The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Study considers 60,000 oz/yr open pit, heap leach operation North of 60 Mining News – January 21, 2022
Looking down on the heap leach pad during a 2019 flyover of the past-producing Brewery Creek gold mine in the Yukon.
Sabre Gold Mines Corp. Jan. 18 published the results from a preliminary economic assessment that outlines a 60,000-ounce-per-year gold mining operation at its road-accessible Brewery Creek project about 35 miles (55 kilometers) east of Dawson City, Yukon.
Brewery Creek is the home to a mine that produced roughly 280,000 ounces of gold over seven years of mining that began in 1996. This operation used seasonal heap leaching – a method of gold recovery that involves stacking ore in a lined facility and using cyanide to leach the gold from ore mined from a series of seven open pits spanning the property.
Golden Predator Mining Corp., the former operator at Brewery Creek, had previously published a PEA and was planning to complete a feasibility study for the project. Following the September merger between Golden Predator and Arizona Gold Corp., the emerging Sabre Gold decided to revaluate Brewery Creek with a new PEA.
The new PEA also considers the heap leach recovery of gold from open-pit mining along the same trend mined at the turn of the 21st century.
According to a calculation completed in December, Brewery Creek hosts 34.5 million metric tons of measured and indicated resources averaging 1.03 grams per metric ton (1.14 million oz) gold, plus 35.9 million metric tons of inferred resource averaging 0.88 g/t (1.02 million oz) gold.
The PEA considers mining 18.66 million metric tons of ore averaging 1.05 g/t gold from four open-pit areas – Keg, Lucky, Bohemia-Schooner, and East and West Big Rocks.
It is estimated that this would provide enough ore to produce 473,000 oz of gold over an initial eight-year mine life.
According to the PEA, this operation would generate an after-tax net present value (5% discount) of US$112 million and an internal rate of return of 27.6% at a US$1,700/oz gold price. At US$1,900/oz gold, the after-tax NPV increases to US$157 million, and the IRR climbs to 35.7%.
At the US$1,700/oz base case, the Brewery Creek mine would generate an after-tax average annual cash flow of $36 million, and it would take roughly 2.6 years to pay back the US$105 million of preproduction capital to put the mine in operation.
Sabre says the Brewery Creek property hosts plenty of potential to expand and improve upon the parameters outlined in the PEA, which the company plans to investigate further this year.
"The PEA and initial results confirms our plans to resume production at Brewery Creek with what will be low re-start capital with attractive economics, which we believe will be further enhanced in 2022," said Sabre Gold Mines President and CEO Giulio Bonifacio.
Opportunities to enhance the value of the operation outlined in the PEA include:
• Further expansion of the leachable mineral resource at several identified targets.
• Upgrade current inferred resource in the deposits considered in the PEA to the indicated category.
• Evaluation of new leach pad locations to accommodate material from additional deposits.
• Further evaluation of the potential of the sulfide material found at depth in all the deposits that are not amenable to heap leach recovery. Preliminary metallurgical testing has shown good recoveries of gold can be obtained by a flotation process.
• Continue expanding and upgrading resources at three oxide deposits not included in the PEA – Classic, Lonestar, and Sleeman.
Sabre Gold intends to explore these and the other value-enhancing opportunities outlined in the PEA as it prepares to advance feasibility level studies for Brewery Creek.
"The PEA is advanced in several categories as the predecessor company was initially targeting completion of a feasibility study," said Bonifacio. "Sabre Gold intends to move to a feasibility level study upon completion of the advancement of key opportunities, those of which will not impact our targeted permitting timeline. Our permitting efforts will also now focus on expanding the previously permitted area for purposes of allowing for increases to our annual production profile."
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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