Blue Moon Announces Robust Results of the Preliminary Economic Assessment for Its Blue Moon VMS Deposit Including an After-Tax Base Case IRR of 38% and 48% Using Spot Prices

2025-03-03

TSXV - TSX Venture Exchange · Copper · Silver · Gold · Zinc · Lead · Canada

TORONTO, March 03, 2025 (GLOBE NEWSWIRE) -- Blue Moon Metals Inc. (“ Blue Moon ” or the “ Company ”) ( TSXV: MOON ), is pleased to announce an updated Mineral Resource estimate and the results of a Preliminary Economic Assessment (“PEA”) for the Blue Moon volcanogenic massive sulphide (“VMS”) deposit (the “Project”), located in Mariposa County, California, which will be summarized in an independent National Instrument (“NI”) 43-101 Technical Report within 45 days. The study was commissioned by Blue Moon and carried out by Micon International Ltd. (“Micon”) and Resource Development Associates, Inc. (“RDA”). It provides a base case assessment for the development of the Project as an underground mine with onsite production of saleable zinc and copper concentrates.

Highlights

Table 1: PEA Results Summary

| | | PEA Base Case | -10% Pricing | +10% Pricing | Long-term Consensus Price Forecast ( 3) | Spot Prices (Feb. 2025 avg.) | | After-Tax NPV ($M, 8% discount rate) ( 2) | $ 244 | $163 | $324 | $260 | $340 | | | After-Tax IRR (%) ( 2) | 38 % | 29% | 46% | 39% | 48% | | | First 6 Years of After-Tax Cashflow ($M) | $ 367 | $293 | $442 | $382 | $458 | | | Payback Period (years) | 2.4 | 2.9 | 2.0 | 2.3 | 1.9 | | | C1 Cost ($/lb ZnEq) | $ 0.60 | $0.60 | $0.61 | $0.60 | $0.55 | | | LOM Average Head Grade (ZnEq %) | 12.55 | 12.66 | 12.47 | 12.72 | 13.83 | | | Nominal processing capacity (tonnes per day) | 1,800 | | | | | | | Initial Capital Cost ($M) | $ 144.5 | | | | | | | Sustaining Capital Cost ($M) | $ 64.5 | | | | | | | Life of Mine (“LOM”) Capital Cost ($M) | $ 209.0 | | | | | | | Average annual payable production (LOM) | Copper | | | 7,237 | 000'lbs | | | Zinc | | | 62,260 | 000'lbs | | | | Gold | | | 22,566 | oz | | | | Silver | | | 681,784 | oz | | | | ZnEq | | | 151,046 | 000'lbs | | | | Metal prices assumed | Copper $/lb | 4.20 | 3.78 | 4.62 | 4.75 | 4.23 | | Zinc $/lb | 1.25 | 1.13 | 1.38 | 1.26 | 1.27 | | | Gold $/oz | 2,200 | 1,980 | 2,420 | 2,181 | 2,895 | | | Silver $/oz | 27.0 | 24.3 | 29.7 | 26.16 | 32.18 | |

| Notes: | | | | | (1) | Unless otherwise noted in this news release, all currencies are reported in US dollars on a 100% basis | | | (2) | Assumes a 15-month construction period as the basis for the internal rate of return (“IRR”) and net present value (“NPV”) calculations | | | (3) | Assumed TC/RC terms and long-term, consensus metal price forecast have been provided by Micon. | | | (4) | Capital cost estimates used for the PEA comprise budgetary quotes from vendors, historical pricing from comparable projects, and parametric calculations based on similar equipment and infrastructure. Estimates exclude planned exploratory underground development and infill drilling costs and other engineering study expenditures incurred prior to a construction decision. | | | (5) | C1 Cost is net of direct operating costs and royalties on a zinc-equivalent basis, forecast using activity-based cost estimation. | | | (6) | There are no current mineral reserves, prefeasibility or feasibility study on the property that is affected by this PEA. | | | | |

The economic analysis contained in this news release are preliminary in nature and 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. There is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

President and CEO of Blue Moon, Christian Kargl-Simard stated:

" The positive results of the independent PEA support the significance of the Blue Moon deposit. The Project’s attractive economics compare well with other zinc development projects globally across valuation metrics, including cash cost, IRR and capital cost. The United States imports the majority of its required zinc, making the Project strategically significant for its trillion dollar bipartisan infrastructure bill. In addition, the current economics do not include any credits for germanium, gallium, aggregates, pyrite, barite and gypsum, all of which are recommended for future study analysis. Blue Moon plans to continue engineering and project development activities on its private land package to further advance the Project towards a future construction decision, with the next step being permitting an exploration ramp for infill and exploration drilling to support a feasibility study. Baseline environmental studies are underway to support the ramp development, with construction expected to start in 2026, subject to permitting.”

