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Wallbridge Mining Company Limited (TSX:WM, FWB: WC7) ("Wallbridge") is pleased to announce positive results of a Pre-Feasibility Study ("PFS") (prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101")) for the development of its Fenelon Gold Mine ("Fenelon") in Quebec, Canada. The PFS estimates a Pre-tax Net Cash Flow of $6.62M and a Project pre-tax Internal Rate of Return ("IRR") of 92% for the initial approximate 18 month mine life for the known reserves located above 100 meters depth and in close proximity to the existing ramp.
Marz Kord, CEO of Wallbridge, commented, "With a high margin pre-tax return of 92%, the PFS supports that Fenelon is well placed to become one of the high margin, low cost producers in the camp. The next key step in the development of Fenelon is the continuation of the permitting process as well as exploration around the existing deposit to add potential ounces and extend mine life."
"In tandem with the permitting and exploration, we will be seeking required funding for the pre-production costs through a variety of options including offtake partners. With recent exploration results at Fenelon, we are optimistic that we can add additional ounces with very limited drilling by initially pursuing high quality targets around the existing deposit. This exploration effort will continue from underground when in production in order to expand the deposit to depth and along strike."
Following the results of the PFS, we will continue with the required studies and permitting of the project as we look to bring the project to a production decision and into production.
The PFS demonstrates the attractive economics of Fenelon within the top 100 meters of the deposit and key findings are shown in the table below:
Table 1: Key Results (in Canadian dollars)
Pre-Feasibility Study Key
Indicators Value
------------------------- -----
Pre-tax Net Cash Flow $6.62M
--------------------- ------
Pre-tax Net Present Value
(NPV) (at 5% discount) $5.84M
------------------------- ------
Pre-tax IRR (%) 92%
-------------- ---
Initial Construction Capital
Cost $5.24M
---------------------------- ------
Average operating costs
($/ounce Au) $1,056
----------------------- ------
Post-tax NPV (at 5% discount) $2.8M
---------------------------- -----
Post-tax IRR (%) 60%
--------------- ---
Peak production capacity
(tonnes per day "tpd") 400
------------------------ ---
-- Estimated Project pre-tax IRR of 92%; NPV of US$5.84M, (at a 5%
discount rate); and simple payback of twelve months, based on a
$1,689 Canadian per ounce of gold- 6-month trailing average
gold price in Canadian dollars.
-- Most cost estimates are based on firm quotations from mining
and transportation contractors. Mining contractors have shown
interest to supply the working capital (part of capital
expenses) until mill payments are received.
-- Milling cost is based on an indicative quote from a gold toll
milling facility where the previous two bulk samples were
processed (295 kilometers distance from Fenelon).
-- Wallbridge intends to continue the permitting and the required
studies with the intent to make a production decision in the
second quarter of 2017.
Project Introduction
The Fenelon Project covers 1,052 hectares and is located in West-Central Quebec about 75 kilometres northwest of the town of Matagami. Geologically it is situated proximal to the Sunday Lake Deformation Zone which hosts the Detour Gold Mine in Ontario as well as the Martiniere gold project being explored by Balmoral Resources Ltd.
A total of over 50,000 metres of drilling have been completed on the project and, very significantly, two bulk samples have been mined and processed from the Discovery Zone deposit. In 2001, a 13,713 tonne bulk sample mined from a small open pit at the Discovery Zone was test milled at the Camflo mill in Malartic and returned 132,039 grams (4,213 ounces) of gold giving a reconciled grade of 9.84g/t gold using a calculated recovery of 97%. A second bulk sample, mined from underground and also milled at Camflo was comprised of 8,073 tonnes and returned 80,731 grams (2,596 ounces) of gold giving a reconciled grade of 10.7 g/t gold at a calculated gold recovery of 93.5%. Without operational problem occurring during the ore processing of this second bulk sample, the gold recovery should normally be in the range of 97 %.
