Caledonia Mining Corporation Plc press release

RETRANSMISSION: AMEX Exploration Delivers Exceptional PEA on Perron Gold Project

2024-11-13

NYSE - New York Stock Exchange · Jersey

Pre-Tax IRR 59.5% and NPV C$948 M at US$2,000/oz Au Average Annual production of 124,000 oz Au, for years 1 to 5 over a 10-year LOM Cumulative Undiscounted Pre-Tax Cash Flow of C$1,333 M

Montreal, Quebec--(Newsfile Corp. - November 13, 2024) - Amex Exploration Inc. (TSXV: AMX) (FSE: MX0) (OTCQX: AMXEF) ("Amex" or the "Company") is pleased to announce the results of the NI 43-101 compliant Preliminary Economic Assessment (the "PEA") for its wholly-owned Perron gold project (the "Project"), located near the town of Normétal in the province of Quebec, Canada. The PEA was prepared in collaboration with independent engineering and geological firms Evomine, Bumigeme, Alphard, GoldMinds and Laurentia Exploration.

PEA Technical Presentation details

In connection with this news release, AMEX will hold a conference call and audio webcast on November 13, 2024, at 10 am EDT, followed by a question-and-answer session.

To access the call please register here: https://us02web.zoom.us/webinar/register/WN_0Yr91YVLSOeYZJKt1Fbmpg#/registration

You may also access the conference call on a listen-only basis via webcast at our website www.amexexploration.com. The audio webcast will be archived on www.amexexploration.com.

All dollar ($) amounts in this news release are in Canadian dollar ($) unless otherwise indicated.

Perron Preliminary Economic Assessment Highlights:

The following assumes a gold price of US$2,000/ounce ("oz") and a C$/US$ exchange rate of 1.35:1.

1,750 tonnes per day ("tpd") production rate with a Life-Of-Mine ("LOM") of 10 years; Average diluted grades for gold ("Au") at 5.26 grams per tonne ("gpt"); Years 1 to 5: average diluted grade at 6.49 gpt Au.

Average annual production of 101,000 oz Au, or 1,014,000 million oz Au over LOM; Years 1 to 5: average annual production of 124,000 oz Au (620,000 oz Au).

LOM All-in sustaining cash costs ("AISC") of US$807/oz Au; Years 1 to 5: AISC of US$739/oz Au.

Initial Capital Expenditure ("Capex") of $229 million; LOM Sustaining Capex of $230 million; Pre-tax IRR of 59.5% and After-tax IRR of 40.2%; Pre-tax NPV of $948 million and After-tax NPV of $525 million; Cumulative Pre-tax Undiscounted Net Free Cash Flow of $1,333 million and Cumulative After-tax Undiscounted Net Free Cash Flow of $767 million; and Pre-tax payback period of 1.5 years and After-tax payback period of 1.8.

CEO Commentary:

"This PEA marks an important milestone for AMEX and reaffirms our view that our fully owned Perron Project is a high-quality asset and has the potential of being a highly profitable stand-alone mining operation with minimal environmental impact" said Victor Cantore, President and Chief Executive Officer of AMEX Exploration. "The Project represents a strong combination of high-margin production and modest capital requirements, with the opportunity for significant resource growth in the future."

"This PEA demonstrates Perron's early potential based on a database close date of June 30th, 2024. Since the closing of the database, drilling has continued at depth and laterally and has already shown excellent high-grade intercepts beyond the currently defined mineral resource. This successful additional drilling demonstrates the continuation of mineralization and the upside potential for further resource and mine life additions in the future as we progress exploration."

Table 1: PEA Study Economic Analysis Highlights

| ECONOMIC ANALYSIS HIGHLIGHTS | Base Case | Spot | | | Gold Price | US$/Au oz | 2,000 | 2,600 | | Exchange Rate | C$/US$ | 1.35 | 1.39 | | Pre-Tax Free Cash Flow | CA$M | 1,333 | 2,242 | | Pre-Tax NPV (5%) | CA$M | 948 | 1,625 | | Pre-Tax IRR | % | 59.5 | 87.5 | | Pre-Tax Payback Period | Years | 1.5 | 0.5 | | Ratio Pre-Tax NPV (5%) to CAPEX | CA$M/CA$M | 4.1 | 7.8 | | After-Tax Free Cash Flow | CA$M | 767 | 1,289 | | After-Tax NPV (5%) | CA$M | 525 | 914 | | After-Tax IRR | % | 40.2 | 59.7 | | After-Tax Payback Period | Years | 1.8 | 1.2 | | Ratio After-Tax NPV (5%) to CAPEX | CA$M/CA$M | 2.3 | 4.4 |

