Snowline Outlines Plan for Major Canadian Gold Mine
PEA for Valley gold deposit released
Snowline Gold Corp (TSXV: SGD) has released the preliminary economic assessment for its Valley gold deposit, part of the Rogue gold project in Canada’s Yukon Territory.
Capital costs for a conventional open pit mining and 25,000 tonne per day milling operation were forecast at C$1.685 billion.
Based on measured and indicated resources of just under 8 million ounces, the mine would produce 6.8Moz of gold over 20 years.
Valley is forecast to produce 544,000oz per annum of gold at all-in sustaining costs of just US$569 an ounce in the first five years of production, and an average 341,000ozpa at AISC of US$844/oz over the life of the mine.
Using a conservative gold price of US$2150/oz, the project has a post-tax net present value (5% discount rate) of C$3.37 billion, internal rate of return of 25% and a payback period of 2.7 years.
Increasing the gold price assumption to US$3150/oz increases the NPV to C$6.8 billion, the IRR to 37% and reduces the payback period to 2.1 years.
Average annual free cashflow is forecast at C$426 million, based on a US$2150/oz gold price, increasing to C$728 million, using a US$3150/oz gold price.
“This PEA reinforces our conviction that Valley can become a world class mining operation developed at a high standard, with clear potential to bring significant economic benefits to the Yukon,” Snowline CEO Scott Berdahl said.
“The rare combination of high margins and large scale makes for a robust asset with stability through a wide range of market conditions. The low strip ratio and strong gold grades enhance project economics by increasing mining efficiency while reducing the overall project footprint.”
Snowline is planning to move to the next stage of studies, environmental work and First Nations with the aim of having the project construction ready by 2030.
Field work to support a prefeasibility study is already underway.
On Thursday, Snowline appointed director and former Great Bear Resources chief financial officer and vice president of business development Calum Morrison as president to support Berdahl and former Pan American Silver CFO Rob Doyle as a director.
Other recent appointments include Lauren McDougall as CFO, Victor Vdovin as VP of engineering and Oliver Curran as VP of environment and permitting.
“Multiple field studies to support advanced technical studies are now underway on site, alongside environmental baseline work to inform future assessment and permitting,” Berdahl said.
“Combined with our ongoing regional exploration, we are excited by the path ahead and the opportunity to advance an important new contributor to the Canadian gold mining landscape.”
Snowline will hold a conference call on Tuesday morning, Canadian time, to discuss the results of the PEA.