MONETA ANNOUNCES POSITIVE RESULTS FROM PRELIMINARY ECONOMIC ASSESSMENT STUDY ON SOUTH WEST DEPOSIT

Toronto, Ontario – September 09, 2020 - Moneta Porcupine Mines Inc. (TSX:ME) (OTC:MPUCF) (XETRA:MOP) (“Moneta” or the “Company”) is pleased to announce the excellent results from the Company’s Preliminary Economic Assessment (“PEA”) of the South West deposit at its 100% owned Golden Highway Project located in Timmins, Ontario. The PEA study demonstrates robust economics and is based on a stand-alone, owner-operated mine and mill with an 11-year mine life which produced an after-tax Net Present Value (“NPV”) of C$236 million using a 5% discount rate. The financial model shows an after-tax Internal Rate of Return (“IRR”) of 30% and a capital payback period of 3.4 years. All amounts are shown in Canadian dollars unless otherwise stated.

 

South West Deposit PEA Highlights

 

• After Tax Net Present Value at a 5% discount rate (“NPV5%”) of C$236 million and after-tax Internal Rate of Return (“IRR”) of 30% at US$1,500/oz gold and exchange rate of US$0.77/C$

• C$371 million after tax cash flow over the life of mine

• 75,700 ounces annual production during full production for 719,000 ounces total gold production

• Peak gold production of 85,700 ounces per annum

• Cash cost of US$590 per ounce and all in sustaining cost of US$747 per ounce gold

• Highly leveraged to the gold price with after tax NPV5% of C$423 million and 47% IRR at US$1,900 per ounce gold

• Initial capital of C$144 million, and sustaining capital of C$136 million

• After-tax discounted pay-back of 3.4 years, with an 11 year mine life

• Attractive alternative Toll Milling development option with after-tax NPV5% of C$197 million and IRR of 44% at US$1,500 gold with initial capital costs of C$65 million

• Potential to expand production from additional deposits located on the Golden Highway Project

 

“We are extremely pleased with the positive results from this preliminary economic assessment of the South West deposit and its robust project economics including an NPV of C$236 million and IRR of 30% at US$1,500 ounce gold and a 5% discount rate,” commented Gary O’Connor, CEO. “The PEA study which assumed underground extraction of our South West deposit only has shown the potential to produce up to 85,700 ounces per annum for a total of 719,000 ounces life of mine at an attractive cash cost of US$590 per ounce, with low initial capital of C$144 million repaid over 3.4 years. The excellent economics are afforded by the project’s location in Canada’s most prolific gold mining camp, Timmins Ontario, with extensive existing infrastructure and experienced and available services and workforce. The South West deposit would generate C$371 million after tax cash flow over the life of mine. We will now be able to focus on expanding the adjacent deposits and discovering new zones of gold mineralization to continue to add value to the Golden Highway Project with a growing resource base. In addition to our base case development plan, we also have a highly attractive development option which involves minor initial capital expenditure, shorter development time line and negates the need to permit and build our own processing plant and associated infrastructure assuming Toll Milling of the ore.”

 

Mr. O’Connor commented, “In addition to the highly successful PEA on our South West deposit, we have 5 additional gold deposits on the Golden Highway project and have discovered three new mineralized areas, Westaway, Halfway and South Basin in 2020, of which a maiden resource for Westaway is planned for this year. During 2020 we have doubled the footprint of continuous mineralization from 2 kilometres to 4 kilometres at Golden Highway. In addition, we have discovered regional scale potential with gold mineralization discovered over 1.2 km on the southern margins of the South Basin with a potential strike length of 12 km.”

 

PEA: TECHNICAL INPUT AND FINANCIAL RESULTS SUMMARY

 

 

The average annual mining rate and gold production is calculated for years 3 to 11 of mining when mining is at full production rates. All other parameters are measured for life of mine (LOM) and include the 2 year ramp up period. No royalties or encumbrances are attributed to any of the South West deposit. The PEA was prepared in accordance with National Instrument 43-101 (“NI 43-101”) by Micon International Limited (“Micon”) of Toronto, Canada with an effective date of September 09, 2020. The Company will file the PEA on SEDAR at www.sedar.com in accordance with NI 43-101 within 45 days. This preliminary economic assessment is preliminary in nature; it 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 preliminary economic assessment will be realized.

 

GOLD PRICE SENSITIVITIES

 

The following table demonstrates the post-tax sensitivities of NPV and IRR to gold price per ounce. The base case, highlighted in the table below, assumes US$1,500 per ounce of gold and an exchange rate of 0.77 (US$/C$):