Corvus Gold Inc announces results for its Preliminary Economic Assessment (“PEA”) of the Company’s Mother Lode Project (MLP) in southwest Nevada (Figure 1). Results outline a potential large Nevada, standalone, mining project with attractive preliminary production and financial performance statistics. This project is expected to be the Company’s second and separate mine development target in a central location surrounded by other recent discoveries in the Bullfrog Mining District.
The initial PEA does not take into account any potential synergies and cost savings from having the North Bullfrog project approximately 10km’s away on the basis that the MLP is viewed as a 100% standalone property and development project, with its own timeline and infrastructure. The results indicate robust economics at a gold price of $1,500/oz with pre-tax free cash flow of USD $564M and post-tax NPV5% of USD $303M with an IRR of 23% and strong leverage for higher gold prices with a USD $1.11B pre-tax cash flow at $1,900 gold price and post-tax NPV5% of USD $663M with an IRR of 42% (Table 1). The Mother Lode Project may provide Corvus with a future production growth option to increase its gold production profile in the Bullfrog Mining District beyond its initial mining project at North Bullfrog. MLP could position Corvus for expanding organic production growth and possible further District consolidation of other assets.
The Mother Lode PEA is 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, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Jeffrey Pontius, President and CEO of Corvus states, “The results from our initial PEA study of the Mother Lode standalone project are encouraging. The potential projected annual gold production of over 200,000 ounces per year during the first 3 years is significant, especially as a new project, which could provide an increase to the Corvus Gold future production profile. The PEA demonstrates the preliminary potential for the project, on its own, to produce significant free cash flow and after tax NPV5%. Corvus now has a number of strategic alternatives available to it to drive shareholder value. Given the recent interest in the Bullfrog Gold District from multiple producing Companies with adjacent land packages, Corvus’ compelling and accretive projects and its commanding land position with what we believe is demonstrated high exploration potential, has positioned the Company to deliver increased shareholder value.”
The Mother Lode Project is modeled as a large, open-pit, with a biological oxidation mill to treat the higher-grade sulphide mineralization and a heap leach pad for treatment of oxide mineralization. The mining plan utilizes standard mining practices and has a production scale that is currently being used by many operating mines. The updated Mother Lode mineral resource estimate is shown in Table 5.
The new PEA study, which assumes a standalone project, also includes a number of other changes to the previously assumed concept for the combined Mother Lode-North Bullfrog project configuration which enhance the project that include:
The PEA only includes drill results completed up until September 2020. In addition, Corvus will continue follow-up mineral resource expansion work and new discovery drilling on priority targets at both the North Bullfrog and Mother Lode properties through 2021.
The Mother Lode PEA is 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, 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 National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) technical report for the Mother Lode PEA and updates of the Mother Lode mineral resource estimate is expected to be filed on the Company’s Sedar profile by the end of the business day on November 20, 2020. For readers to fully understand the information in this news release, they should read the technical report in its entirety, including all qualifications, assumptions and exclusions that relate to the PEA. The technical report is intended to be read as a whole, and sections should not be read or relied upon out of context.
Qualified Person and Quality Control/Quality Assurance
Jeffrey A. Pontius (CPG 11044), a qualified person as defined by NI 43-101, has supervised the preparation of the scientific and technical information that forms the basis for this news release and has reviewed and approved the disclosure herein. Mr. Pontius is not independent of Corvus, as he is the CEO & President and holds common shares and incentive stock options.
Carl E. Brechtel, (Nevada PE 008744 and Registered Member 353000 of SME), a qualified person as defined by NI 43-101, has coordinated execution of the work outlined in this news release and has also reviewed and approved the disclosure herein. Mr. Brechtel is not independent of Corvus, as he is the COO and holds common shares and incentive stock options.
