear to be higher. The project has excellent logistics, is located in mining-friendly northwest Nevada, and, as the site of a past-producing mine, has no known conditions that could slow down the permitting process."
Mine Development Associates and Debra Struhsacker, Bravada's Environmental Permitting and Government Relations Consultant, compiled the technical report. Thomas Dyer, P.E. is a Senior Engineer for MDA and is responsible for sections of the technical report involving mine designs and the economic evaluation; Steven Ristorcelli, C.P.G., is a Principal Geologist for MDA and is responsible for the sections involving the Mineral Resource estimate; and Debra Struhsacker is responsible for the sections on environmental permitting. These are the Qualified Persons of the technical report for the purpose of Canadian NI 43-101, Standards of Disclosure for Economic Analyses of Mineral Projects.
A Technical Report covering both the updated PEA reported here and the updated resource reported on April 11, 2012 (see NR-06-12) will be filed with SEDAR within 45 days, as per NI-43-101 regulations.
Cash-Flow Sensitivity
Revenue
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NPV@5%, in thousands IRR Gold Price(i) Silver Price(i)
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-30% $ (50,466) NA $ 910 $ 17.09
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-20% $ (19,301) -8% $ 1,040 $ 19.54
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-10% $ 11,799 12% $ 1,170 $ 21.98
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Base $ 42,898 29% $ 1,300 $ 24.42
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+10% $ 73,997 44% $ 1,430 $ 26.86
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+20% $ 105,097 59% $ 1,560 $ 29.30
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+30% $ 136,196 74% $ 1,690 $ 31.75
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(i)Assumes no change in recovery
Operating Cost
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NPV@5%, in thousands IRR
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-30% $ 110,868 64%
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-20% $ 88,212 53%
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-10% $ 65,555 41%
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Base $ 42,898 29%
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+10% $ 20,241 17%
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+20% $ (2,415) 4%
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+30% $ (25,072) -11%
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Capital Cost
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NPV@5%, in thousands IRR
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-30% $ 60,750 50%
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-20% $ 54,799 42%
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-10% $ 48,849 35%
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Base $ 42,898 29%
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+10% $ 36,948 24%
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+20% $ 30,997 20%
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+30% $ 25,046 16%
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About Bravada Gold Corporation
Bravada Gold Corporation is a member of the Manex Resource Group of companies with an exploration office in Reno, from which it is exploring its extensive Carlin-type and low-sulfidation-type gold holdings strategically located within numerous productive gold trends in Nevada. Bravada is self funding its Wind Mountain property towards near-term production and is advancing its other properties with a combination of self funding and partner funding. Bravada also holds the Drayton Archean gold property in Ontario. Currently three of Bravada's 21 Nevada properties are being funded by partners. Homestake Resource Corporation (TSX VENTURE: HSR) owns 9.76% of Bravada's 114,264,282 outstanding common shares.
About Wind Mountain
The past-producing Wind Mountain gold/silver project is located approximately 160km northeast of Reno, Nevada in a sparsely populated region with excellent logistics, including county-maintained road access and a power line to the property. AMAX Gold/Kinross Gold recovered nearly 300,000 ounces of gold and over 1,700,000 ounces of silver between 1989 and 1999 from two small open pits and a heap-leach operation (reported data based on Kinross Gold files). Rio Fortuna Exploration (U.S.) Inc., a wholly owned US subsidiary of Bravada Gold Corporation, acquired 100% of the property through an earn-in agreement with Agnico-Eagle (USA) Limited, a subsidiary of Agnico-Eagle Mines Limited, which retains a 2% NSR royalty interest, of which 1% may be purchased for $1,000,000 at any time prior to commencement of production. The resource at Wind Mountain was updated on April 11, 2012 (see NR-06-12) and is summarized in the table below.
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oz oz gms gms
Tons Au/T Ag/T Tonnes Au/T Ag/T oz Au oz Ag
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Indicated resource
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Oxide at 0.005 oz Au/ton cut off
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58,816,000 0.010 0.25 53,372,051 0.343 8.6 564,600 14,539,000
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Mixed/Sulfide at 0.01 oz Au/ton cut off
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498,000 0.012 0.40 451,906 0.411 13.7 5,900 197,000
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Total 59,314,000 53,823,956 570,500 14,736,000
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Inferred resource
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Oxide at 0.005 oz Au/ton cut off
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19,866,000 0.006 0.17 18,027,223 0.206 5.8 125,200 3,443,000
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Mixed/Sulfide at 0.01 oz Au/ton cut off
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14,595,000 0.016 0.46 13,244,102 0.549 15.8 229,100 6,672,000
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Total 34,461,000 31,271,325 354,300 10,115,000
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Deborah H. Schneider, AIPG Certified Professional Geologist #11098, is the Qualified Person responsible for reviewing the technical results in this release.
On behalf of the Board of Directors of Bravada Gold Corporation
Joseph A. Kizis Jr., President and Director
Bravada Gold Corporation
For further information, please visit Bravada's website at www.bravadagold.com.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general economic conditions, interest rates, commodity markets, regulatory and governmental approvals for Bravada's projects, and the availability of financing for Bravada's development projects on reasonable terms. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, the timing and receipt of government and regulatory approvals, and continued availability of capital and financing and general economic, market or business conditions. Bravada does not assume any obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Bravada Gold Corporation
Liana Shahinian
604.641.2773 or Toll Free at 1.888.456.1112
liana@mnxltd.com
www.bravadagold.com