Mineral Resources
The 2016 resource area measures 500 m along strike, 210 m wide and 280 m deep. The resource estimate is based on a compilation of historical and recent diamond drill holes and wireframed mineralized zones largely inspired by previous work and Wallbridge's interpretation. The final model was constructed by InnovExplo Inc. ("InnovExplo").
In order to conduct accurate resource modelling of the deposit, InnovExplo based its mineralized-zone wireframe model on the drill hole database and their knowledge of the Fenelon mine and similar deposits. A total of nine mineralized solids (coded 102 to 110) that honour the drill hole database were created.
Table 2 below displays the results of the In Situ Mineral Resource Estimate for the Fenelon Project at the official 5.00 g/t Au cut-off grade.
Table 2 : Fenelon Project Mineral Resource Estimate at a 5.00 g/t Au cut-off grade
> 5.00 g/t Au Tonnes Au Contained
Au
---
(t) (g/t) (oz)
--- ----- ---
Measured
(M) Measured (In-situ) 27,000 13.94 12,100
and
Indicated (I)
------------ ---
Measured (broken) 3,100 6.14 600
----------------
Indicated 61,000 12.89 25,300
====== ===== ======
Total M+I 91,100 12.97 38,000
--------- ------ ----- ------
Inferred In-situ 6,500 9.15 1,900
-------- ------- ----- ---- -----
-- The Independent and Qualified Persons for the Mineral Resource
Estimate, as defined by NI 43-101, are Pierre-Luc Richard,
P.Geo., M.Sc. and Catherine Jalbert, P.Geo., B.Sc., of
InnovExplo, and the effective date of the estimate is July 5,
2016.
-- Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
-- The model includes nine gold-bearing zones, eight of which
include resources at the official cut-off grade.
-- Results are presented in situ and undiluted.
-- Sensitivity was assessed using cut-off grades from 2.00 to
10.00 g/t Au with 1.00 g/t Au increments. The official resource
is reported at a cut-off of 5.00 g/t Au. Cut-off grades must be
re-evaluated in light of prevailing market conditions (gold
price, exchange rate and mining cost).
-- A fixed density of 2.80g/cm(3) was used for all zones supported
by limited information.
-- A minimum true thickness of 2.0 m was applied, using the grade
of the adjacent material when assayed, or a value of zero when
not assayed.
-- High grade capping (Au) was done on raw assay data and varies
from 30 g/t to 140 g/t based on statistical analysis of
individual mineralized zones. Restricted search ellipsoids were
used during interpolation using 1X variography ranges and a
threshold of 30 g/t Au.
-- Compositing was done on drill hole intercepts falling within
the mineralized zones (composite lengths vary from 1m to 3m in
order to distribute the tails adequately).
-- Resources were evaluated from drill holes using a 2-pass ID3
interpolation method in a block model (block size = 5 m x 5 m x
5 m).
-- The inferred category is only defined within the areas where
blocks were interpolated during pass 1 or pass 2 where
continuity is sufficient to avoid isolated blocks being
interpolated by only one drillhole. The indicated category is
only defined by blocks interpolated by a minimum of two
drillholes in areas where the maximum distance to the closest
drill hole composite is less than 20m for blocks interpolated
in pass 1. The measured category is only defined by blocks
interpolated by a minimum of two drillholes in areas where the
maximum distance to the closest drill hole composite is less
than 20m for blocks interpolated in pass 1 and in close
proximity with sampled drifts (<10m).
-- Ounce (troy) = metric tons x grade / 31.10348. Calculations
used metric units (metres, tonnes and g/t).
-- The number of metric tons was rounded to the nearest hundred.
Any discrepancies in the totals are due to rounding effects.
Rounding followed the recommendations in NI 43-101.
-- InnovExplo is not aware of any known environmental, permitting,
legal, title-related, taxation, socio-political, marketing or
other relevant issue that could materially affect the Mineral
Resource Estimate.
Mineral Reserves
Mineral reserves were estimated from the resource block model, using manually generated wireframes (stopes), which were designed based on the established 5.0 g/t cut-off grade.
