Gold Standard Ventures Corp. (NYSE AMERICAN: GSV) (TSX: GSV) (“Gold
Standard” or the “Company”) is pleased to provide the results of a
robust Feasibility Study on its 100%-owned South Railroad Project
located in Elko, Nevada. The Feasibility Study supports a
technically straightforward open pit mine and run-of-mine heap
leach operation with low capital intensity providing rapid payback
and a peer leading financial return profile which enables the
Company to pursue mine life extensions, seek to expand Mineral
Reserves and Mineral Resources, and pursue exciting exploration
opportunities within Gold Standard’s +21,000-hectare land package
on the prolific Carlin Trend.
Jason Attew, President and CEO, commented, “The
completion of the South Railroad Project Feasibility Study is a
tremendous achievement for the Company, representing the
culmination of great work by the Gold Standard team and its various
consultants. The study positions SRP as one of the highest return,
quickest payback development projects in a premier jurisdiction.
The mine plan outlines robust free cash flow generation,
specifically in the first four years as we mine the Dark Star pit.
At spot gold price SRP is estimated to generate free cash flow of
$130M per annum over the first four years, which will provide
flexibility to increase exploration across our vast land package,
invest in value accretive operational excellence initiatives, and
strengthen the corporate balance sheet. Our focus now shifts to
continuing to advance our permitting application and kicking off
our construction capital financing process, both of which will
continue to de-risk the project and add value for
shareholders.”
South Railroad Project Feasibility
Study
Table 1. Feasibility Study Summary Statistics at
Base Case Gold Price.
Item |
Unit |
First 4 Years |
Total |
Operating Life |
years |
|
10.5 |
Total Ore Tonnes Mined |
kt |
|
65,199 |
Total Waste Tonnes Mined |
kt |
|
267,179 |
Strip Ratio |
waste:ore |
|
4.10 |
|
|
|
|
Gold Grade |
g Au/t |
|
0.77 |
Gold Recovery Rate |
% |
|
65% |
Gold Produced |
koz |
608 |
1,031 |
Average Annual Gold Production |
koz |
152 |
124 (1) |
|
|
|
|
Mining Cost (incl. pre-strip) |
$/tonne moved |
|
1.92 |
Processing & Water Treat. Cost |
$/tonne processed |
|
2.26 |
G&A |
$/tonne processed |
|
0.58 |
Cash Costs |
$/oz (net of by-product credit) |
703 |
792 |
AISC |
$/oz (net of by-product credit) |
949 |
1,021 |
|
|
|
|
Total Initial Capital (2) |
$M |
|
190 |
Total Sustaining Capital (3) |
$M |
|
197 |
|
|
|
|
Average Annual Free Cash Flow |
$M |
98 |
70 (1) |
After-Tax NPV5 |
$M |
|
315 |
After-Tax IRR |
% |
|
44% |
Payback Period |
years |
|
1.9 |
(1) Average based on the eight years in which mining and
stacking of ore both occur. Excludes pre-production and residual
leach years of operation.
(2) Assumes equipment financing for primary mining
equipment and power generators.
(3) Includes closure and salvage costs.
Further Project
Opportunities
Several opportunities exist for further
improvements to project economics:
- Pinion SB Zone: A strong possibility remains
to further expand of the size of the Pinion open pit based on
drilling results from the SB Zone. Work to date, combined with the
results from the 2022 drilling campaign will be incorporated into
an updated Mineral Resource estimate for Pinion to be released near
the end of 2022.
- Toll Processing: In the 2020 South Railroad
Project Pre-Feasibility Study (“2020 PFS”), approximately 32,000
ounces of contained gold in sulphide ore was assumed to be toll
processed at facilities in Nevada. At a $1,650 per ounce gold price
assumption, this material contributed approximately $32 million in
additional pre-tax free cash flow to the main oxide gold project
outlined in the 2020 PFS. In the current Feasibility Study, this
material is assumed to be mined but not processed. Discussions with
external sulphide processing facilities in Nevada will commence in
due course and the Company remains confident it will realize
incremental value for this material.
- Rapid Infiltration Basin: The Feasibility
Study includes approximately $11 million in capital expenditures
and approximately $10 million in operating expenditures for water
treatment. An opportunity exists in utilizing a rapid infiltration
basin (“RIB”) which would significantly reduce the water treatment
capital and operating expenditures. Work remains ongoing with our
consultants to identify an appropriate RIB across our vast land
package.
- Pinion Metallurgical Recoveries: The Company
will continue to analyze opportunities to economically improve gold
and silver recoveries in Pinion ore. One key area of study will
include the use of a portable crusher, which would provide a
benefit of improved Pinion metallurgical recoveries with no upfront
capital and a fixed operating unit cost per tonne crushed.