Table 2: PEA Physical Highlights

| PHYSICAL HIGHLIGHTS | | | | Annual Production - First 5 Years Average | Oz/year | 124,000 | | Annual Production - Life-of-mine Average | Oz/year | 101,000 | | Life-of-Mine Production | Oz | 1,014,000 | | Mill Processing Rate | tpd | 1,750 | | Life-of-Mine Tonnes Processed | kt | 6,316 | | Average Grade Processed - First 5 years | Au gpt | 6.49 | | Average Grade Processed - Life-of-Mine | Au gpt | 5.26 | | Mine Life | Years | 10 | | Average Processing Recovery Rate | % | 95.0 |

Table 3: PEA Study Financial Highlights

| FINANCIAL HIGHLIGHTS | | | | Average Operating Cost | US$/Au oz | 633 | | Average All-in Sustaining Cost ("AISC") | US$/Au oz | 807 | | Total Initial Capital Expenditures* | CA$M | 229 | | Total Sustaining Capital Expenditures | CA$M | 238 |

_*Inclusive of gold sales net of royalty ($62M) in pre-production period_

1. The PEA is preliminary in nature and is based, in part, on Inferred Mineral Resources. Inferred Mineral Resources are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the economic forecasts on which the PEA is based will be realized. 2. The economic analysis of the project was carried out using a discounted cash flow approach on a pre-tax and after-tax basis with a discount rate of 5%. 3. Revenue was based on a long-term gold price of $2,000/oz in USD. 4. Cost estimates were prepared in C$. 5. An exchange rate of 0.74 USD per 1.00 CAD was assumed.

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Underpinned by world class infrastructure, the Perron PEA demonstrates a top-tier high margin gold mining operation in the stable jurisdiction of Quebec, Canada. The Project is located within the prolific Abitibi region, one of the most prolific gold belts in the world.

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The PEA results confirm that Perron has the potential to be a stand-alone and highly profitable operation with an excellent internal rate of return (IRR) and after-tax net present value (NPV) at a range of gold prices.

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The PEA shows that Perron has the potential to be a mine with limited environmental impact, utilizing the mined out open pits to store tailings and therefore avoiding the construction of a tailings management facility.

Mining

The mine will be operated as a mechanized underground operation, which will be complemented by open pit production. The mine will have an overall average production rate of 1,750 tpd of mineralized material over a 10-year production period that is preceded by a 2-year pre-production period.

The selected underground mining method is longitudinal longhole stoping with cemented rockfill. Stope dimensions average 17.5 m in length, 25 m in height, and 5.7 m in width (LOM average) with a minimum mining width of 3.0 m. The different sectors of the mine will be accessed via ramps and drifts to allow the efficient circulation of mobile mining equipment and to satisfy ventilation and emergency egress requirements. Mineralized material will be extracted using a fleet of owner-operated equipment that includes 10 tonne LHDs and 42 tonne haul trucks.

Five open pits are included in the mine plan and utilize conventional truck and shovel mining that will be executed by a contractor. The pits will begin to be mined in the preproduction period, with material completely extracted by year 4 as they are sequenced such that they can be used to manage all tailings generated by the mill.

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_002full.jpg)

_Figure 1: Mine Design _

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_002full.jpg

Table 4: Mine Physicals

| | | Total | Yr -2 | Yr -1 | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 | | Mineralized material mined - Underground | kt | 5,653 | 8 | 181 | 492 | 343 | 503 | 462 | 653 | 656 | 653 | 651 | 654 | 398 | | Waste rock mined - Underground | kt | 2,948 | 151 | 336 | 302 | 290 | 261 | 320 | 299 | 264 | 253 | 203 | 224 | 45 | | Subtotal - Underground | kt | 8,601 | 159 | 517 | 794 | 633 | 764 | 782 | 952 | 920 | 906 | 855 | 878 | 443 | | Mineralized material mined - Open pit | kt | 663 | 85 | 85 | 118 | 33 | 148 | 193 | 0 | 0 | 0 | 0 | 0 | 0 | | Waste rock mined - Open pit | kt | 6,271 | 868 | 1,302 | 672 | 868 | 1,461 | 1,101 | 0 | 0 | 0 | 0 | 0 | 0 | | Overburden mined - Open pit | kt | 2,878 | 691 | 409 | 789 | 924 | 65 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Subtotal - Open pit | kt | 9,812 | 1,644 | 1,796 | 1,579 | 1,825 | 1,673 | 1,295 | 0 | 0 | 0 | 0 | 0 | 0 | | Strip ratio - Open pit | - | 13.8 | 18.3 | 20.1 | 12.3 | 53.9 | 10.3 | 5.7 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | Total mining | kt | 18,413 | 1,803 | 2,313 | 2,373 | 2,458 | 2,438 | 2,077 | 952 | 920 | 906 | 855 | 878 | 443 |