PEA Contributors The following companies have undertaken focused work programs since October 2024 that have been referenced in preparation of the PEA for Blue Moon:

Micon – Lead author and independent Qualified Persons (“QPs”) for underground mine design, mine plan, process plant design, infrastructure, environmental, permitting, cost estimate and financial modeling. Resource Development Associates – Geology & Mineral Resource estimate.

Mineral Resource Estimate

In conjunction with the PEA, the Company announced a Mineral Resource Estimate (“MRE”) for the Project with an effective date of December 24, 2024. Mineral resources in this news release were estimated in accordance with the Canadian Institute on Mining, Metallurgy and Petroleum (“CIM") Definition Standards for Mineral Resources and Reserves, prepared by the CIM Standing Committee on Reserve Definitions and adopted by the CIM Council on May 14, 2014.

The MRE is based on 87 drill holes totaling 122,364 feet of drilling with 2,631 individual assay intervals. High grade outliers were capped prior to compositing for grade estimation. Gold, silver, copper, lead and zinc mineralization was estimated using inverse distance weighting techniques based on the anisotropy of the deposit. Three-dimensional geology models were constructed to identify the mineralized domains of the deposit. Mineralization is constrained geologically to the mineralized domains to accurately reflect the in-situ mineralization. The mineral resource estimate was completed using Vulcan software in a 3D block model, with blocks ranging from 10x10x10 feet down to 0.1x10x10 feet which are sizes that capture the volume of the veins and are reflective of the selective mining unit envisioned for underground mining of the deposit.

Table 2: Blue Moon Project Indicated Mineral Resources Effective Date December 24, 2024

| Domain (Vein) | ZnEq Cutoff | Tons | ZnEq % | Cu % | Pb % | Zn % | Au opt | Ag opt | | | Main | 2.9 | % | 3,073,000 | 12.66 | 0.78 | 0.16 | 5.90 | 0.04 | 1.14 | | East | 2.9 | % | 498,000 | 18.99 | 0.47 | 0.63 | 6.64 | 0.09 | 3.72 | | West | 2.9 | % | 78,000 | 9.5 | 0.62 | 0.33 | 4.41 | 0.03 | 0.93 | | Total | | 3,650,000 | 13.46 | 0.73 | 0.23 | 5.97 | 0.04 | 1.49 | | | | | | Metal | Cu Mlbs | Pb Mlbs | Zn Mlbs | Au Moz | Ag Moz | | | | | | Main | 47.94 | 10.08 | 362.76 | 0.11 | 3.51 | | | | | | East | 4.67 | 6.29 | 66.15 | 0.04 | 1.85 | | | | | | West | 0.97 | 0.52 | 6.91 | 0.00 | 0.07 | | | | | | Total | 53.59 | 16.90 | 435.83 | 0.16 | 5.43 | |

Table 3: Blue Moon Project Inferred Mineral Resources Effective Date December 24, 2024

| Domain (Vein) | ZnEq Cutoff | Tons | ZnEq % | Cu % | Pb % | Zn % | Au opt | Ag opt | | | Main | 2.9 | % | 3,261,000 | 11.41 | 0.52 | 0.23 | 5.68 | 0.04 | 1.15 | | East | 2.9 | % | 994,000 | 15.49 | 0.59 | 0.56 | 5.04 | 0.07 | 2.43 | | West | 2.9 | % | 173,000 | 6.28 | 0.73 | 0.22 | 1.98 | 0.02 | 0.40 | | Total | | 4,428,000 | 12.12 | 0.54 | 0.30 | 5.39 | 0.04 | 1.41 | | | | | | Metal | Cu Mlbs | Pb Mlbs | Zn Mlbs | Au Moz | Ag Moz | | | | | | Main | 33.65 | 14.74 | 370.27 | 0.11 | 3.76 | | | | | | East | 11.80 | 11.20 | 100.11 | 0.07 | 2.42 | | | | | | West | 2.52 | 0.74 | 6.84 | 0.00 | 0.07 | | | | | | Total | 47.97 | 26.68 | 477.22 | 0.19 | 6.25 | |

