Tudor Gold Corp. press release
Thesis Gold Updated PEA for Lawyers-Ranch Project: After-Tax NPV5% of C$1.28 Billion, IRR of 35.2% and 2.0 Year Payback
TSXV - TSX Venture Exchange · Gold · Copper · Silver · Lead · Zinc · Arsenic · Barium · Molybdenum · Canada
Vancouver, British Columbia--(Newsfile Corp. - September 5, 2024) - Thesis Gold Inc. (TSXV: TAU) (FSE: A3EP87) (OTCQX: THSGF) is pleased to announce positive results from the updated independent Preliminary Economic Assessment ("PEA") for its 100% owned Lawyers-Ranch Project (the "Project") in the prolific Toodoggone Mining District of northern British Columbia. The updated PEA outlines a plan for developing the combined Lawyers-Ranch project using both open-pit and underground mining methods, with mineralized material processed at a single facility, achieving an estimated average gold recovery of 93%. The PEA was prepared by JDS Energy & Mining Inc. ("JDS") of Vancouver, British Columbia, Canada in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"). The updated NI 43-101 PEA Technical Report will be filed on SEDAR+ at www.sedarplus.caand Thesis Gold's website www.thesisgold.comwithin 45 days of this announcement.
Highlights
Strong Economics:Pre-tax internal rate of return ("IRR") of 46.0%, pre-tax net present value at a 5% discount rate ("NPV5%") of C$1.99 billion, after-tax IRR stands at 35.2%,and an after-tax NPV5% of C$1.28 billion, using US$1,930 per ounce of gold and US$24 per ounce of silver (see Table 1). Gold Price Sensitivity:The project remains robust at a wide range of gold prices from US$1,750 to US$2,500 with after-tax IRR of 28.8% to 52.8% (see Table 2). Increased Production: The 2024 PEA saw a considerable increase in production versus the previous (2022) PEA with a 32% increase in annual average production to 215,000gold-equivalent ("AuEq"*) ounces, including an average 273,000gold-equivalent ounces annually over the first three years, and a 55% increase in Life-of-mine ("LOM") production to 3.0 milliongold-equivalent ounces, extending mine life to over 14 years. Low AISC:LOM all-in sustaining cash cost ("AISC") of US$1,013 per ounce of gold equivalent. Quick Payback:The project offers a quick after-tax payback of 2.0 years, a 29% decrease compared to the previous (2022) PEA. Capex:Initial capital expenditure is estimated at C$598.4 million, with a compelling after-tax NPV5% to initial capital ratio of 2.1:1. Project Upside:Significant Mineral Resource growth potential remains across both Lawyers and Ranch projects. The underground Mineral Resource at Lawyers is still open for expansion at depth, while Ranch Mineral Resource zones also remain open. Additionally, there are over 20 unexplored targets that hold potential for further discoveries.
Dr. Ewan Webster, President and CEO, commented, "Starting in 2023, we set an ambitious goal to focus our exploration and engineering efforts on optimizing our project establishing a low-cost future producer with a quick payback period and a projected mine life exceeding 10 years, while in parallel establishing substantial opportunities for future expansion. We are delivering on that promise, with 215,000 ounces per year over a 14-year mine life, a 117% improvement in NPV, and a 46% improvement in IRR. This translates to a robust after-tax NPV5% of C$1.28 billion and an after-tax IRR of 35.2%, based on a conservative 3-year trailing average gold price of US$1,930 per ounce. With today's gold price near US$2,500 per ounce, the substantial economic potential of the Lawyers-Ranch Project is clear. As we advance toward key project development milestones, we will continue to explore new targets within our expansive, highly prospective land package. This approach will further enhance a project that is not only straightforward and low-risk but also benefits from high-grade, easily accessible open-pit and underground ounces, combined with proximity to existing infrastructure. This positions the Lawyers-Ranch Project as one of Canada's most prospective gold projects."
