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
---------------------------------------------------------------------
NPV@5%, in thousands IRR Gold Price(i) Silver Price(i)
---------------------------------------------------------------------------
-30% $ (50,466) NA $ 910 $ 17.09
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-20% $ (19,301) -8% $ 1,040 $ 19.54
---------------------------------------------------------------------------
-10% $ 11,799 12% $ 1,170 $ 21.98
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Base $ 42,898 29% $ 1,300 $ 24.42
---------------------------------------------------------------------------
+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
---------------------------------
NPV@5%, in thousands IRR
---------------------------------------
-30% $ 110,868 64%
---------------------------------------
-20% $ 88,212 53%
---------------------------------------
-10% $ 65,555 41%
---------------------------------------
Base $ 42,898 29%
---------------------------------------
+10% $ 20,241 17%
---------------------------------------
+20% $ (2,415) 4%
---------------------------------------
+30% $ (25,072) -11%
---------------------------------------
Capital Cost
---------------------------------
NPV@5%, in thousands IRR
---------------------------------------
-30% $ 60,750 50%
---------------------------------------
-20% $ 54,799 42%
---------------------------------------
-10% $ 48,849 35%
---------------------------------------
Base $ 42,898 29%
---------------------------------------
+10% $ 36,948 24%
---------------------------------------
+20% $ 30,997 20%
---------------------------------------
+30% $ 25,046 16%
---------------------------------------
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.
----------------------------------------------------------------------------
oz oz gms gms
Tons Au/T Ag/T Tonnes Au/T Ag/T oz Au oz Ag
----------------------------------------------------------------------------
Indicated resource
----------------------------------------------------------------------------
Oxide at 0.005 oz Au/ton cut off
----------------------------------------------------------------------------
58,816,000 0.010 0.25 53,372,051 0.343 8.6 564,600 14,539,000
----------------------------------------------------------------------------
Mixed/Sulfide at 0.01 oz Au/ton cut off
----------------------------------------------------------------------------
498,000 0.012 0.40 451,906 0.411 13.7 5,900 197,000
----------------------------------------------------------------------------
Total 59,314,000 53,823,956 570,500 14,736,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Inferred resource
----------------------------------------------------------------------------
Oxide at 0.005 oz Au/ton cut off
----------------------------------------------------------------------------
19,866,000 0.006 0.17 18,027,223 0.206 5.8 125,200 3,443,000
----------------------------------------------------------------------------
Mixed/Sulfide at 0.01 oz Au/ton cut off
----------------------------------------------------------------------------
14,595,000 0.016 0.46 13,244,102 0.549 15.8 229,100 6,672,000
----------------------------------------------------------------------------
Total 34,461,000 31,271,325 354,300 10,115,000
----------------------------------------------------------------------------
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.
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