At a pre-feasibility level, longhole open stoping, uppers open stoping and drift & fill are the three methods selected for Fenelon, as they satisfy the following design criteria:
-- Maintain maximum productivities by incorporating bulk-mining
methods and operational flexibility, which should result in
lower operating costs; and
-- Maintain high overall recovery rates.
The following tables illustrate the estimated reserve by stope type as well as Reserve Statement by category:
Table 3: Reserve Statement
Stope Mined Grade Mined External Mined Grams of Total Diluted Recovery Recovered Grams New
Type Ounces
Tonne Grams Dilution Diluted Dilution Grams Grade Tonnes Recovered
1.0 g/t Tonnes
--- ------- ------
Uppers 24,652 9.93 244,792 15% 28,350 3,698 248,490 8.77 88% 25,018 219,594 7,060
------ ------ ---- ------- --- ------ ----- ------- ---- --- ------ ------- -----
Long Hole 46,521 11.23 522,364 15% 53,499 6,978 529,343 9.89 96% 51,265 509,319 16,375
--------- ------ ----- ------- --- ------ ----- ------- ---- --- ------ ------- ------
Top Sill
Surface 10,101 10.13 102,357 15% 11,617 1,515 103,872 8.94 96% 11,186 100,336 3,226
-------- ------ ----- ------- --- ------ ----- ------- ---- --- ------ ------- -----
Pit Bench 2,222 9.73 21,614 15% 2,555 333 21,947 8.59 97% 2,478 21,289 684
--------- ----- ---- ------ --- ----- --- ------ ---- --- ----- ------ ---
Drift & Fill 2,232 8.76 19,548 5% 2,344 112 19,660 8.39 97% 2,274 19,070 613
------------ ----- ---- ------ --- ----- --- ------ ---- --- ----- ------ ---
Dev Ore 1,467 8.03 11,783 5% 1,540 73 11,856 7.70 97% 1,494 11,501 370
------- ----- ---- ------ --- ----- --- ------ ---- --- ----- ------ ---
Broken Ore 3,100 6.14 19,034 0% 3,100 0 19,034 6.14 97% 3,007 18,463 594
---------- ----- ---- ------ --- ----- --- ------ ---- --- ----- ------ ---
Total 90,295 10.43 941,492 14% 103,004 12,709 954,201 9.30 94% 96,721 899,570 28,922
----- ------ ----- ------- --- ------- ------ ------- ---- --- ------ ------- ------
Table 4: Reserve Statement by category
Category Mined Recovered Grams New
Tonnes Tonnes Recovered Ounces
--- ------ ------ --------- ------
Proven 6,321 6,770 62,970 2,025
------ ----- ----- ------ -----
Probable 83,974 89,951 836,600 26,897
-------- ------ ------ ------- ------
Total 90,295 96,721 899,570 28,922
----- ------ ------ ------- ------
Metallurgy
The Fenelon ore responds well to conventional gold leaching with gold recoveries up to 98-99 % in the limited laboratory testwork done to date. The two bulk samples tested in the past returned gold recoveries of 97% and 93.5%, but with operational problems reported on both occasions. The problems were associated with liquid losses at the gold precipitation stage and not with gold dissolution. This situation could normally be avoided by process adjustments. Taking into account the excess gold liquid losses that occurred during the second bulk processing, both campaigns returned similar gold recoveries with extraction close to 97%.
The additional testwork done in 2016 on historical core samples failed to confirm by direct cyanidation the gold recoveries on the discovery zone and deposit. However, intensive leaching on the leach tails from those tests returned similar high gold recoveries up to the 98-99% at the target grind size.
Considering the bulk sample and laboratory results to date, the 97% gold recovery appears appropriate at this stage. Test work will continue when new samples become available.
Capital and Operating Costs
For the purpose of the pre-feasibility study, all mining activities on site should be completed by contractors. No processing activities, other than crushing, are planned on site so the ore should be trucked to a toll mill facility for processing. A very small owner's team is envisioned to manage the contractors on site and oversee the geology aspect of the project. Thus capital and operating costs have been widely derived from contractor quotes, local to the area and have been validated based on the estimator experience with similar projects.