Bill Lytle, Non-Executive Chairman, added, "The 2024 PEA confirms the positive potential of the Lawyers-Ranch Project, utilizing industry-standard open-pit and underground mining methods alongside an optimized processing flowsheet that ensures exceptional recoveries from both Lawyers and Ranch streams, all while maintaining a compact project footprint. The inclusion of the Lawyers underground brings high-grade, easily accessible ounces into the early stages of the mine life, significantly enhancing the project's economics compared to the 2022 PEA. With 301,316 meters drilled to date, 86.9% of the updated 2024 Mineral Resource is now classified as Measured and Indicated. Combined with well-advanced engineering and environmental baseline work, the project is rapidly moving towards Pre-Feasibility and an accelerated permitting timeline, while still offering substantial upside potential and opportunities for Mineral Resource growth."
PEA Overview
The PEA is preliminary in nature and includes Inferred Mineral Resources considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the results of the PEA will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
The 2024 PEA considers a conventional truck and shovel open-pit mining ("OP") operation with common equipment sizing feeding a 12,600 tonnes per day (t/d) industry standard processing plant with crushing, grinding, flotation, leaching and a Merrill Crowe recovery circuit, with production of precious metal concentrate and gold-silver doré bullion on site. The 2024 PEA considers a crossover to underground mining ("U/G") using longhole stoping and a small zone of drift and fill to feed up to 2,500 t/d from the Duke's Ridge, Cliff Creek and Ranch Deposits from years 2 to 14. The PEA is based on an update of the Mineral Resource Estimate announced by the Company on the June 1, 2024 press release.
JDS was appointed as lead consultant in January 2024 to prepare the updated PEA in accordance with NI 43-101 and was assisted by Knight Piesold Consulting ("KP") for tailings storage facility ("TSF") and waste rock storage facility ("WRSF") design and costing, Frank Wright Consulting ("Frank Wright") for metallurgy, P&E Mining Consultants Inc. for Mineral Resource estimation, and One-Eighty Consulting for permitting.
PEA Highlights
Positive after-tax NPV (5%) of C$1.28 billion, 35.2% IRR and 2.0 Year Payback Period. Open pit and underground mining at the Lawyers and Ranch properties, with the inclusion of underground mining leading to an increase grade and tonnage compared to previous PEA. Inclusion of underground mining leading to an overall reduction in LOM strip ratio for the Project. Optimized flowsheet utilizing both flotation and leaching to maximize overall recovery. The addition of a flotation circuit allows for an increased gold recovery to 93% and silver recovery to 86.1% across a combined Lawyers and Ranch process plant feed. Increase Life of Mine of 14 years with 215, 000 oz AuEq* average annual production. Life of Mine (LOM) production of 64.7 Mt of Process Plant Feed at an average grade of 1.61 g/t AuEq*. Optimized infrastructure to increase operational efficiency.
These results reinforce the economic potential of the project, highlighting efficient and effective processing strategies to maximize metal recovery.
PEA Parameters and Assumptions
The financial modeling for this PEA was done by JDS Energy & Mining Inc. and included the following parameters and assumptions:
Table 1: Summary of PEA Parameters and Economics Results
