Cadiscor Resources Inc. ("Cadiscor" or "the Company")(TSX VENTURE:
CAO)(FRANKFURT: DQN) is pleased to announce results of the Scoping
Study (the "Study") (referred to as a Preliminary Assessment under
43-101) for its 100% owned Discovery Gold Project in northwestern
Quebec. The Study was prepared by InnovExplo Inc. of Val-d'Or. The
Study concludes that the project could generate a positive cash
flow given certain assumptions. The total income generated by the
Discovery Project before taxes is $17.2 million, with a NPV of
$11.5 million at a discount rate of 5% and an internal rate of
return (IRR) of 27%. InnovExplo considers that an IRR of 27% is
sufficient to move forward with the project, considering that only
a small part of the resources was used in the study and that these
resources were established with cut-off grades reflecting a gold
price at US $650/oz. While Phase I has a negative IRR, Phase II,
the development and pre-production phase, generates an IRR of 100%.
The Study recommends that a first phase consisting of an
underground exploration program be undertaken, including extraction
of a 36,000-tonne bulk sample and an underground drilling program
to add new resources and upgrade the existing resources categories.
A second phase would include a pre-production period to develop the
underground infrastructure required to mine the deposit, followed
by production from the currently-known resources, without taking
into consideration the resources added and/or upgraded during Phase
I underground exploration.
Michel Bouchard, President and CEO of Cadiscor, stated, "The
Scoping Study results are very encouraging, and Discovery continues
to prove to be a project we can build on. We have been exploring
and drilling Discovery for the past two years, with each drilling
program resulting in increased resources. InnovExplo recommends
going underground with Phase I as a next step, in order to increase
confidence in resource continuity and grade through additional
drilling and underground bulk sampling. We agree with their
recommendation, and will now begin the environmental base line
study and preliminary permitting process on the Discovery
project."
Only 37% of the Measured and Indicated resources and 9% of the
Inferred resources were used in the Study. Successful upgrading of
the mineral resources to mineral reserves by definition drilling
and a prefeasibility study would imply a total mine life of seven
years if all mineral resources were to be converted in mineral
reserves, for an annual production of 44,000 ounces of gold at a
mill throughput rate of 245,000 tonnes per year.
Total Phase I costs are $23.1 million, with capital expenditures
of $16.3 million. The net program cost is $7.8 million after
revenues from the bulk sample of $6.1 million and exploration
credit of $9.2 million.
In Phase II, capital expenditures for the development and
pre-production of the mine will amount to $18.4 million, and
revenues will total $103.2 million. In Phase II, the NPV at a
discount rate of 5% is $20.8 million with a cash flow of $25
million and an IRR of 100%.
For the two phases, the total income generated by the Discovery
Project before taxes is $17.2 million, with an NPV of $11.5 million
at a discount rate of 5% and an internal rate of return (IRR) of
27%.
The highlights of the Study are as follows:
- The Mineral Resources of the Discovery project were based on
the results of 327 holes (122,360 metres) drilled by Cadiscor and
other companies.
- The resources considered in Phase I and II of this study
amount to 470,889 tonnes @ 6.67 g/t Au for the Indicated category,
and 135,364 @ 10.1 g/t Au for the Inferred category.
- The cut-off grades of the project were calculated on the basis
of 673,991 tonnes milled. For the long-hole stopes, a cut-off of
4.00 g/t was used. For shrinkage stoping, a cut-off of 5.00 g/t was
used to reflect higher mining costs.
- InnovExplo recommends a first phase consisting of an
underground exploration program to confirm the mining methods and
upgrade the resources by drilling the known zones. At the same
time, a bulk sample will be taken from two stopes on two different
levels to confirm several parameters: metallurgy, grade, dilution,
recovery, etc.
- The Inferred Resources will likely be upgraded by the proposed
drilling program and will allow a development decision to be made
regarding the deepening of the shaft in the second phase.
Additional tonnage in the vicinity of the proposed infrastructure
could minimize both the capital and operating per-tonne costs. As a
result, the cut-off grade would also decrease, and additional
tonnage below the current cut-off grade would become economic.
- The production target is 700 tonnes per day, seven days a
week, for 245,000 tonnes per year, at an average diluted gold grade
of 6.35 g/t. The average annual output is estimated at 44,000
ounces of gold.
- After mining and milling recoveries, 132,010 ounces will be
produced during Phase I and II. The duration of Phase I will be
thirty months, and Phase II will take three years. Phase I and II
are separated by a one-year interim period during which the
preparatory work for Phase II will be completed, as well as a
pre-feasibility study.
- For the base case financial analysis, a gold price of $850/oz
was used for the first five years and $750/oz for the last year.
The Canadian dollar and the US dollar were considered to be at par
(i.e., a constant exchange rate of US $1.00/CDN $1.00).
- A gold recovery of 96.0% was used for the purpose of the
analysis based on the results of metallurgical testing.
- Operating revenues are estimated at $117,970,790 for Phases I
and II. Operating costs average $98.61 per tonne of ore milled, or
US $503/oz over Phase II of the project. Total operating
expenditures, including stope development, amount to
$66,462,540.
- Total capital expenditures, including deferred development,
amount to $34,695,621.
- Not all the resources were used for the Phase II mining
scenario: 811,193 tonnes @ 5.21 g/t Au in the Measured and
Indicated categories and 1,410,136 tonnes @ 5.53 g/t Au in the
Inferred category remain available.
- The Sleeping Giant Mine and Mill acquisition will allow ore
from all properties to be milled, including Discovery.
This Scoping Study is preliminary in nature and it includes
inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves.
Therefore, there is no certainty that the preliminary assessment
will be realized.
The mineral resource estimate, scoping study and technical
report compliant with 43-101 Regulations were prepared by Carl
Pelletier, B.Sc., P.Geo., of InnovExplo, a exploration and mining
consulting firm based in Val-d'Or. Mr. Pelletier is a qualified and
independent person as defined by 43-101 Regulations.
Mr. Vincent Jourdain, P.Eng., Ph.D, is the qualified person as
defined by 43-101 Regulation and has over 20 years of experience in
mineral exploration. Mr. Jourdain has approved the content of this
press release.
Forward-Looking Statements
This press release contains forward-looking statements subject
to certain risks and uncertainties. There can be no assurance that
these statements will prove to be correct, and actual results and
future events could differ materially from those implied by such
statements. These risks and uncertainties are discussed in the
annual report filed with the securities commissions of Alberta,
British Columbia and Quebec, and in the 10-KSB annual report filed
with the US Securities and Exchange Commission. The Company does
not undertake to publicly revise or update any such statements on
the basis of new Information, future events or any other event.
THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE.
Contacts: Cadiscor Resources Inc. Michel Bouchard President
450-449-0066/1-877-440-0066 mbouchard@cadiscor.com www.cadiscor.com
Cadiscor Resources Inc. Linda Plante Investor relations
450-449-0066/1-877-440-0066 lplante@cadiscor.com 314 Finance Corp.
Tasso Baras Investor Relations 604-738-3882
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