The work program at Mother Lode was designed and supervised by Mark Reischman, Corvus Gold’s Nevada Exploration Manager, who is responsible for all aspects of the work, including the quality control/quality assurance program. On-site personnel at the project log and track all samples prior to sealing and shipping. Quality control is monitored by the insertion of blind certified standard reference materials and blanks into each sample shipment. All mineral resource sample shipments are sealed and shipped to American Assay Laboratories (“AAL”) in Reno, Nevada, for preparation and assaying. AAL is independent of the Company. AAL’s quality system complies with the requirements for the International Standards ISO 9001:2000 and ISO 17025:1999. Analytical accuracy and precision are monitored by the analysis of reagent blanks, reference material and replicate samples. Finally, representative blind duplicate samples are forwarded to AAL and an ISO compliant third-party laboratory for additional quality control. Mr. Pontius, a qualified person, has verified the data underlying the information disclosed herein, including sampling, analytical and test data underlying the information by reviewing the reports of AAL, methodologies, results and all procedures undertaken for quality assurance and quality control in a manner consistent with industry practice, and all matters were consistent and accurate according to his professional judgement. There were no limitations on the verification process.
Mr. Scott E. Wilson, CPG (10965), Registered Member of SME (4025107) and President of Resource Development Associates Inc., is an independent consulting geologist specializing in Mineral Reserve and Resource calculation reporting, mining project analysis and due diligence evaluations. He is acting as the Qualified Person, as defined in NI 43-101, and is the primary author of the Technical Report for the Mineral Resource estimate and has reviewed and approved the Mineral Resource estimate and the Preliminary Economic Assessment summarized in this news release. Mr. Wilson has over 31 years of experience in surface mining, resource estimation and strategic mine planning. Mr. Wilson is independent of the Company under NI 43-101.
Mr. Wilson, a qualified person, has verified the data underlying the information disclosed herein, including sampling, analytical and test data underlying the information by reviewing the reports of AAL, methodologies, results and all procedures undertaken for quality assurance and quality control in a manner consistent with industry practice, and all matters were consistent and accurate according to his professional judgement. There were no limitations on the verification process.
Metallurgical testing on North Bullfrog and Mother Lode samples has been performed by McClelland Analytical Services Laboratories Inc. of Sparks Nevada (“McClelland”), Resource Development Inc. of Wheatridge, CO (RDi) and Hazen Research Inc. of Golden, CO (HRi). McClelland is an ISO 17025 accredited facility that supplies quantitative chemical analysis in support of metallurgical, exploration and environmental testing using classic methods and modern analytical instrumentation. McClelland has met the requirements of the IAS Accreditations Criteria for Testing Laboratories (AC89), has demonstrated compliance with ANS/ISO/IEC Standard 17025:2005, General requirements for the competence of testing and calibration laboratories, and has been accredited, since November 12, 2012. Hazen Research Inc. (“Hazen”), an independent laboratory, has performed flotation, AAO testing and cyanide leach testing on samples of sulphide mineralization from the YellowJacket zone and Swale area of Sierra Blanca, and roasting tests on Mother Lode flotation concentrate. Hazen holds analytical certificates from state regulatory agencies and the US Environmental Protection Agency (the “EPA”). Hazen participates in performance evaluation studies to demonstrate competence and maintains a large stock of standard reference materials from the National Institute of Standards and Technology (NIST), the Canadian Centre for Mineral and Energy Technology (CANMET), the EPA and other sources. Hazen’s QA program has been developed for conformance to the applicable requirements and standards referenced in 10 CFR 830.120 subpart A quality assurance requirements, January 1, 2002. Resource Development Inc. is a state-of-the-art laboratory for metallic and industrial minerals filling a need for high quality, cost-effective, and timely technical services for the international mining industry.
About the Mother Lode Projects, Nevada
Corvus controls controls 483 federal unpatented mining claims on the Mother Lode project which totals approximately 38.6 km2 which it controls 100%. The project has excellent infrastructure, being adjacent to a major highway and power corridor as well as a large water right.
About Corvus Gold Inc.
Corvus Gold Inc. is a North American gold exploration and development company, focused on its near-term gold-silver mining project at the North Bullfrog and Mother Lode Districts in Nevada. Corvus is committed to building shareholder value through new discoveries, expansion of its projects and the production of gold to maximize share price leverage in an advancing gold and silver market.
On behalf of
Corvus Gold Inc.
(signed) Jeffrey A. Pontius
Jeffrey A. Pontius,
President & Chief Executive Officer
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