| General | Unit | LOM Total / Avg. | | Au Price | US$/oz | 1,930 | | Ag Price | US$/oz | 24 | | Mine Life | yrs | 14 | | Total Processed Feed Tonnes | kt | 64,700 | | Waste Mined | kt | 294,000 | | OP Stripping Ratio | W:O | 5 | | Production | Unit | LOM Total / Avg. | | Head Grade - Au | g/t | 1.23 | | Head Grade U/G - Au | g/t | 2.40 | | Head Grade OP - Au | g/t | 1.10 | | Head Grade - Ag | g/t | 33.1 | | Head Grade U/G - Ag | g/t | 68.4 | | Head Grade OP - Ag | g/t | 27.5 | | Head Grade - AuEq* | g/t | 1.61 | | Head Grade U/G - AuEq* | g/t | 3.17 | | Head Grade OP - AuEq* | g/t | 1.44 | | Recovery Rate - Au | % | 93 | | Recovery Rate - Ag | % | 86.1 | | Total Payable Au | koz | 2,323 | | Total Payable Ag | koz | 56,405 | | Total Payable AuEq* | koz | 3,025 | | Average Annual Production - Au | koz/yr | 165 | | Average Annual Production - Ag | koz/yr | 4,011 | | Average Annual Production - AuEq* | koz | 215 | | Operating Costs | Unit | LOM Total / Avg. | | OP Mining | CA$/t Mined | 4.08 | | UG Mining | CA$/t Mined | 72.47 | | Processing | CA$/t Processed | 15.85 | | G&A | CA$/t Processed | 5.23 | | Total | CA$/t Processed | 50.57 | | AISC | US$/AuEq* oz | 1,013 | | Capital Cost | Unit | LOM Total / Avg. | | Initial Capital | M CA$ | 598.4 | | Sustaining Capital | M CA$ | 547.2 | | including U/G Sustaining Capital of: | M CA$ | 251.3 | | Closure Capital | M CA$ | 47.8 | | Total Capital | M CA$ | 1,193.3 | | Pre-Tax Financials | Unit | LOM Total / Avg. | | NPV (5%) | M CA$ | 1,991 | | IRR | % | 46.0 | | Payback Period | Yrs | 1.6 | | After-Tax Financials | Unit | LOM Total / Avg. | | NPV (5%) | M CA$ | 1,277 | | IRR | % | 35.2 | | Payback Period | Yrs | 2.0 | | After-Tax NPV:Initial Capital | | 2.1:1 |
Sensitivity Analysis
A sensitivity analysis was done on the financial model to verify the robustness of the outcomes and the impacts on the Project's After-Tax NPV and IRR are tabulated below:
Table 2: Metal Price Sensitivity Analysis
| | | Base Case | | | | Gold Price ($US) | 1,750 | 1,930 | 2,500 | 3,000 | | Silver Price ($US) | 22.00 | 24.00 | 30.00 | 35.00 | | | | | | | | Pre-Tax | | | | | | NPV5% (CA $M) | 1,503 | 1,991 | 3,520 | 4,847 | | IRR | 37.5% | 46.0% | 69.6% | 87.5% | | | | | | | | After Tax | | | | | | NPV5% (CA $M) | 968 | 1,277 | 2,247 | 3,089 | | IRR | 28.8% | 35.2% | 52.8% | 66.3% | | NPV5%: Initial Capex | 1.6 | 2.1 | 3.8 | 5.2 | | Payback Years | 2.4 | 2.0 | 1.3 | 0.9 |
Project Enhancements in the updated PEA
Since the publication of the previous (2022) PEA, a comprehensive review was undertaken to identify and incorporate optimizations that would improve overall project economics and focus exploration activities on adding the most value to the project. The primary enhancement identified was the integration of underground mining methods at Lawyers. In the updated PEA, underground mining will extract 6.5 Mt at an average grade of 3.17 g/t AuEq*, representing approximately 10% of the process plant feed and 20% of the contained ounces. Compared to the previous (2022) PEA, this change brought forward higher grade ounces in the mine schedule, increased LOM production, extended mine life, and reduced the strip ratio of open-pit mining. Additionally, metallurgical test work focused on optimizing recovery, particularly silver, leading to the inclusion of a flotation circuit in the process flowsheet. Collectively, these changes, along with the updated Mineral Resource Estimate from June 1, 2024, result in improved annual production, particularly during the early mine years, and a notable increase in LOM production and extension of mine life (see Table 3).