Mineral Resources and Mineral
Reserves
Mineral Resource estimates for Dark Star,
Pinion, POD / Sweet Hollow, Jasperoid Wash, and North Bullion were
prepared in accordance with NI 43-101 and outlined in Table 2. The
Mineral Resource estimates are based on a gold price of $1,750 per
ounce. Mineral Resources are inclusive of Mineral Reserves reported
in this document.
Table 2. Mineral Resources Summary.
Mineral Resources Summary |
Classification |
Tonnage |
Grades |
|
Contained Metal |
(kt) |
Au (g/t) |
Ag (g/t) |
Gold (koz) |
Silver (koz) |
OPEN PIT RESOURCES |
Dark Star |
Measured |
7,225 |
1.24 |
- |
288 |
- |
Indicated |
24,567 |
0.79 |
- |
625 |
- |
Measured + Indicated |
31,792 |
0.89 |
- |
913 |
- |
Inferred |
1,176 |
0.51 |
- |
19 |
- |
Pinion |
Measured |
2,336 |
0.73 |
6.5 |
55 |
488 |
Indicated |
41,193 |
0.62 |
5 |
816 |
6,617 |
Measured + Indicated |
43,529 |
0.62 |
5.08 |
871 |
7,105 |
Inferred |
1,178 |
0.4 |
2.43 |
15 |
92 |
POD / Sweet Hollow |
Inferred |
4,654 |
0.95 |
- |
142 |
- |
Jasperoid Wash |
Inferred |
11,939 |
0.34 |
- |
130 |
- |
North Bullion |
Inferred |
2,849 |
3.75 |
- |
344 |
- |
Total Open Pit Resources |
Measured |
9,561 |
1.12 |
N/A |
343 |
488 |
Indicated |
65,761 |
0.68 |
N/A |
1,441 |
6,617 |
Measured + Indicated |
75,322 |
0.74 |
N/A |
1,784 |
7,105 |
Inferred |
21,795 |
0.93 |
N/A |
650 |
92 |
UNDERGROUND RESOURCES |
North Bullion |
Inferred |
457 |
4.49 |
- |
66 |
- |
- All estimates of Mineral Resources have been prepared in
accordance with National Instrument 43 - 101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”). Mineral Resources
are not Mineral Reserves and do not have demonstrated economic
viability.
- Michael S. Lindholm, CPG, Mine Development Associates, a
division of RESPEC, of Reno, Nevada, is a Qualified Person as
defined in NI 43-101 and is responsible for reporting Measured,
Indicated and Inferred Mineral Resources for the South Railroad
Project. Mr. Lindholm is independent of the Company.
- Mineral Resources are based on a price of $1,750 per ounce Au.
The resources were reported within optimized pit shells created in
Whittle, or underground grade shells outside the Whittle pit
shells.
- Mineral Resources are reported using break-even cut-off grades
based on variable recoveries and processing and general and
administrative costs:
- Open pit oxide cut-off grade 0.17 g Au/t.
- Open pit sulphide cut-off grade 1.54 g Au/t.
- Underground sulphide cut-off grade 3.43 g Au/t.
- Mineral Resources have an effective date of January 31,
2022.
- All ounces reported herein represent troy ounces.
- Silver is reported for Pinion Mineral Resources only.
- Columns may not sum due to rounding.
- The estimate of Mineral Resources may be materially affected by
geology, environment, permitting, legal, title, taxation,
sociopolitical, marketing, or other risks inherent in mineral
exploration and development.
- Additional supporting details regarding the information in this
news release will be provided in the Feasibility Study to be
available on SEDAR within 45 days of this news release.
The Mineral Reserve estimates for Dark Star and
Pinion are based on an open pit mine plan and production schedule
outlined in the Feasibility Study. Table 3 presents the Mineral
Reserve estimation for the South Railroad Project. Proven and
Probable Mineral Reserves amount to 65.2 million tonnes at 0.77 g
Au/t, containing 1.60 million gold ounces and 6.1 million silver
ounces. The Mineral Reserve estimate is based on a gold price of
$1,450 per ounce.
Table 3. Mineral Reserves Summary.
