Orea Mining Corp. is pleased to announce an optimised project design with a remarkable reduction in the environmental impact of the Montagne d’Or Gold Project, located in French Guiana, France. In response to the public debate held in 2018, the Montagne d’Or joint venture (owned 44.99% by Orea and 55.01% by operator Nord Gold plc) (the “JV“) has selected a new project design based on Best Available Techniques (“BAT”) resulting in a 32% reduction in surface footprint and an 80% reduction in estimated total equivalent C02 emissions (“TECO2”).
Rock Lefrançois, President and CEO of Orea, commented “The JV’s success in optimizing the design of the Montagne d’Or mine, significantly reducing its environmental impact, is the culmination of over two years of additional technical and environmental studies in response to public consultations”. He added, “This is undoubtedly a pivotal step for the acceptability and development of an exceptional gold deposit.”
The JV completed a comprehensive analysis of the initial Bankable Feasibility Study (“BFS”) project design, taking numerous alternatives into consideration before selecting the option that best addressed the concerns brought forth by the public debate. The alternative designs were scored on environmental, technical and economic criteria with weighting factors of 60, 20 and 20, respectively. The option with the highest score was chosen for the new project design.
The new project design takes into account all environmental and safety requirements and is a testament to the JV’s commitment to moving forward with a project that adheres to the highest standards of responsible mining. The significant reduction in environmental impact was mainly driven by an alternate power generation solution.
Project Modification Highlights:
The initial project provided for the connection to the public power grid and the JV assumed all costs of construction of a 106-kilometer 90 kV overhead power line between the town of Saint-Laurent-du-Maroni and the mine site.
In consideration of the difficulty of the public power grid in meeting local electricity needs and the concern expressed during the public debate on the suitability of connecting the mine site to the grid, the JV gave priority to on-site renewable energy production and abandoned the construction of the power line, which makes it also possible to significantly reduce the environmental impacts linked, in particular, to land clearing.
The multicriteria analysis compared the initial option of connecting the mine site to the public power grid and on-site power generation from a hybrid solar/diesel power plant with lithium-ion battery storage capacity. It was also compared to on-site diesel power plant, biomass plant and solar panels with battery storage. The selected hybrid solution developed is attributable to major technical developments in renewable energy production and energy storage which allows for 80% solar-based energy production and 20% energy production from diesel-powered generators to ensure the security of constant power supply. As a result, the estimated total equivalent C02 emissions (TECO2) will be reduced by 469,000 tonnes per year, a reduction of 93% compared to sourcing from the power grid.
The selected site for the solar panel park is located along the access road on already deforested land, reducing the surface footprint. The hybrid power plant will require 70% less land clearing than that of a connection by power line and reduces estimated total equivalent C02 emissions (TECO2) by an additional 41,600 tonnes per year, a reduction of 47% compared to the construction of a power line.
Tailing Storage Facility (TSF)
The JV undertook new technical studies in order to review and complete the initial design of the TSF in consideration of the concerns raised during the public debate related to the risks of dam rupture associated climatic hazards. The tailings dams will be built sequentially in parallel with mining and planned to be raised in 4 phases.
The JV selected the safest construction method by detailing the initial TSF design with BAT. The TSF will be built by the downstream raising method, namely that its rise in height will be made by means of shoulders made from the downstream of the facility. Unlike the other two methods commonly encountered in the construction of tailings impoundments (upstream method and central axis method), the downstream method does not involve consolidated tailings in the overall stability of the structure. The safety of the structure is thus clearly dissociated from the mechanical characteristics of the processing residues to be stored and their evolution over time, which constitutes a strong point for the durability of the structure. The downstream method and the improved design provide a more stable configuration especially with regard to seismic risk and climatic hazards by reducing the overall height and increasing the strength of the dams.