The results of the updated PEA were compared to the existing (2022) PEA and are detailed in the table below:
Table 3: Comparison of 2024 PEA to 2022 PEA Economic Results
| General | Unit | 2024 PEA | 2022 PEA | Change | | After-Tax NPV (5%) | CA$ M | 1,277 | 589 | +117% | | After-Tax IRR | % | 35.2 | 24.1 | +46% | | Payback Period | yrs | 2.0 | 2.8 | -29% | | Payable AuEq* | koz AuEq* | 3,025 | 1954 | +55% | | Life of Mine | yrs | 14 | 12 | +18% | | After-Tax NPV:Initial Capital | | 2.1:1 | 1.2:1 | +73% | | AISC | US$/AuEq* oz | 1,013 | 941 | +8% | | OP Stripping Ratio | W:O | 5.0 | 5.9 | -24% |
Mineral Resource Estimate
The PEA is based on the Mineral Resource Estimate prepared by P&E Mining Consultants Inc., and APEX Geoscience Ltd., and reported by Thesis Gold on June 1, 2024, which is summarized in the table below:
Table 4: Summary of June 1, 2024 Mineral Resource Estimate
| Total Pit-Constrained and Out of Pit-Stope-Constrained Mineral Resource Estimate @ 0.4 g/t and 1.5 g/t AuEq* Cut-Off | | | | | | | | | | | | | Mineral Resource Area | Cut-off AuEq* (g/t) | Classification | Tonnes (k) | Au (g/t) | Ag (g/t) | Cu (%) | AuEq* (g/t) | Au (koz) | Ag (Moz) | Cu (kt) | AuEq* (koz) | | All | Combined | Measured | 35,987 | 1.10 | 38.5 | | 1.58 | 1,268 | 44.5 | 0 | 1,825 | | Indicated | 46,023 | 1.11 | 26.7 | 0.01 | 1.46 | 1,648 | 39.5 | 3 | 2,153 | | | | M&I | 82,010 | 1.11 | 31.9 | | 1.51 | 2,917 | 84.0 | 3 | 3,978 | | | | Inferred | 12,401 | 1.48 | 20.9 | 0.06 | 1.82 | 590 | 8.3 | 8 | 727 | | |
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The estimates of Pit-constrained and out-of-pit Measured, Indicated and Inferred Mineral Resources assumed metal prices of US$1,850/oz Au, US$24/oz, 0.76 US$:CDN$ FX, with process recoveries of 91% Au and 88% Ag. A C$15/t process cost and C$5/t G&A cost were used. The Au:Ag ratio was 80:1. The constraining pit optimization parameters were C$3.5/t mineralized and waste material mining cost and 52° pit slopes with a 0.40 g/t AuEq* cut-off. The underground parameters were C$80/t mined with assumed 1.5x15x15 m stopes and a 1.50 g/t AuEq cut-off.
Capital and Operating Costs
The 2024 PEA estimates the initial capital requirements at $598.4 million, versus C$484.1 million in the previous (2022) PEA, representing a 24% increase, the majority from cost inflation and a 18% increase in the process plant throughput rate, from 10,700 t/d to 12,600 t/d, with cumulative sustaining and closure capital amounting to $594.2 million. LOM operating costs for the Lawyers-Ranch Project are estimated to average C$50.57 or US$37.42 per tonne processed.
The PEA is based on owner-operated open pit and underground mining, which has an estimated LOM cost of C$14.75 per tonne processed. Open pit mining is projected to cost $22.21 per tonne processed, totaling $1.4 billion, while underground mining is estimated at $7.28 per tonne. Processing costs are estimated at C$15.85 per tonne milled. G&A costs are estimated at C$5.23 per tonne processed, which includes TSF handlings of C$0.22 per tonne processed. The capital and operating cost estimate was developed in Q3 2024 Canadian Dollars (C$).
The capital cost summary is presented in Table 5 and the operating cost summary is presented in Table 6.
Table 5: Summary of Capital Costs
| Capital Costs | Pre-Production (M$) | Sustaining / Closure (M$) | Total (M$) | | Open Pit Mining | 61.8 | 113.0 | 174.8 | | Underground Mining | | 251.3 | 251.3 | | On-site Development | 18.5 | 10.4 | 28.9 | | Mineral Processing | 204.6 | | 204.6 | | Tailings and Waste Management | 53.5 | 55.7 | 109.2 | | On-site Infrastructure | 45.8 | 21.6 | 67.5 | | Off-site Infrastructure | 0.3 | 62.2 | 62.5 | | Project Indirects | 67.1 | 5.0 | 72.1 | | Engineering & Project Management | 41.9 | 6.4 | 48.3 | | Owner's Costs | 16.9 | | 16.9 | | Closure | 0 | 47.8 | 47.8 | | Subtotal | 510.5 | 573.5 | 1,084.0 | | Contingency | 87.9 | 21.5 | 109.4 | | Total Capital Costs | 598.4 | 594.9 | 1,193.3.6 | | *Numbers may not sum due to rounding | | | |
Table 6: Summary of Operating Costs
| Operating Costs | $/t Processed | Average Annual M$ | LOM M$ | | Open Pit Mining | 22.21 | 102.6 | 1,436.5 | | Underground Mining | 7.28 | 33.6 | 471 | | Processing | 15.85 | 73.2 | 1,024.7 | | G&A | 5.23 | 24.2 | 338.3 | | Total | 50.57 | 232.8 | 3,270.5 |
Mining
The PEA assumes conventional open pit truck and shovel mining as well as underground mining using longhole stoping and drift and fill production designed to achieve a processing rate of 12,600 t/d. Open pit mining was used for the majority of the Mineral Resources due to its relative low cost and high productivity, as well as the proximity to surface of the mineralized material. Underground mining methods were utilized to target deeper higher-grade areas.