Processing

A total of 1,750 tpd of material will be processed in a plant that consists of primary crushing, followed by a grinding circuit consisting of a semi-autogenous grinding mill of 5.5 m diameter x 1.8 m long in an opened circuit and a ball mill of 4.0 m diameter x 6.7 m long in a closed circuit with cyclones - SABC circuit. A gravity circuit followed by leaching will recover coarse gold from the cyclone underflow, while the cyclone overflow, at a P80=74 microns, is treated in a six (6) tank carbon-in-leach circuit, followed by SO2/air cyanide destruction. Gold will be recovered in an adsorption-desorption-recovery circuit and electrowinning cells, with gold room recovery and production of bullion bars.

The CIL tailings after the cyanide destruction will be pumped to a high-rate thickener to increase the slurry density to 62-64 % solid and pumped to empty pits.

The process plant gold recovery is estimated to average 95.0% over the LOM.

The process plant building will include a laboratory, mill offices, a dry and an electrical and mechanical shop.

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_003full.jpg)

Figure 2: Flowsheet

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_003full.jpg

Table 5: Gold Production by Source

| | | | | Pre-production | Production | | | | | | | | | | | | | | | Total | Yr -2 | Yr -1 | Yr 1 | Yr 2 | Yr 3 | Yr 4 | Yr 5 | Yr 6 | Yr 7 | Yr 8 | Yr 9 | Yr 10 | | Stockpiles (OP & UG) | Mill Feed | kt | 531 | - | 46 | 113 | 250 | 4 | | 1 | - | 2 | 4 | - | 112 | | Grade | Au gpt | 3.00 | - | 4.73 | 3.92 | 1.83 | 1.51 | 2.02 | 6.68 | - | 5.95 | 5.28 | - | 3.87 | | | Gold recovered | Au koz | 49 | - | 7 | 13 | 14 | | | | - | | 1 | - | 13 | | | Open pit | Mill Feed | kt | 340 | - | - | 1 | 28 | 133 | 178 | - | - | - | - | - | - | | Grade | Au gpt | 1.91 | - | - | 2.13 | 1.27 | 1.72 | 2.16 | - | - | - | - | - | - | | | Gold recovered | Au koz | 20 | - | - | 0 | 1 | 7 | 12 | - | - | - | - | - | - | | | Underground | Mill Feed | kt | 5,445 | - | 75 | 486 | 343 | 503 | 461 | 638 | 639 | 638 | 635 | 639 | 389 | | Grade | Au gpt | 5.68 | - | 7.39 | 7.44 | 11.48 | 6.20 | 7.88 | 7.03 | 5.54 | 3.07 | 3.92 | 3.76 | 3.16 | | | Gold recovered | Au koz | 945 | - | 17 | 110 | 120 | 95 | 111 | 137 | 108 | 60 | 76 | 73 | 38 | | | Combined | Mill Feed | kt | 6,316 | - | 121 | 599 | 621 | 641 | 639 | 639 | 639 | 641 | 639 | 639 | 501 | | Grade | Au gpt | 5.26 | - | 6.38 | 6.77 | 7.13 | 5.24 | 6.29 | 7.03 | 5.54 | 3.08 | 3.92 | 3.76 | 3.32 | | | Gold recovered | Au koz | 1,014 | - | 24 | 124 | 135 | 103 | 123 | 137 | 108 | 60 | 77 | 73 | 51 | |

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_004full.jpg)

Figure 3: Gold Production

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_004full.jpg

Infrastructure

The Project is approximately 5 kilometers from the town of Normétal, Quebec and is accessible via a well-maintained forestry road. The Project will require construction of the following supporting infrastructure items: 1,750 tpd process plant complex, offices, dry, maintenance shop and warehouse; gatehouse; 5 kilometers of 120kV transmission lines; 120 kV main substation; final effluent water treatment plant; surface water management facility, including ditches, pond and pumping stations; service and haulage roads; potable water and sewage systems; underground mine portal, mine ventilation systems (intake and exhaust) and waste dump and overburden storage facilities. No camp will be required considering the nearby qualified labor pool.

