Richmont Mines Inc. (RIC) (RIC:CA) , an established Canadian gold development, exploration, and production company, has completed a Preliminary Economic Assessment (PEA) for its valuable Island Gold mine. This news marks another milestone that continues to illustrate the company’s promising growth prospects.
The PEA considered an 800 tonne per day mining operation that solely evaluates the December 31, 2014 Mineral Resources that are located in the most continuous portion of the deposit between the 450 metre and 860 metre levels.
"Our growing confidence in the potential of the Island Gold Mine underpins our long-term vision for this core asset with the study being just the first step in unlocking that potential,” said Renaud Adams, CEO of Richmont Mines. “Phase 1 evaluated the most cost effective extraction of a portion of the Mineral Resources located below the 450 metre level under a Base Case scenario of 800 tonnes per day, as well as a potential Expanded Case from 2017. Implementation of a dedicated haulage ramp scenario would leverage the accelerated underground development program underway in 2015 and into 2016.”
Several highlights of the Island Gold Mine PEA include:
● Following the 2015 to 2016 transitional period, a Base Case scenario using average productivity levels of 800 tonnes per day estimates potential average production of approximately 78,000 gold ounces per year from 2017 to 2022, at an expected average diluted mined grade of 8.67 g/t.
● In the first half of 2017, it is expected that production will be extracted from three mining horizons, with 80% of the mineralized material located in the lower two horizons (50% in the third mining horizon).
● The Base Case scenario considers that project capital expenditures related to underground development and infrastructure, and milling and tailings facilities will be completed in 2016 with only sustaining capital investment requirements over the six year period from 2017 to 2022.
● The Base Case estimates average cash costs of approximately $552 per ounce for the period 2017 to 2022.
● For the Base Case, total sustaining capital costs are expected to be $40.5 million for the period 2017 to 2022 with the majority of the capital expenditures in the first three years.
● The PEA shows that once mining activities reach the third mining horizon in the first half of 2017, mining productivity could potentially be increased to 1,150 tonnes per day.
"To best position the operation for long-term shareholder value creation, we have taken a very disciplined and phased approach when evaluating potential near-term growth opportunities to ensure we also maintain optimal flexibility for future production growth opportunities,” said Adams. “Accordingly, while the potential 1,150 tonne per day expansion scenario indicates the utilization of a dedicated haulage ramp as the preferred option, we also see potential for additional Mineral Resources below the 1,000 metre level and as such, we will continue to evaluate the potential for an internal shaft system in conjunction with the ramp system as we gain additional information from our drilling programs."
The company has revealed a number of positive developments in the past few months. In September alone, Richmont Mines was addedto the S&P/TSX SmallCap Index, and announced an updated versionof their Island Gold Mine deep drilling plan, which included tests of a nearby untapped resource.
Operated by Richmont since 2007, the Island Gold Mine has proven to be a valuable asset, estimated to reap long-term benefits for its investors. The company's projected growth and expansion for increased production will further their reputation as a premiere gold-mining company.
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