The estimated pre-tax capital and operating expenditures are summarized in the following table based on the information available at the time of the release.
Table 5: Fenelon Cost expenditure summary (000 Cdn$)
Cost Item Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Total
--------- ------- ------- ------- ------- ------- ------- ------- ------- -----
Total 329 941 4,140 6,292 11,968 8,131 6,825 2,152 40,777
----- --- --- ----- ----- ------ ----- ----- ----- ------
The estimated global contingency included in the cost estimate represents 9.9% of the total cost before contingency at P50. This percentage was determined by evaluating the quantity and cost precision of each system element of the cost estimate. As a result, contingency by item varies between 5.6% and 50%. In other words, each system element was assigned a precision level on quantity development and a precision level on cost origin.
Cash Flow Analysis
The project is currently estimated to have a payback period of twelve months. Cash flows are based on a 100% equity funding basis and the economic analysis indicates a pre-tax NPV, discounted at 5%, of $5.84M and IRR of 92%. Post tax the NPV is approximately $2.8M and IRR 60%.
The economic evaluation was performed using the IRR and the NPV methods using estimates of capital and operating costs, a construction schedule, a production schedule, and estimates of future gold ore prices provided. Since the financial analysis is based on a cash flow estimate, it should be expected that actual financial results should vary from these predictions.
A 6 month trailing average for commodity prices and exchange rates as of September 2016 were used for the purpose of this study. The 6 month trailing average at the time of the report (July to December 2016) was calculated at 1,686 Cdn$/ounce which is consistent with the September 2016 value of 1,689 Cdn$/ounce used in the financial analysis. All costs are in Q4 2016 Canadian dollars with no allowance for inflation or escalation.
The pre-tax Project NPV sensitivity was calculated for various gold prices and discount rates. This sensitivity is illustrated in Table 6 below.
Table 6: Pre-tax NPV for varying gold prices and discount rates (000 Cdn$)
Gold price (Cdn$/oz) 1,689 1,400 1,500 1,600 1,700 1,800
(Base Case)
=== ==========
Discount Rate
-------------
Pre-tax NPV at 0% 6,618 -1,330 1,416 4,163 6,909 9,655
---------------- ----- ------ ----- ----- ----- -----
Pre-tax NPV at 5%
(Base Case) 5,842 -1,633 950 3,532 6,115 8,698
----------------- ----- ------ --- ----- ----- -----
Pre-tax NPV at 10% 5,155 -1,895 541 2,977 5,413 7,849
----------------- ----- ------ --- ----- ----- -----
Community and Environment
Wallbridge has been working on a consultation plan to assess the perceptions of the Fenelon Project by the Cree, Algonquin and Jamesian communities within which the Project is located.
None of the environmental data to date has identified any critical elements that could seriously impact the future development of the Fenelon Project. Additional studies will have to be conducted in order to complete an environmental baseline. The project will have to undergo the Northern Quebec environmental and social impact assessment and review procedure. An environmental baseline study was completed in 2004 which will require additional studies and Wallbridge will have to submit an environmental impact assessment statement.
Project Timetable
Table below shows the project milestones in months with project start date to be when permits are received (month 0). The project duration is approximately 18 months from the receipt of production permits. The start date is dependent on the receipt of production permits from various regulatory agencies.
Table 7: Fenelon Main Milestones
Milestone Id Month
------------ -----
Engineering Start -6
----------------- ---
Permits are received 0
-------------------- ---
Mobilization Complete 1
--------------------- ---
Dewatering Complete 4
------------------- ---
Mine Development Complete 11
------------------------- ---
End of Mining 17
------------- ---
Project Finish 18
-------------- ---
Report Filing
A technical report on this PFS (prepared in accordance with NI 43-101) will be filed on SEDAR at www.sedar.com and at www.wallbridgemining.com within 45 (forty-five) days of the date of this news release.
