2014 Preliminary Economic Assessment
Details of the 2014 Preliminary Economic Assessment (PEA) can be found within the “Amended NI 43-101 Technical Report on the Caspiche Project, Atacama Region, Chile” dated December 19, 2014 with an effective date of April 30, 2014. The PEA evaluated three development options for the Caspiche gold-copper deposit in Chile.
The PEA evaluated a low capex approach for the potential development of the Caspiche gold-copper deposit and assessed options for open pit mining the near surface gold oxide zone, expanded open pit mining into the gold copper zone, and underground mining of the central, higher grade portion of the gold copper sulphide deposit. Based on the PEA studies, Exeter believes the Caspiche deposit could be developed using standalone or staged mine plans depending on Company objectives and assumed economic parameters. Three preferred option, based on variable development assumptions, are outlined below:
Option 1: a standalone, 30,000 tonnes per day (“tpd”) heap leach oxide gold project, producing a projected average of 122,000 gold equivalent* ounces (“oz”) annually over a planned 10 year mine life, including 148,000 oz annually in the first five years. To view details relating to Option 1 click here.
Option 2:a 60,000 tpd open pit, heap leach oxide gold operation followed by expanded open pit mining (27,000 tpd) of the gold copper sulphide zone. Planned mine life is 18 years with projected average annual production of approximately 289,000 oz gold equivalent* per year. To view details relating to Option 2 click here.
Option 3:a 60,000 tpd open pit, heap leach oxide gold operation transitioning to underground sub level open stope mining (27,000 tpd) of the higher grade gold copper sulphide zone. This option is projected to produce an average of 250,000 oz of gold in years 1-3 and 425,000 oz gold equivalent* per year in years 4-13. Over a planned 42 year mine life projected production is 344,000 oz gold equivalent* per year. To view details relating to Option 3 click here.
Summary of PEA options for Caspiche development:
|Item||Unit||Oxide 30,000 tpd standalone mine||Combined Oxide 60,000 tpd-Sulphide (open pit) 27,000 tpd||Combined Oxide 60,000 tpd-Sulphide (underground) 27,000 tpd|
|Annual Average AuEq* Prod.||oz||122,000||289,000||344,000|
|LOM Production AuEq*||M oz||1.27||4.9||14.2|
|NPV @ 5%||US$ M||355||967||1,636|
|After-tax – 20% Tax rate|
|NPV @ 5%||US$ M||279||737||1,271|
|Initial Capex||US$ M||251||371||387|
|LOM Sustaining Capex||US$ M||93||926||1,580|
|Total Capex||US$ M||343||1,297||1,967|
|Capital Utilization per AuEq* oz||US$||270||264||139|
|Unit Total Opex Processed||US$ / t||6.5||9.4||20.1|
|Cash Cost – AuEq*||US$ / oz||546||486||649|
|Total Cash Cost – AuEq*||US$ / oz||589||551||709|
|All in Sustaining Cash cost AuEq*||US$ / oz||676||752||828|
|C1 Cash Cost – CuEq**||US$ / lb||NA||1.31||1.77|
-metal price assumptions US$1,300/oz Au, US$3.00/lb Cu, US$20/oz Ag, some rows and columns may not sum due to rounding.
Based on the findings of the PEA, the Caspiche Project, with a near surface oxide only gold zone, a central higher grade gold-copper core, and a surrounding larger gold-copper mineralized zone, presents a range of mine development options. Given the current industry dynamics, Exeter believes a staged development approach is appropriate. The compelling preliminary economics and modest capital requirements, demonstrate that advancing the standalone surface oxide gold zone (Option 1) through to a production decision, is the logical path forward for Exeter. To develop Caspiche on any of the larger, more advanced mine plans is an option that improves with the operating cash flows generated by initial mining of the oxide gold zone.
Critical for any mine development in the Caspiche region is securing adequate water resources. Exeter continues a program to establish an independently owned water supply to minimise the cost of water procurement to the project. Exeter is optimistic that its current water program could provide quantities of water to meet all of the mining options outlined in the PEA. By establishing secured water resources, Exeter expects feasibility and environmental impact studies for the Caspiche near surface oxide gold zone can be finalized.
Co-Chairman of Exeter, Yale Simpson states, “Development options at Caspiche, whether modest or large scale, deliver strong economic returns at current metal prices. Our ability in today’s market to focus on advancing the 1.5 million ounce gold oxide open pit is sensible and achievable. Importantly for shareholders, with future elevated gold and copper markets, we believe the value of the very large Caspiche gold-copper inventory will be a strong value driver for Exeter. Caspiche is unique, representing one of only a few scalable development projects that is not yet controlled by a major company.”
Environmental, Corporate Social Responsibility
To date, Exeter has conducted various baseline environmental studies at Caspiche which cover the area considered for each of the options and which have included water and air quality monitoring, fauna and flora and archeological studies. In order to collect required year round weather data for potential development at Caspiche, the Company has also installed a number of weather monitoring facilities. The various base line studies are ongoing.
Exeter has engaged and continues to engage the indigenous communities in discussions and explain ongoing studies and potential development activities in the project area. The Company has secured an access agreement over certain indigenous community areas where its exploration camp was located. In future the Company expects to enter into negotiation with indigenous communities for access to certain areas which may be required for potential development and mining activity which are outside of the area covered by the easement secured from the Chilean government recently.