Open Pit Mineral Reserves Summary |
Classification |
Tonnage (kt) |
Grades |
Contained Metal |
Au (g/t) |
Ag (g/t) |
Gold (koz) |
Silver (koz) |
OPEN PIT RESERVES |
Dark Star |
Proven |
6,911 |
1.27 |
- |
283 |
- |
Probable |
22,248 |
0.78 |
- |
557 |
- |
Proven + Probable |
29,158 |
0.90 |
- |
840 |
- |
Pinion |
Proven |
2,049 |
0.76 |
6.63 |
50 |
437 |
Probable |
33,992 |
0.65 |
5.21 |
714 |
5,700 |
Proven + Probable |
36,041 |
0.66 |
5.30 |
764 |
6,137 |
TOTAL RESERVES |
Total Mineral Reserves |
Proven |
8,960 |
1.15 |
N/A |
333 |
437 |
Probable |
56,239 |
0.70 |
N/A |
1,271 |
5,700 |
Proven + Probable |
65,199 |
0.77 |
N/A |
1,604 |
6,137 |
- All estimates of Mineral Reserves have been prepared in
accordance with National Instrument 43 - 101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”).
- Jordan M. Anderson, Mine Development Associates, a division of
RESPEC, of Reno, Nevada, is a Qualified Person as defined in NI
43-101 and is responsible for reporting Proven and Probable Mineral
Reserves for the South Railroad Project. Mr. Anderson is
independent of the Company.
- Mineral Reserves were defined based on pit designs that follow
Whittle optimized pit shells created using $1,450 per ounce Au and
$18.76 per ounce Ag. Pit designs followed pit slope recommendations
provided by Golder and Associates.
- Reserves are reported using break-even cut-off grades based on
variable recoveries provided by Gary L. Simmons, QP-MMSA, and
processing and general and administrative costs:
- Dark Star leach cut-off grade 0.17 g Au/t.
- Pinion oxide leach cut-off grade 0.17 g Au/t.
- Pinion transition leach cut-off grade 0.24 g Au/t.
- Mineral Reserves have an effective date of February 17,
2022.
- The Mineral Reserves point of reference is the point where
material is placed onto the leach pad.
- All ounces reported herein represent troy ounces.
- Silver reported for Pinion Mineral Reserves only.
- Columns may not sum due to rounding.
- The estimate of Mineral Reserves may be materially affected by
geology, environment, permitting, legal, title, taxation,
sociopolitical, marketing, or other risks inherent in mineral
exploration and development.
- Energy prices of $0.66 per liter of off-road diesel was used to
estimate mining costs.
- Additional supporting details regarding the information in this
news release will be provided in the Feasibility Study to be
available on SEDAR within 45 days of this news release.
Mining
The Feasibility Study contemplates open pit
mining from the Dark Star and Pinion deposits. Mineral Resources
contained within the POD / Sweet Hollow, North Bullion, or
Jasperoid Wash deposits, or any potential Mineral Resources at the
Pinion SB Zone and LT targets, have not been considered as part of
the Feasibility Study and remain subject to ongoing exploration.
The mine is designed as a traditional truck and shovel operation
with one year of pre-production and eight years of subsequent
mining. Ore will be sent run-of-mine (“ROM”) to a leach pad to be
processed.
A total of 29.2 million tonnes of ROM ore is
scheduled to be mined from the Dark Star pit averaging 0.90 g Au/t,
mined at a relatively steady rate over the first six years of
operation. Mining from the Pinion pit is projected to produce a
total of 36.0 million tonnes of ROM ore at an average grade of 0.66
g Au/t and 5.3 g Ag/t. The ROM ore deliveries from the two pits
total 65.2 million tonnes at an average grade of 0.77 g Au/t.
The open pits have been designed and scheduled
to maximize project rate of return. Pit slope optimization has been
undertaken based on geotechnical data collected in 2020. Dark Star
consists of four phases and Pinion contains five phases. Life of
mine (“LOM”) strip ratios will be 2.80 at Dark Star and 5.15 at
Pinion. Mining will be by conventional drill / blast / load / haul
methods on 9.1-meter benches. Two 23-m3 hydraulic shovels and a
19-m3 loader will load a fleet of 13 181-tonne payload trucks
operating between the two open pits.
Mine equipment is planned to be put into service
over a period of three years (pre-production through Year 2) and
used through the LOM.
Processing and Recovery
The process selected for recovery of gold and
silver from the Pinion and Dark Star ore is a conventional ROM heap
leach. Pinion and Dark Star ore will be truck-stacked on the heap
as ROM ore directly, without crushing. ROM ore will be stacked in
accordance with the mine plan, which averages 8.0 million tonnes of
ore per annum, with a peak of 10.8 million tonnes of ore in Year 5.
The ROM ore placement is equivalent to a LOM average of 22,100
tonnes per day, with the peak in Year 5 of an average of 29,700
tonnes per day.
