VANCOUVER, Aug. 29, 2016 /CNW/ - Rye Patch Gold Corp.
(TSX.V: RPM; OTCQX: RPMGF; FWB: 5TN) (the "Company" or "Rye
Patch") is pleased to announce that construction of the new South
Heap Leach facility has started at the Florida Canyon mine located
in Pershing County, Nevada.
The Company completed the acquisition of the Florida Canyon
mine on July 28, 2016. Since
the purchase, the Florida Canyon mine has crushed the under-liner
material for the South Heap Leach facility; prepared the primary
crusher for the move from the Standard Gold mine located 6
kilometres to the south to its new home adjacent to the South Heap
Leach facility; completed maintenance on the mining fleet; and is
now breaking ground for the ponds and pad of the South Heap Leach
facility.
The Florida Canyon gold mine is fully permitted, has been in
continuous production since 1986 and is currently producing gold
from its existing leach pad facilities at Florida Canyon and
Standard Gold. The Company is restarting the Florida Canyon
mine, which includes the new heap leach pad and a new waste storage
facility. Mining will be from four areas within the existing
pit and constitutes a planned layback of the Florida Canyon gold
deposit. A total of 63.81Mtons (58Mtonnes) of ore is planned
to be mined over an 8-year period. An estimated average
recovery of 71.1% would yield 602,000 ounces of gold over the life
of mine. Rye Patch expects Initial production from the South
Heap Leach facility to occur in the fourth quarter of 2016 and
anticipates achieving commercial production from the new leach pad
by the second quarter of 2017.
William Howald, the Company's
President and CEO, stated, "The Company has embarked on a
transformational journey to become Nevada's next new gold producer. We are
creating a new and exciting company with anticipated initial annual
production of 75,000 ounces gold expected to begin in early
2017. With an ore body that shows great potential to expand
the existing Measured and Indicated Resource of 1.1 million
ounces of gold, Florida Canyon provides Rye Patch with a solid
foundation from which to grow and significant exploration upside
along a trend that has been ignored for the past 30 years. As
history has shown, the players with a large land position along a
major gold trend have a significant advantage and opportunity to
grow a formidable mining company."
As announced by news release dated May
25, 2016, and filed on SEDAR July 8,
2016, Mine Development Associates ("MDA") completed a
Preliminary Economic Assessment (the "PEA") for the Florida Canyon
gold mine titled "Technical Report – Preliminary Economic
Assessment for the Florida Canyon Mine, Pershing County, Nevada USA" effective
March 16, 2016, dated April 18, 2016 and revised
June 22, 2016 . The PEA was completed based on a
US$1,000 per ounce gold price for the
first two years and a US$1,150
per ounce gold price for the remaining life of mine.
PEA and Florida Canyon mine Highlights:
- Average production of approximately 75,000 ounces of gold per
year for 8 years;
- US$1,000 per ounce of Au for
years 1 to 2 and US$1,150 per ounce
of Au used after year 2;
- Pre-tax NPV (7.5%) of US$65.43
million, with a 41.5% IRR;
- Cash cost per gold ounce is calculated at US$759 per ounce;
- Fully permitted expansion;
- 1,126,600 ounces of gold in the measured and indicated
category;
- US$27 million Credit Facility;
- Significant potential synergies with existing Oreana trend
resource assets; and
- Tremendous exploration and further development potential.
Table 1: PEA
Sensitivity Analysis (AFTER TAX)
|
% of Base
Case
|
NPV7.5% (US$mm)
|
IRR (%)
|
Gold
Price Yr 1 &
2 US$/oz
Au
|
Gold
Price After Yr
2 US$/oz
Au
|
100%
|
$45.845
|
34.4%
|
$1,000
|
$1,150
|
110%
|
$80.194
|
53.8%
|
$1,100
|
$1,265
|
120%
|
$114.543
|
73.4%
|
$1,200
|
$1,380
|
The Company cautions that the PEA is preliminary in nature in
that it is based on Inferred Mineral Resources which are considered
too speculative geologically to have the economic considerations
applied to them that would enable them to be characterized as
mineral reserves, and there is no certainty that the PEA will be
realized. Mineral resources that are not mineral reserves do not
have demonstrated economic viability.