| Notes: | | | | (1) | Scott Wilson, CPG, President of RDA is responsible for this mineral resource estimate and is an independent Qualified Person as such term is defined by NI 43-101 | | | (2) | Reasonable prospects of eventual economic extraction were assessed by enclosing the mineralized material in the block model estimate in 3D wireframe shapes that were constructed based upon geological interpretations as well as adherence to a minimum mining unit with geometry appropriate for underground mining. | | | (3) | The cutoff grade of 2.9% ZnEq considered parameters of: | | | | | a. Metal selling prices: Au-$2200/oz, Ag-$27/oz, Cu-$4.25/lb., Pb-$0.90/lb., Zn-$1.25/lb. | | | | b. Recoveries of Au 86.2%, Ag 94.3%, Cu 93.1%, Pb 0%, Zn 95.3% | | | | c. Costs including mining, processing, general and administrative (G&A). | | (4) | Zinc Equivalent Grade (“ZnEq”) is estimated by the formula: ZnEq = Zn% + ((Cu% 78.20)+(Pb% 0)+(Ag opt 25.46)+(Au opt 1896.40))/23.83 | | | (5) | There are no known legal, political, environmental, or other risks that could materially affect the potential development of the mineral resources. | | | (6) | Mineral resources are not mineral reserves and do not have demonstrated economic viability. | | | (7) | Figures may not add up due to rounding. | | | (8) | Tonnages shown in tables 2 and 3 are short tons. | | | | | |

Mining The method proposed in the PEA is underground mining at 1,800 tonnes per day (“tpd”) throughput at the mill that can be conventionally extracted using long-hole drilling, stoping and ramp haulage using diesel loaders and articulated trucks, with back-filling of mined voids using cemented tailings. The underground mine design proposes ramp access for workers and materials, with ventilation raises providing a second egress. A contractor-owned fleet of mobile mining equipment is assumed to operate throughout the mine life, while fixed infrastructure (power distribution, pumps, piping, ventilation fans, etc.) are included in initial capital costs. Pre-production mine development costs are also capitalized. However, the base case development schedule assumes the existence of an exploration decline to the first mining level, expected to be completed as part of a program of confirmatory drilling of the mineral resource, and hence the cost of that program (estimated at approximately $30 million) is treated as a sunk cost for the purposes of this PEA.

Waste rock from the underground mining will be utilized as far as practical, and subject to satisfactory testwork results, in the construction of roads and the tailings storage facility. Up to 50,000 tons per year will be hauled off site to be crushed and sold as aggregate in the local market. Excess waste rock will be stockpiled on site near the mine portal.

Metallurgy and Processing A program of metallurgical testwork was undertaken using two mineralized samples by Lakefield Research in Ontario in 1988 under the direction of Wright Engineers Limited on behalf of Westmin Resources Limited. The preliminary program of work completed by Lakefield Research comprised chemical and mineralogical analyses, hardness testing, batch and locked cycle flotation, flotation concentrate analyses, gravity separation and preliminary settling tests on samples of zinc concentrate and zinc rougher tailings.

Lakefield Research completed 26 separate bench-scale batch flotation tests and one locked cycle test to primarily investigate the sequential flotation of copper and zinc from the two samples. A total of eight batch tests were undertaken using Sample 1, which considered primary grind size, rougher concentrate regrind, flotation reagent combinations and dosage rates, and the recovery of pyrite from the zinc tailings. Sixteen batch tests used Sample 2 and these tests also investigated grind size, rougher concentrate regrinding, reagents, pyrite recovery as well as the potential to separate copper from the bulk copper concentrate. Although there are insufficient details concerning the selection and provenance of the testwork samples to confirm that they were representative of the entire Blue Moon mineral resources, it can be reasonably assumed that they were representative of the styles of mineralization occurring on the Blue Moon property. Conclusions from the 1988 testwork program are as follows:

Good recoveries of copper and zinc into high grade concentrates were achieved using conventional sequential flotation technology. Typically, most of the gold and silver in the samples tended to report to the copper concentrate. The copper concentrate produced contained minor amounts of deleterious elements which may incur penalties when sold to smelters. Conversely, this product also contained gold and silver in payable quantities. The zinc concentrate produced was of high grade with relatively low iron, and contained no significant amount of penalty elements. Flotation of pyrite from zinc tailings was successful and additional work to improve the product quality is recommended. The work indices calculated from standard Bond ball mill tests were relatively low and need to be confirmed using fresh samples that represent the main ore types at Blue Moon. The samples contained interesting amounts of barite and gypsum. More work is required to quantify the distribution of these minerals within the deposit, the quality of these minerals, and the potential to recover these minerals as valuable by-products. The samples appeared to contain a certain amount of free or nuggetty gold which should be investigated further. Deportment studies on gold and silver are recommended. Elements of particular interest that should be investigated in the next phase of metallurgical testwork include germanium and gallium. The economic potential of these elements as well as indium should be considered during the next geo-metallurgical testwork program. Based on the limited amount of testing undertaken so far, there are no processing factors or other deleterious elements that could have a significant effect on the potential economic extraction of the deposit.

Mineralized material brought from underground will be transported from the mine portal to the crushing plant by means of haul trucks tipping directly into an ore bin. A vibrating grizzly feeder will feed the material from the bin to the primary crusher, which will allow finer material to bypass the crusher. The primary crusher will reduce run-of-mine feed material to 80% passing 5 inches. Conveyors will transport the crushed product to a stockpile.