Oxide and transition ore types will be leached
with a dilute cyanide solution at an average application rate in
the range of 1,100-1,400 cubic meters per hour. The leached gold
and silver will be recovered from solution using a carbon
adsorption circuit. The gold and silver will be stripped from
carbon using a desorption process, followed by electrowinning to
produce a precipitate sludge. The precipitate sludge will be
processed using a retort oven for drying and mercury recovery, and
then refined in a melting furnace to produce gold and silver doré
bars.
The major reagent consumptions for heap leaching
of Pinion and Dark Star ore have been taken from available
metallurgical test results from column leach tests on crushed
material. No test data exists at the ROM particle size, so the
selected reagent consumptions have been estimated based on test
results on the coarsest samples tests (37 mm). Cyanide consumptions
have been estimated at 0.22 kg/tonne for Pinion and 0.23 kg/tonne
for Dark Star. Lime consumption is estimated at 1.0 kg/tonne for
both Pinion and Dark Star ores.
A large number of variability samples and master
composites, mostly from PQ core, were selected by Gold Standard for
feasibility-level testing on the Dark Star and Pinion deposits. A
total of 440 bottle-roll tests were conducted at 75 and 1,700
microns, 186 standard column leach tests at various P80 sizes
ranging from 9.5 mm to 25 mm, and 34 column leach tests on
HPGR-crushed samples (P80 = 5 - 6 mm).
ROM heap leach head grade versus gold recovery
models were developed for Dark Star and Pinion and silver recovery
models were developed for Pinion. Silver grades for Dark Star were
not of economic significance. The overall LOM average gold recovery
for the Dark Star deposit is estimated at 72% and the Pinion
deposit is estimated at 56%.
Capital and Operating Costs
Capital costs have a basis of estimate at Class
3 (FEL3) with a stated +/-15% accuracy (after the Association for
the Advancement of Cost Engineering International) and are stated
in Q4 2021 US dollars.
Capital cost contingency has been allocated on
scopes of work depending on level of completion for each scope. The
combined contingency for all scopes of work is equivalent to 18% of
direct costs, excluding mining equipment and pre-stripping. More
than 80% of equipment costs, bulk materials and labor rates are
estimated with budget quotes from vendors. The remaining 20% of
costs are estimated from consultant databases on precedent
projects, or from factoring such items as freight and construction
indirect costs from supply pricing.
Mine equipment is assumed to be acquired through
a combination of leasing for most production and support equipment,
rentals for pioneering drills, and purchase of some support
equipment.
The initial capital cost, including contingency,
is estimated at $190 million and LOM sustaining capital cost,
including contingency, is estimated at $197 million, for a total
capital cost of $387 million.
Table 4. Capital Expenditures.
Item |
Unit |
Cost |
Pre-Stripping |
$M |
23 |
Mining Equipment (1) |
$M |
14 |
Heap Leach Pad |
$M |
16 |
Waste Dumps |
$M |
4 |
Process Plant |
$M |
24 |
Water Treatment Plant / Systems |
$M |
6 |
Power Generation & Distribution (1) |
$M |
18 |
ADR Building & Ancillaries |
$M |
15 |
Site General / Water Management |
$M |
21 |
Indirect Costs |
$M |
30 |
Contingency |
$M |
19 |
Total Initial Capital |
$M |
190 |
|
|
|
Sustaining Capital, Mining (1) |
$M |
103 |
Sustaining Capital, Infrastructure |
$M |
73 |
Closure |
$M |
23 |
Salvage |
$M |
(12) |
Contingency |
$M |
11 |
Total Sustaining Capital |
$M |
197 |
|
|
|
Total Capital |
$M |
387 |
(1) Assumes equipment financing for
primary mining equipment and power generators.
Mine operating costs, including pre-stripping,
are estimated at $1.92 per tonne moved or $9.80 per tonne processed
with a strip ratio of 4.10 (waste:ore) over the LOM.
Processing and water treatment related costs are
estimated at $2.26 per tonne processed. General and administration
costs are estimated at $0.58 per tonne processed. Diesel costs are
estimated at $0.66 per liter and power at $0.15 per kWh (net charge
for generated power).
Overall LOM Cash Costs are estimated at $792 per
payable ounce of gold net of by-product silver credit. The LOM
All-In Sustaining Costs are estimated at $1,021 per payable ounce
of gold net of by-product silver credit.
Table 5. Operating Costs.