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_005full.jpg)

Figure 4: Suggested Infrastructures Arrangement

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_005full.jpg

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_006full.jpg)

Figure 5: General site arrangement

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_006full.jpg

Workforce

During the 18-month construction period of the mine, the workforce will peak at approximately 250 people, this is in addition to employees who would be required for open pit and underground mining and G&A.

During steady state operations, the average number of employees (mine, process plant and G&A) is estimated at 164 people, excluding contractors (open-pit mining, contract services, etc.).

Tailings

The tailings storage plan will take advantage of open pits that will be mined in the first half of the mine life. Process plant rejects will be thickened and pumped to the mined-out pits sequentially for permanent storage. Tailings will then consolidate over time and excess water will either be used for processing requirements or discharged to the environment once quality conditions are met. This concept aims to limit the environmental impact of the Perron Project, to limit the risks related to traditional Tailings Management Facility (TMF) stability, to simplify short-term and long-term monitoring and to greatly reduce the capital and operating costs related to tailings management.

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_007full.jpg)

_Figure 6: Visual of in-pit tailings disposal _

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_007full.jpg

Capital Expenditure

The total initial construction capital expenditure ("CAPEX") is forecasted at $229M after accounting for $62M in gold sales revenues (pre-production credits). Capitalized mine development prior to commercial production is expected to be approximately $112M, comprised of $38M related to open pit mining and $74M related to underground mining. The majority of the capitalized open pit mining is driven by the strategic decision to complete the mining of a small open pit in the pre-production period in order to be able to start disposing tailings at the commissioning of the process plant. The construction capital accounts for the site development, water treatment and infrastructure area including a truck shop, warehouse and an administration facility. Additionally, the capital estimate includes $15.1M of EPCM and indirect costs and a contingency of $25M.

Quotations from reputable suppliers were obtained for most of the large and high-cost equipment required for the plant, mine and site infrastructure. For other equipment and supplies, cost estimates were based on comparable projects, historical data or derived through consultants' in-house databases.

Table 6: Capital Expenditure

| Item | CA$M | | Site Preparation & Infrastructures | 16.6 | | Power & Electrical | 11.2 | | Water & Tailings Management | 10.3 | | Process Plant | 58.0 | | EPCM / Indirects | 15.1 | | Contingency | 25.0 | | Subtotal | 136.2 | | Preproduction, Startup & Commissioning | 131.3 | | Mobile Equipment (*quotations received) | 23.3 | | Subtotal | 290.8 | | Less: Pre-Prod. Credit (Gold Sales) net of TC/RX & Royalties | -62.1 | | Total | 228.7 |

The sustaining capex ("SUSEX") is estimated to be $238M, including $8M of closure and rehabilitation costs. Underground mining SUSEX is earmarked for mining development, additional equipment, replacement units, and major repairs. Other sustaining capex captures in-pits tailings storage, infrastructures and G&A.

Table 7: Sustaining Capital Expenditure

| Item | LOM Total (CA$M) | Avg. LOM (US$/Au oz) | | Underground & Others | 229.8 | 167.8 | | Closure and Rehabilitation | 7.8 | 5.7 | | Total | 237.6 | 173.6 |

Operating Costs

Life of Mine (LOM) total operating cost is estimated at US$633 per ounce of gold produced, as summarized below. The LOM total AISC is estimated to be US$807 per ounce of gold produced based on average annual gold production of 101,000 ounces over the 10 years of mine life. This cost structure places the Project in the bottom quartile of the global gold cost curve, which is mostly due to the high-grade nature of the mineralized material and to the simplicity of mining.

