Home > News > O3 Mining completes...

O3 Mining completes Pre-Feasibility study for Marban Engineering with annual production over 160Koz Gold

Sep 6, 2022

O3 Mining Inc. (TSX.V: OIII) (OTCQX: OIIIF) ("O3 Mining" or the "Corporation") is pleased to announce the completion of the Pre-Feasibility Study ("PFS"), prepared in accordance with the National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"), for its 100% owned Marban Engineering gold project, in the world-class mining region of Val-d'Or, Québec. 

PFS Highlights

  • Robust Project Economics: Post-tax net present value ("NPV") (discount rate 5%) of C$463 million and post-tax unlevered internal rate of return ("IRR") of 23.2% using a long-term gold price of US$1,700 per ounce and an exchange rate of C$1.00 = US$0.77.
  • Increased production profile: Annual average production increased from 115,000 ounces of gold ("oz Au") in the Preliminary Economic Assessment ("PEA") to 161,000 oz Au supported by a 50% increase in mill throughput, 15% increase in peak mine rate, lower cut-off grade of 0.30 g/t Au compared to 0.35 g/t Au in the PEA, lower strip ratio of 5.1 and increased mill gold recovery.
  • Low capital intensity: Initial capital ("CAPEX") of C$435 million including mine preproduction, processing, and infrastructure (roads, power distribution, tailings facility, ancillary buildings, and water management). Capital intensity ratio ("NPV/CAPEX") of 1.1x per dollar invested.
  • Competitive cost profile and rapid payback: All-in-Sustaining Cost ("AISC") of US$882 per ounce, a post-tax payback of 3.5 years, with C$1,971 million EBITDA and C$760 million post-tax free cash flow over the life of mine ("LOM").
  • Optimization and exploration upside towards Feasibility Study in 2023: Well-funded to perform trade-off studies assessing new technologies including autonomous haulage and trolley assist mine fleet that may impact project economics and reduce environmental footprint. Additionally, O3 Mining will continue with a brownfield exploration program on Marban Engineering including the expansion of all lateral extensions of the near-surface mineralization, unlock the potential in the Hygrade Fold area (North-West of Kierens pit) as well as the downdip extension of the Marban deposit.

Jose Vizquerra, President and CEO, states: "We are pleased with the results of our PFS for the Marban Engineering Project which demonstrates the potential to be the next gold producer in the Abitibi region in Val-d'Or, Quebec, the next step in delivering on our promise to be in production by 2026. With robust economics, Marban has shown itself to be a profitable standalone project. Using a long-term gold price of US$1,700 oz gold, the project has a post-tax unlevered IRR of 23.2% well above the 15% IRR investment threshold used by many larger gold miners, and a post-tax NPV of C$463M as well as an NPV/CAPEX ratio of 1.1x, with an AISC of US$882 per ounce. This is a key achievement in an inflationary environment in which mining companies are seeing higher cost increases. The project has an improved production profile of over 160,000 oz Au annually, for an approximately 10-year life of mine compared with our 2020 PEA. We believe the opportunity to grow Marban remains high, with many mineralized zones not included in the Mineral Resource Estimate, which could add to the LOM, and further improve Marban's economics. Current drilling at the Hygrade Fold area (North-west of Kierens pit) has the potential to add to the current resource within the greater Marban Engineering Project. We have the privilege to be developing Marban in a jurisdiction that has a green-powered grid with 99.6% renewable power and that has a strong carbon policy. Compared to other jurisdictions developing gold mines, Quebec's carbon intensity is one of the lowest in the world. Work on the feasibility-level studies has begun which we expect to complete in 2023. O3 Mining continues to deliver on all milestones and stated goals as we continue our progress towards production, and creating fundamental value with the Marban project for our shareholders and other stakeholders."

O3 Mining Webinar to be held on September 6th, 2022 at 11:00 a.m. EST – REGISTER HERE 
Marban Engineering PFS Presentation available here: VRIFY Presentation

Overview and Study Support

The Marban project is located between the cities of Malartic and Val d'Or in the Abitibi gold district of Québec, Canada. The project area contains six past-producing mines, which collectively produced 585,000 ounces of gold between 1959 and 1992. The land package owned by O3 Mining, in the heart of these mining camps, covers 125 square kilometres and is located 12 kilometres from the Canadian Malartic Mine and along the same shear structure as Wesdome Gold Mine's Kiena deposit.

  • The PFS is based on the updated Mineral Resource Estimate ("MRE") from March 1, 2022 (see press release).
  • The PFS project team was led by Ausenco Engineering Canada Inc. ("Ausenco"), an industry leader in cost-effective design and construction. Ausenco was supported by G Mining Services ("G Mining") and WSP Canada ("WSP").


Tags: Quebec / Press Releases / Gold / All Articles