Item |
Unit |
Value |
Tonnes Moved, including pre-strip |
kt |
332,378 |
Tonnes Processed |
kt |
65,199 |
Payable Ounces Produced |
koz Au |
1,030 |
|
|
|
Mining Costs |
$/tonne moved |
1.92 |
Processing & Water Treatment |
$/tonne processed |
2.26 |
G&A |
$/tonne processed |
0.58 |
Total |
$/tonne processed |
12.64 |
|
|
|
Refining, Silver Credit, Royalties |
$M |
14 |
Cash Costs |
$/oz (net of by-product
credit) |
792 |
Total Sustaining Capital |
$M |
197 |
Nevada Net Proceeds and Excise Tax |
$M |
40 |
|
|
|
All-In Sustaining Costs |
$/oz (net of by-product
credit) |
1,021 |
|
|
|
Infrastructure and
Facilities
The main structures in the South Railroad
operating area will be the heap leach pad, solution ponds, the
carbon Adsorption-Desorption-Regeneration (“ADR”) plant, refinery
and truck shop. Other structures will house support services such
as the laboratory, administration, security and process
maintenance. Site geotechnical investigations have been performed
to support the engineering effort for site infrastructure
design.
The heap leach pad will be a conventional
run-of-mine stack with a composite liner system to prevent release
of solution to the environment. Process channels and ponds
associated with the heap leach pad will utilize dual containment
liner systems with leak detection. The heap leach pad and
associated facilities will be fully reclaimed at closure.
Power will be supplied by an on-site power
generation facility. For the electrical demand of the project, four
natural gas generators will be included. Each generator has a
capacity of 1970 kW and the design considers operation with three
generators. The fourth generator provides (N+1) reliability, which
minimizes operating restraints. Natural gas will be delivered to
site via trucks in the form of liquified natural gas (“LNG”). LNG
will be stored in a double-walled tank and vaporized for use in the
generators. Synchronizing switchgear is included for load-sharing
between operating generators.
The main source of water will be from nine pit
dewatering wells to support the mining operation of the North Dark
Star pit and later from two dewatering wells at the Pinion pit.
Excess water will be treated at the water treatment plant and
discharged to the tributary to Dixie Creek. Stormwater controls
during operations are designed to meet the 100-year, 24-hour storm
event, and stormwater controls after closure are designed to meet
the 500-year, 24-hour event. Water will be conveyed at site via a
series of three primary tanks and the associated conveyance piping
and pumps.
Entrance to the site will be located 28 miles
southwest of Spring Creek, NV along Nevada State Highway 228. The
main access road to the site will be along an existing 21-mile
gravel road route southwest of Hwy 228 and the South Fork
Reservoir, which will be improved to a standard two-way road with a
5-meter lane and 2-meter shoulder in each direction, and with
safety and drainage structures. The road will be straightened where
possible and graded to a maximum 8%.
Financial Analysis
At Base Case Gold Price ($1,650 per ounce) the
project generates an after-tax NPV5 of $315M and an after-tax IRR
of 44%. Payback on initial capital is 1.9 years.
LOM after-tax free cash flow (“FCF”) is
estimated at $403M. Average after-tax free cash flow during the
first four years of production while mining Dark Star is estimated
at $98M per annum.
Compared to the 2020 PFS, after-tax NPV5,
after-tax IRR, and after-tax LOM FCF have grown by 19%, 11%, and
13% respectively, reflecting increased gold production, additional
operating life of the project, and an increased Base Case Gold
Price.
At Spot Gold Price the project generates an
after-tax NPV5 of $487M and IRR of 62%, and payback on initial
capital is 1.6 years.
Table 6. Gold Price Sensitivity.
Gold Price (US$/oz) |
|
$1,500 |
$1,650 |
$1,800 |
$1,899 |
|
|
|
Base Case |
|
Spot Case |
NPV5 |
$M |
211 |
315 |
419 |
487 |
IRR |
% |
33% |
44% |
55% |
62% |
Payback |
years |
2.2 |
1.9 |
1.7 |
1.6 |
Total FCF |
$M |
281 |
403 |
526 |
606 |
Avg. Annual FCF (1) |
$M |
54 |
70 |
85 |
95 |
First 4 Years Avg. Annual FCF (2) |
$M |
80 |
98 |
117 |
130 |
(1) Average based on the eight years of
full year mining and stacking in the mine plan. Excludes
pre-production and residual leach years of operation. (2)
Excludes pre-production year.
Permitting
The Bureau of Land Management (“BLM”) has
implemented a process for the Plan of Operations that commences
prior to the submittal and continues through the review and
approval process. Gold Standard submitted a Plan of Operations for
the project in November 2020 and the BLM determined that a plan was
complete in December of 2020. The review and approval process for
the Plan of Operations by the BLM constitutes a federal action
under the National Environmental Policy Act (“NEPA”) and BLM
regulations. The BLM is required to comply with the NEPA and the
BLM has determined that an Environmental Impact Statement (“EIS”)
is required. A NEPA contractor was selected in August 2021 and
initiated work in September 2021. The BLM will need to publish the
Notice of Intent in the Federal Register to officially commence the
NEPA Process. Gold Standard will also need an Individual Section
404 Permit from the United States Army Corps of Engineers, and this
agency will be a cooperating agency on the NEPA documents.