The open pits were selected from a series of optimized pit shells for each deposit. Each of the selected shells was then divided into pushbacks to help optimize the production schedule. The mining sequence aims to maximize economic returns and achieve the target process plant feed rate of 4.6 Mt/a (12,600 t/d) by targeting the pushbacks in descending order of net unit value. Open pit mining activities will move an average of 64 kt/d with a peak of 84 kt/d over the 14-year mine life.
Each of the underground mines was mined in a bottom up sequence, utilizing permanent sill pillars to allow for multiple production horizons. Underground mining will extract 6.5 Mt at an average grade of 3.17 g/t AuEq*
Over the life of mine (LOM) the Project is expected to produce 64.7 Mt of process plant feed at an average grade of 1.61 g/t AuEq* with a total contained metal of 2,559 koz of gold and 68,798 koz of silver based on a pit cut-off grade of 0.43 g/t AuEq* for AGB, 0.39 g/t AuEq* for Cliff Creek, 0.52 g/t AuEq* for Ranch and an underground cut-off grade of 1.50 g/t AuEq*.
Stripping ratios average 3.1:1 at AGB, 5.0:1 at Cliff Creek and 8.7:1 at Ranch. The peak combined mine production is approximately 84 kt/d.
[](https://images.newsfilecorp.com/files/6169/222217_thesisgold001.jpg)
Figure 1: Mine Production Schedule
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AuEq* = Au + Ag/87
Open Pit Mining
The PEA mine design consists of four pits at the Lawyers Property and several small pits at the Ranch Property, with a mining sequence intended to maximize grade in the early years, smooth stripping requirements and maintain the processing facility at full production capacity. Approximately 58 Mt of open pit potentially mineable Mineral Resources have been defined with a grade of 1.44 g/t AuEq* containing 2,057 koz of gold and 54,730 koz of silver and an Open Pit strip ratio of 5:1. Mining activities will average 64 kt/d with a peak of 84 kt/d over a 14-year life of mine.
The open pit mining activities for the Project will be undertaken by an owner-operated truck/shovel fleet with conventional drill, blast, load and haul operations. Bulk excavation will be performed using hydraulic excavators with back-up units of either hydraulic excavators or a front-end loader. Given the overall scale of operations and equipment requirements, a diesel-powered fleet has been selected.
[](https://images.newsfilecorp.com/files/6169/222217_thesisgold002.jpg)
Figure 2: Lawyers & Ranch Open Pits and WRSFs
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Underground Mining
Underground mining will take place at Dukes Ridge, Cliff Creek, and Ranch Deposits. The underground will utilize a longhole stoping and a small zone of drift and fill to meet an average production rate of 2,500 t/d. Stopes will be extracted in a retreat sequence and backfilled with cemented rock fill (CRF) and/or unconsolidated waste rock. All the underground development waste hauled to surface will be used as backfill.
The mine will be developed using conventional underground equipment consisting of development jumbos, longhole drills, bolters, LHDs, and haul trucks. Mineralized material will be hauled to the surface to stockpile facility near the portal where open pit equipment will transport stockpiled material to the crusher.
[](https://images.newsfilecorp.com/files/6169/222217_62ae9862940ceb83_004full.jpg)
Figure 3: Longitudinal Projection Looking West Lawyers Underground
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[](https://images.newsfilecorp.com/files/6169/222217_62ae9862940ceb83_005full.jpg)
Figure 4: Longitudinal Projection Looking East Ranch Underground
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