Table 8: Operating Costs

| Item | LOM Total (CA$M) | Avg. LOM (CA$/t milled) | Avg. LOM (US$/Au oz) | | Mining Costs (Open pit + underground) | 536.7 | 84.97 | 394 | | Processing | 163.0 | 25.81 | 120 | | General & Administration | 116.7 | 18.47 | 86 | | Offsite Costs | 5.5 | 0.87 | 4 | | Royalty (1.5%) | 39.8 | 6.31 | 29 | | Total Operating Costs | 861.7 | 136.42 | 633 | | Sustaining Capital Expenditure | 237.6 | 37.62 | 174 | | All-in Sustaining Capital ("AISC") | 1,099.3 | 174.04 | 807 |

Financial Analysis

At base case gold price of US$2,000/oz and exchange rate of 1.35, the Project generates after-tax Net Present Value ("NPV") of $525M using 5% discount rate and an after-tax Internal Rate of Return ("IRR") of 40.2% with a payback period of 1.8 years from the commencement of commercial production. The Project generates cumulative free cash flow of $767M and average annual free cash flow of $100M over the 10 years production period. Total taxes payable over LOM at the base case gold price is $566M.

[](https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_008full.jpg)

_Figure 7: After-Tax FCF_

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/2667/229756_3515f5cda488cbe7_008full.jpg

The PEA financial economic analysis is significantly influenced by gold prices. At spot prices of US$2,600/Au oz and exchange rate of 1.39, the Project generates an after-tax NPV of $914M and an after-tax IRR of 59.7% with a payback period of 1.2 years. A sensitivity analysis was performed on the gold price, CAPEX, overall OPEX and exchange rate.

Table 9 & 10: Sensitivity Analysis on NPV (5%) and IRR

| Gold Price | After-Tax NPV (5%) (CA$M) | Initial CAPEX | Total OPEX | FX | | | | | US$/Au oz | Base Case | -20% | +20% | -20% | +20% | -20% | +20% | | 1,500 | 231 | 286 | 175 | 300 | 157 | 43 | 407 | | 1,750 | 379 | 432 | 325 | 447 | 310 | 171 | 582 | | 2,000 | 525 | 576 | 473 | 591 | 457 | 290 | 755 | | 2,250 | 669 | 719 | 619 | 735 | 603 | 408 | 927 | | 2,500 | 813 | 861 | 764 | 877 | 747 | 525 | 1,097 | | 2,750 | 956 | 1,002 | 908 | 1,020 | 891 | 641 | 1,267 | | 3,000 | 1,098 | 1,143 | 1,052 | 1,161 | 1,034 | 756 | 1,437 | | | | | | | | | | | Gold Price | After-Tax IRR | Initial CAPEX | Total OPEX | FX | | | | | US$/Au oz | Base Case | -20% | +20% | -20% | +20% | -20% | +20% | | 1,500 | 22.8% | 30.6% | 16.9% | 26.8% | 18.1% | 8.9% | 33.7% | | 1,750 | 32.0% | 40.7% | 25.5% | 35.4% | 28.3% | 18.7% | 43.3% | | 2,000 | 40.2% | 49.7% | 33.1% | 43.2% | 37.0% | 26.6% | 52.1% | | 2,250 | 47.8% | 58.0% | 40.1% | 50.5% | 44.9% | 33.7% | 60.3% | | 2,500 | 54.9% | 65.8% | 46.7% | 57.4% | 52.3% | 40.2% | 68.1% | | 2,750 | 61.7% | 73.2% | 53.0% | 64.0% | 59.3% | 46.3% | 75.6% | | 3,000 | 68.2% | 80.4% | 59.0% | 70.4% | 65.9% | 52.1% | 82.9% |

Permitting and Environment

The opening and operation of a mine that has a production capacity equal to or less than 2,000 tonnes per day is not subjected to an environmental impact assessment ("EIA") according to chapter Q-2 of the _Environmental Quality Act_("EQA") for the emission of a ministerial decree. As modelled in the PEA, the Perron Project would therefore not submit to processes of and EIA and to the Bureau d'audiences publiques sur l'environnement (''BAPE''), as per current regulation, as the estimated production of 1,750 tonnes per day is below the threshold. However, an application for a ministerial authorization will need to be submitted to the Ministère de l'Environnement, de la Lutte contre les changements climatiques, de la Faune et des Parcs (''MELCCFP''). Studies will be required as part of this application including, hydrological studies, hydrogeological and geochemical analysis, soil quality analysis, surface water, groundwater and sediment quality, characterization of the natural environment, including water bodies, wetlands, species with special status and wildlife inventories for certain species.