There are a number of environmental permits
issued by the Nevada Department of Environmental Protection
(“NDEP”) that are necessary to develop the project and which Gold
Standard needs to permit the project. The NDEP issues permits that
address water and air pollution, as well as land reclamation. The
Nevada Division of Water Resources issues water rights for the use
and management of water, and an application for water rights at SRP
has been made.
The SRP is a previously explored minerals
property with exploration related disturbance. However, there have
been very long periods of non-operation. There are no known ongoing
environmental issues with any of the regulatory agencies. Gold
Standard has been conducting baseline data collection for a number
of years to facilitate environmental studies required to support
the EIS and permitting process. The waste rock and mineralized
material characterization and the hydrogeologic evaluation are
completed and under review by the BLM and NDEP. Material
characterization indicates the need to manage a significant portion
of the waste rock as potentially acid generating in engineered
facilities. Additional results to date indicate limited cultural
issues, air quality impacts appear to be within State of Nevada
standards, traffic and noise issues are present but at low levels,
and socioeconomic impacts are positive.
Social and community impacts have been and are
being considered and evaluated in accordance with the NEPA and
other federal laws. Potentially affected Native American tribes,
tribal organizations and/or individuals are consulted during the
preparation of the EIS to advise on the proposed projects that may
have an effect on cultural sites, resources, and traditional
activities.
Potential community impacts to existing
population and demographics, income, employment, economy, public
finance, housing, community facilities and community services are
evaluated for potential impacts as part of the NEPA process. There
are no known social or community issues that would have a material
impact on the project’s ability to extract mineral resources.
Identified socioeconomic issues (employment, payroll, services and
supply purchases, and state and local tax payments) are anticipated
to be positive.
A Tentative Plan for Permanent Closure (“TPPC”)
for the project would be submitted to the NDEP with the Water
Pollution Control Permit application. In the TPPC, the proposed
heap leach closure approach would consist of fluid management
through evaporation, covering the heap leach growth media, and then
revegetating. Any residual heap leach drainage will be managed with
evaporation cells.
South Railroad Project Next
Steps
The South Railroad Feasibility Study
contemplates ground-breaking for site construction in Q2 2023, with
a total 12-month construction period and first gold production in
Q3 2024. This schedule is dependent upon the completion of the
final EIS and the receipt of a Record of Decision permit.
Activities for Gold Standard in 2022 will focus on the
following:
- Construction Capital
Financing Process: The construction capital financing
process, led by Cutfield Freeman, will begin this quarter. Orion
Mine Finance has agreed to provide the Company with a term sheet to
provide up to $200 million of financing support to the Company,
following the satisfaction of mutually agreed milestones, to help
finance the construction of the South Railroad Project. In
connection with the financing support, Orion shall be granted a
right of first offer on any financial instrument for financing the
Company including, but not limited to, streaming, royalty, prepay
or offtake agreements for precious metals of the Company. Orion’s
right of first offer does not include (i) any bought or overnight
marketed equity or convertible debt deal with banks or brokers,
(ii) project finance, term loans or a credit facility by a bank or
syndicate of banks, (iii) a marketed high yield offering
underwritten by a bank, and (iv) any financing transaction with
aggregate proceeds of up to $40 million. Separately, the Company
has received interest from numerous capital providers about
participating in the financing process. Given the robust free cash
flows in the first four years of operation and rapid payback of
initial capital as outlined in the Feasibility Study, Gold Standard
is targeting 75% of the total construction capital financing to be
non-equity. The Company anticipates concluding the construction
capital financing process before year end 2022.
- Continued Permitting
Activities: The Company anticipates that the Notice of
Intent will be filed in the Federal Register before the end of this
quarter. Once that milestone is complete, public scoping meetings
can commence in conjunction with the development of the EIS. SWCA
Environmental Consultants have been engaged to manage the EIS
process on behalf of the BLM.
- Begin Detailed Design Work
and Award EPCM Contract: The Company anticipates awarding
the Engineering, Procurement & Construction Management contract
for SRP in Q2 2022. In conjunction, detailed engineering and design
work would commence to prepare for a construction decision
following the receipt of the Record of Decision permit.