Qualified Persons
Each of the Qualified Persons below has reviewed and approved the technical information for their specific items contained in this press release and is independent of Wallbridge. The Qualified Persons are:
Catherine Jalbert, P.Geo., B.Sc., and Pierre-Luc Richard, P.Geo., M.Sc. (InnovExplo Inc.), who prepared the Mineral Resource Estimate in this press release.
George Darling, P. Eng., (SNC-Lavalin Inc., at the time of preparation of the report), who prepared the Mineral Reserve Estimate, mine plan infrastructure, cost estimate and financial evaluation.
Marie-Claude Dion St-Pierre (WSP Canada Inc.) who prepared the Community & Environment item.
Pierre Pelletier, ing. (InnovExplo Inc.) who prepared the Metallurgical item.
Marz Kord, P. Eng. is the Qualified Person on behalf of Wallbridge and has approved the scientific and technical disclosures in this press release.
About Wallbridge Mining
Wallbridge is establishing a pipeline of projects that will support sustainable production and revenue as well as organic growth through exploration and scalability.
Wallbridge is currently exploring and completing a prefeasibility study on its recently purchased 100%-owned high-grade gold Fenelon project in Quebec with a production decision targeted for 2017. Wallbridge is also in discussions regarding several other advanced stage projects which could become the company's next mines. These discussions benefit from the operating capabilities Wallbridge demonstrated by safely and efficiently mining the Broken Hammer deposit in Sudbury, which was completed in October 2015.
Wallbridge is also continuing active partner-funded exploration on its large portfolio of nickel, copper, and PGM projects in Sudbury, Ontario. Currently, Wallbridge is completing a 20,000 metre fully partner-funded drilling program on its Parkin project designed to follow up on wide high-grade intersections in 2016.
Wallbridge also has exposure to active exploration for copper and gold in Jamaica and British Columbia through its 15.5% ownership of Carube Copper Corp. ("Carube Copper") (CUC:TSX-V, formerly Miocene Resources Limited).
This press release may contain forward-looking statements (including "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995) relating to, among other things, the operations of Wallbridge and the environment in which it operates. Generally, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".
Wallbridge has relied on a number of assumptions and estimates in making such forward-looking statements, including, without limitation, the ability to acquire the necessary permits and approvals to advance the Fenelon Mine Property toward production, the ability to safely and successfully dewater the underground workings at Fenelon, the ability to add to the existing resource base at Fenelon through drilling, the costs associated with the development and operation of its properties. Such assumptions and estimates are made in light of the trends and conditions that are considered to be relevant and reasonable based on information available and the circumstances existing at this time. A number of risk factors may cause actual results, level of activity, performance or outcomes of such exploration and/or mine development to be materially different from those expressed or implied by such forward-looking statements including, without limitation, whether such discoveries will resul t in commercially viable quantities of such mineralized materials, the possibility of changes to project parameters as plans continue to be refined, the ability to execute planned exploration and future drilling programs, the need for additional funding to continue exploration and development efforts, changes in general economic, market and business conditions, and those other risks set forth in Wallbridge's most recent annual information form under the heading "Risk Factors" and in its other public filings. Forward-looking statements are not guarantees of future performance and such information is inherently subject to known and unknown risks, uncertainties and other factors that are difficult to predict and may be beyond the control of Wallbridge. Although Wallbridge has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks th at cause actions, events or results not to be as anticipated, estimated or intended. Consequently, undue reliance should not be placed on such forward-looking statements. In addition, all forward-looking statements in this press release are given as of the date hereof.
Wallbridge disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws. The forward-looking statements contained herein are expressly qualified by this disclaimer.
SOURCE Wallbridge Mining Company Limited
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SOURCE: Wallbridge Mining Company Limited
Please visit Wallbridge's website at www.wallbridgemining.com, or contact: Wallbridge
Mining Company Limited, Marz Kord, President and CEO, Tel: (705) 682-9297 ext. 251,
Email: [email protected]; Linda Zubal, Vice President Corporate
Communications, Tel: (705) 682-9297 ext. 263, Email: [email protected]
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