The Company's decision to place the Florida Canyon mine into
production is not based on a feasibility study of mineral reserves
demonstrating economic and technical viability, and the Company
cautions that historically such projects have a much higher risk of
economic or technical failure.
All mining and ancillary equipment required to operate the
Florida Canyon mine is in place together with a team of high
quality experts experienced in mining a low‑cost operation with a
successful 30‑year history.
Following the restart of Florida Canyon, Rye Patch intends to
advance its other nearby resource projects as well as drill oxide
targets at the mine and along the mine trend between Florida Canyon
and the Standard Gold mine (approximately 10 kms). Significant
exploration targets exist within the pit limits and beneath the
Florida Canyon oxide deposit. These near- and medium-term
opportunities will be addressed once the mine is in full
production. From an operational viewpoint, substantial
synergies exist with Florida Canyon and the nearby Lincoln Hill and
Wilco resource projects. The outlying oxide resources can be
mined and leached at site with carbon transported to the Florida
Canyon stripping and refining facility. This benefit will
reduce capital costs for the Lincoln Hill and Wilco projects.
Longer-term opportunities exist along the Oreana trend. The
Company controls over 180 square kilometres of prospective land
along the trend and is one of the largest landholders in
Pershing County.
Mr. William Howald, AIPG
Certified Professional Geologist #11041, Rye Patch Gold's CEO and
President, is a Qualified Person as defined under National
Instrument 43-101. He has reviewed and approved the contents of
this news release.
About Rye Patch Gold Corp.
Rye Patch Gold Corp. is a Nevada based, Tier 1, well-funded mining
company led by a seasoned management team with a wide range of
operations and project development successes. The team is
engaged in the mining and development of quality resource-based
gold and silver mines and projects along the established Oreana
trend in west central Nevada. Benefitting from its strong
financial position, the Company has leveraged its cash to acquire
the operating Florida Canyon gold mine. The Company now
controls a trend-scale platform with operations, replacement assets
and exploration upside. The combination of operations
and exploration concentrated along a major Nevada gold trend positions Rye Patch as an
emerging mid-tier gold producer with tremendous value added
potential. For more information about the Company, please
visit our website at www.ryepatchgold.com.
On behalf of the Board of Directors
'William Howald'
William C.
(Bill) Howald, CEO & President
This news release contains forward-looking statements
relating to future plans and objectives of the Company, proposed
operations of the Company including mine development, future events
and conditions and other statements that are not historical facts,
all of which are subject to various risks and uncertainties. The
Company's actual results, programs and financial position could
differ materially from those anticipated in such forward-looking
statements as a result of numerous factors, some of which may be
beyond the Company's control. These factors include: the failure of
the Company to satisfy the conditions in the credit agreement
entered into with Macquarie Bank Limited ("Credit Facility"), mine
redevelopment plans and production results; the availability of
funds; the financial position of Rye Patch; the timing and content
of work programs; the results of exploration activities and
development of mineral properties; the interpretation of drilling
results and other geological data; the reliability of calculation
of mineral resources; the reliability of calculation of precious
metal recoveries; the receipt and security of mineral property
titles; project cost overruns or unanticipated costs and expenses;
fluctuations in metal prices; currency fluctuations; and general
market and industry conditions.
Forward-looking statements are based on the expectations and
opinions of the Company's management on the date the statements are
made. The assumptions used in the preparation of such statements,
although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be
placed on forward-looking statements. As a result, the
Company cannot guarantee that the Credit Facility and related
transactions will be completed on the terms and within the time
disclosed herein or at all.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Rye Patch Gold