- 2022 Exploration
Program: Exploration in 2022 will initially focus on oxide
drilling at the Pinion SB Zone with the goal of expanding the
resource base at Pinion. In addition, the Company will begin
drilling sulphide gold targets at Ranch (500m north of Dark Star)
and North Bullion (10km north of Pinion). Exploration capital will
be allocated in two stages for the year. Based on the drilling
success in the first phase at the targets mentioned above,
additional capital may be allocated for further drilling in the
second half of the drill season.
NI 43-101 Technical Report
The Feasibility Study Technical Report will be
prepared by M3 Engineering & Technology Corporation (“M3”) and
filed on SEDAR within 45 days following the date of this news
release. Matthew Sletten, PE, Project Manager of M3 and Art Ibrado,
PhD, PE, of Fort Lowell Consulting PLLC, working with M3, are the
qualified persons (“QPs”) responsible for the scientific and
technical information in this news release as defined by NI 43-101.
Thomas L. Dyer, PE and Jordan Anderson, RM-SME of MDA (a division
of RESPEC), are the QPs for the reserve estimate and mine planning
in this news release, as defined by NI 43-101. Michael S. Lindholm,
CPG of MDA (a division of RESPEC), is the qualified person (“QP”)
for the resource estimates in this news release, as defined by NI
43-101. Mr. Ibrado, Mr. Sletten, Mr. Dyer, Mr. Anderson and Mr.
Lindholm are independent of Gold Standard.
Qualified Persons
Michael S. Lindholm, CPG of MDA (a division of
RESPEC) is the QP responsible for the preparation of the February
2022 South Railroad Project Mineral Resource Estimates, including
geological technical information and QA/QC review of drilling and
sampling data. The QPs responsible for the preparation of the
Mineral Reserves and mine planning are Jordan Anderson, RM-SME and
Thomas L. Dyer, PE of MDA (a division of RESPEC). Gary L. Simmons,
QP-MMSA of GL Simmons Consulting, LLC is the QP person responsible
for mineral processing and metallurgical testing. Benjamin
Bermudez, PE of M3 is the QP responsible for the design of the
process plant. Matthew Sletten, PE of M3 is the QP responsible for
the design of infrastructure, capital and operating costs of the
process plant, and financial modelling. Kevin Lutes, PE of New
Fields is the QP responsible for the heap leach pad design. Richard
DeLong, QP-MMSA of EM Strategies, Inc. is the QP responsible for
environmental studies, permitting and social or community impact.
All the QPs cited above are independent of Gold Standard.
Non-IFRS Financial Measures
The Company has included certain non-IFRS
financial measures in this news release, such as Cash Costs, AISC,
and Free Cash Flow which are not measures recognized under IFRS and
do not have a standardized meaning prescribed by IFRS. As a result,
these measures may not be comparable to similar measures reported
by other corporations. Each of these measures are intended to
provide additional information to the reader and should not be
considered in isolation or as a substitute for measures prepared in
accordance with IFRS.
Certain non-IFRS financial measures used in this
news release and common to the gold mining industry are defined
below.
Cash Costs and Cash Cost per Ounce
Cash Costs are reflective of the cost of
production. Cash Costs reported in the Feasibility Study include
mining costs, processing & water treatment costs, general and
administrative costs of the mine, refining and transportation
costs, silver revenue credits, and royalties. Cash Costs per Ounce
is calculated as Cash Costs divided by payable gold ounces.
All-In Sustaining Costs (AISC) and AISC per
Ounce
AISC is reflective of all expenditures that are
required to produce an ounce of gold from operations. AISC reported
in the Feasibility Study includes Cash Costs, Sustaining Capital,
and Nevada Net Proceeds and Excise Tax, but excludes corporate
general and administrative costs. AISC per Ounce is calculated as
AISC divided by payable gold ounces.
Free Cash Flow
Free cash flows are revenues net of operating
costs, royalties, working capital adjustments, capital expenditures
and cash taxes. The Company believes that this measure is useful to
the external users in assessing the Company’s ability to generate
cash flows from the project.
Conference Call and Webcast
Gold Standard will host a conference call on
February 24, 2022, at 10:00 am PT, to discuss the results of the
Feasibility Study:
• |
Conference call and webcast: |
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Toll-free in U.S. and Canada: |
+1 (800) 319-4610 |
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All other callers: |
+1 (604) 638-5340 |
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Webcast:
https://services.choruscall.ca/links/goldstandard20220224.html |
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• |
The conference call will be archived and available
on our website. Audio replay will be available for two weeks by
calling: |
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Toll-free in U.S. and Canada: |
+1 (855) 669-9658, replay code 1857 |
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All other callers: |
+1 (604) 674-8052, replay code 1857 |
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About Gold Standard
Gold Standard is developing the South Railroad
Project, an open pit, heap leach gold project located in Elko
County, Nevada. The project is part of a +21,000-hectare land
package on the Carlin Trend and is 100% owned or controlled by Gold
Standard. The goal of the Company is to become the low-cost junior
producer of choice in Nevada, one of the premier mining
jurisdictions in the world.