About Montagne d’Or
Montagne d’Or is a permitting-stage open pit gold deposit that hosts Measured Mineral Resources of 10.3 Mt at 1.804 g/t (600,000 oz), Indicated Mineral Resources of 74.8 Mt at 1.350 g/t (3.25 Moz) and additional Inferred Mineral Resources of 20.2 Mt at 1.48 g/t gold (960,000 oz), prepared in accordance with the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101“). The Mineral Resources are confined within a pit shell defined by a gold price of US$1,300/oz and a cut-off grade of 0.4 grams per tonne gold. Mineral Reserves have also been defined with Proven Mineral Reserves of 8.25 Mt at 1.99 g/t (530,000 oz) and Probable Mineral Reserves of 45.87 Mt at 1.50 g/t (2.2 Moz). The Proven and Probable Mineral Reserves were estimated using a gold price of US$1,200 per ounce at varied cut-off grades from 0.552 to 0.665 grams per tonne gold, dependent on lithological rock types, economics and estimated metallurgical recovery. Montagne d’Or ore can be readily processed to recover the contained gold and silver values using unit operations considered standard to the industry. It is a large and unique Paleoproterozoic gold-rich volcanogenic sulfide deposit, presently drill-defined over a strike extent of 2,300 meters and to a vertical depth of 200 to 250 meters.
Nord Gold plc (“Nordgold”) first earned a 50.01% interest in the project in September 2017 by spending US$30 million and completing a Bankable Feasibility Study (“BFS“). Nordgold then acquired an additional 5% interest pursuant to a share purchase agreement.
The 2017 BFS contemplates an open pit operation over a 12-year mine life. Highlights of the BFS at a gold price of US$1,250 per ounce are as follows:
The BFS economic model gold price sensitivity shows that the after-tax project NPV at a 5% discount rate changes approximately US$1.24 million for every US$1 change in gold price. At a gold price of US$1,500 per ounce, the NPV and IRR increase respectively to US$681 million and 26.7%.
Upside Potential of Montagne d’Or
There are several opportunities to increase the current Mineral Reserves and mine life within the designed resource pit. Approximately 2 million ounces of Mineral Resources are not converted to Mineral Reserves, which include Inferred Mineral Resources of 960,000 ounces of gold at average grade of 1.48 grams per tonne gold. Infill drilling has the potential to convert some of these Inferred Mineral Resources to higher resource classification categories.
There is also the potential to lower the cut-off grade used for the Mineral Reserve estimates, in consideration of the current higher gold price, which could convert some additional Indicated Mineral Resources into Mineral Reserves.
Limited drilling has been carried-out outside the resource pit. The 2017 drilling program was successful in confirming gold mineralization up to 400 meters on strike to the west (0.56 g/t gold over 58.1 meters, including 2.32 g/t gold over 9.0 meters) and at depth, 100 meters below the resource pit (0.92 g/t Au over 41.2 meters, including 1.92 g/t Au over 17.7 meters) (see Orea’s news release dated August 15, 2017).
For more information, see Orea’s news release titled “Columbus Gold Announces Positive Bankable Feasibility Study for Montagne d’Or Gold Project, French Guiana” dated March 20, 2017 and filed on SEDAR and the technical report prepared in accordance with the requirements of NI 43-101 titled “NI 43-101 Technical Report, Bankable Feasibility Study – Montagne d’Or Project, French Guiana” by SRK Consulting for Columbus Gold (now Orea Mining) and Nordgold with an Effective Date of March 6, 2017, and a report date of April 28, 2017, which was filed on SEDAR on April 28, 2017.
Rock Lefrançois, President & Chief Executive Officer of Orea and Qualified Person under National Instrument 43-101, has reviewed this news release and is responsible for the technical information herein, including verification of the data disclosed.
About Orea Mining Corp.
Orea is a leading gold exploration and development company operating in a prospective and underexplored segment of the Guiana Shield, South America. Its mission is to develop gold deposits with a reduced environmental footprint using innovative technologies, upholding the highest international standards for responsible mining. In French Guiana, Orea holds a major interest in the world-class Montagne d’Or mine development project and is also advancing the Maripa gold exploration project.
For more about Orea visit the company’s website at www.oreamining.com
ON BEHALF OF THE BOARD:
President & CEO