The PEA grinding circuit comprises a semi-autogenous grinding (SAG) mill operated in an open circuit configuration along with a ball mill operated in closed-circuit with a hydro-cyclone cluster. The overall grinding circuit will be designed to reduce the incoming ore from an 80% passing particle size of 5 inches (127 mm) to a final product size of 74 µm found in the hydro-cyclone overflow stream.

The copper flotation circuit will prioritize the recovery of copper mineral from the slurry stream and produce a concentrate that will later be dewatered. The tailings stream from the copper rougher bank and the first copper cleaner bank will feed the zinc flotation conditioning tanks and mixed with appropriate flotation reagents. The discharge from the final conditioner will feed the first zinc rougher flotation cell. The concentrate collected from roughers shall report to the zinc regrind circuit while (optionally) zinc rougher tailings will feed a pyrite flotation circuit.

Each concentrate stream reports to a dedicated thickener. The underflows will each report to a dedicated agitated filter feed tank and dedicated tower filter press producing a filter cake containing about 8% moisture by weight. Filtered concentrate will be loaded by conveyor into lined shipping containers which will transport the material to market.

The paste backfill that will be used in the underground mine operation will utilize a paste mixture prepared from cement, process water and tailings of the mineral processing plant. The filtered pyrite and tailings material will both report to a paste mixer which will combine the filter cake with a cement binder and adjustment water to reach a desired paste density. This paste will be pumped through the underground distribution network until it reaches the stopes to be filled. Tailings not utilized as backfill will be stored on surface in a lined dry-stack tailings storage facility.

Infrastructure The major infrastructure items considered and costed in the PEA support a mining and milling operation that is expected to operate 24-hours per day, seven-days per week. The design of project infrastructure has prioritized environmental protection, workforce safety, and operating efficiency while minimizing community impacts. Major infrastructure items include, but are not limited to the following:

Power Supply: It is assumed that Blue Moon will connect to the New Exchequer Powerhouse hydro-electric power supply located on Lake McClure, approximately 1.5 miles north of the Project. The total power demand of the mine, concentrator and recovery plant is estimated to be approximately 9 MW and requires as substation capacity of approximately 15 MVA. The estimated power cost is US$0.175/kWh. Process water will be reclaimed from the water management pond and pumped back to the plant. Multiple process water systems within the plant will minimise inter-circuit reagent contamination. Make-up water will likely be obtained from boreholes, but additional hydrogeological studies will be required to confirm borehole supply capacity. Road Access: Access to the Project site will utilize existing public and private roads, the latter being upgraded as necessary to provide all-weather access to the site. Mine haul access road for waste rock and mill-feed that can accommodate 40-tonne trucks. Mine facilities including but not limited to buildings for maintenance, warehousing, administration, laboratories and security. Water supply and management systems. Lined tailings storage facility and waste rock storage pads.

Initial Capital Costs The initial capital expenditures for the Project were estimated by Micon using a combination of budgetary quotes from vendors, historical pricing from comparable projects, and parametric calculations based on similar equipment and infrastructure, as summarized in Table 4. Capital expenditures to be incurred after the start-up of operations are assigned to sustaining capital and are projected to be covered by operating cash-flows. Project contingencies have been added where applicable, excluding capitalized operating costs, which results in an overall contingency of $28.5M or 24.6% of initial capital before contingency.

Table 4: Initial Capital Cost Estimates

| Item | Pre-Production Capital ($M) | | Capitalized Pre-Production Development | 18.4 | | Process Plant | 39.1 | | Backfill Plant | 8.9 | | Tailings disposal | 7.0 | | On-site Infrastructure | 8.8 | | Off-site Infrastructure | 1.9 | | Common Services | 16.0 | | Indirect - site costs | 2.9 | | Indirect - spares & first fills | 3.1 | | EPCM | 7.7 | | Owners Cost | 2.2 | | Contingency | 28.5 | | Total initial capital expenditure | 144.5 |

| Notes: | | | (1) | Totals do not necessarily equal the sum of the components due to rounding adjustments. | | (2) | Direct process plant capital costs are based on benchmarking and budgetary estimates, not from engineering design. | | (3) | Estimates exclude planned exploratory underground development and infill drilling costs and other engineering study expenditures incurred prior to a construction decision. | | | |

Sustaining Capital Costs Micon estimates the LOM sustaining capital for Blue Moon to be $64.5M, which is expected to be funded by operating cash flows. The sustaining capital estimate is primarily for the expansion of the tailings storage facility, and maintaining the surface plant and infrastructure. Micon has assumed closure bonding is covered by a corporate surety, and a cost for reclamation and closure at the end of LOM of $15.0M, net of the realisable residual (scrap) value of equipment.