About M3 Engineering
M3 is a privately held full-service design
company that has provided architecture, engineering, and
construction management services in over 30 countries. Founded in
1986 in Tucson, Arizona, M3 has offices in Chandler, Arizona;
Charlotte, North Carolina; Hermosillo, Mexico; Arequipa, Peru;
Santiago, Chile; and Buenos Aires, Argentina; and is incorporated
in Colombia and Canada. M3 is well known for its contributions to
mining and telescope projects.
Cautionary Note Regarding
Forward-Looking Statements
This news release contains forward-looking
statements, which relate to future events or future performance.
All statements, other than statements of historical fact, included
herein including, without limitation, statements regarding the
project economics, including capital costs, operating expenditures,
free cash flow, IRR and payback of the SRP; the timing and
availability of construct financing for the SRP; the ability of the
Company to extend mine life and expand the Mineral Reserves and
Resources at the SRP; the potential upside opportunities at the
SRP, including the expansion of the Pinion open pit, the ability to
process sulfide ore, the ability to reduce costs associated with
water treatment, and the ability to economically improve gold and
silver recoveries; the project operations, including the processing
and recovery projections; and the timing and completion of the
permitting process; and the timing and completion of an
Engineering, Procurement & Construction Management contract;
and the timing and ability of the Company to produce gold from the
SRP.
Such forward-looking statements reflect
management’s current beliefs and are based on assumptions made by
and information currently available to the Company, including that
that the geology of the ore in the area of Mineral Resources and
Mineral Reserves at the SRP will conform to that set out in the
Feasibility Study for the SRP; that operations at the SRP will
conform to the mine plan and schedule set out in the Feasibility
Study for the SRP; that the Company will be successful in the
financing and construction of the SRP; that the Company completes
the necessary permitting process; and that operating and capital
costs, and commodity prices, will conform to the costs and prices
set out in the SRP. By their nature, forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements, or
other future events, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These risks, uncertainties and other
factors include, among others: that the pit and the area of
demonstrated Mineral Resources and Mineral Reserves at the SRP will
be different than that set out in the Feasibility Study for the
SRP, that the Company may not be successful in financing and
constructing the SRP; that the SRP may never be placed into
production; global financial conditions and volatility of capital
markets, uncertainty regarding the availability of additional
capital, fluctuations in commodity prices; title matters; and the
additional risks identified in our filings with Canadian securities
regulators on SEDAR in Canada (available at www.sedar.com) and with
the SEC on EDGAR (available at www.sec.gov/edgar.shtml). These
forward-looking statements are made as of the date hereof and,
except as required under applicable securities legislation, the
Company does not assume any obligation to update or revise them to
reflect new events or circumstances.
Cautionary Note for U.S. Investors
Concerning Mineral Resources and Reserves
National Instrument 43-101 - Standards of
Disclosure for Mineral Projects (“NI 43-101”) is a rule of the
Canadian Securities Administrators which establishes standards for
all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Technical disclosure
contained in this news release has been prepared in accordance with
NI 43-101 and the Canadian Institute of Mining, Metallurgy and
Petroleum Classification System. These standards differ from the
requirements of the U.S. Securities and Exchange Commission (“SEC”)
and resource information contained in this press release may not be
comparable to similar information disclosed by domestic United
States companies subject to the SEC’s reporting and disclosure
requirements.
All references to “$” in this news release are
to U.S. dollars unless otherwise stated.
Cautionary Note Regarding Non-GAAP
Financial Measures
Alternative performance measures in this news
release such as “cash cost”, “AISC” “free cash flow” are furnished
to provide additional information. These non-GAAP performance
measures are included in this news release because these statistics
are used as key performance measures that management uses to
monitor and assess performance of the Project, and to plan and
assess the overall effectiveness and efficiency of mining
operations. These performance measures do not have a standard
meaning within International Financial Reporting Standards (“IFRS”)
and, therefore, amounts presented may not be comparable to similar
data presented by other mining companies. These performance
measures should not be considered in isolation as a substitute for
measures of performance in accordance with IFRS.
For further information
contact: Michael McDonald Vice President, Corporate
Development & Investor Relations Phone: 1-604-687-2766 E-Mail:
info@goldstandardv.com
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