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O3 Mining PEA suggests 12 year life for Garrison Project near Kirkland Lake

Dec 15, 2020

O3 Mining Inc.has announced positive results from an independent Preliminary Economic Assessment on its 100 percent owned Garrison project near Kirkland Lake.

Highlights of the PEA*

  • Long-term gold price: US$1,450/oz
  • Exchange rate: C$1.00 = US$0.75
  • After-tax net present value (“NPV”) at 5% discount rate: $321 million
  • After-tax internal rate of return (“IRR”): 33.0%
  • After-tax payback period: 2.3 years
  • Initial capital (“CAPEX”): $267 million for a 4.0 million tonne per year processing plant including mine preproduction, infrastructure (roads, power line relocation, tailings facility, ancillary buildings, and water management)
  • Life of mine (“LOM”): 12 years
  • Average LOM strip ratio (waste: mined resource): 2.7
  • Total mill feed of 47.3 million tonnes resulting in LOM gold production of 1.1 Million oz
  • LOM Plan: 82% of total mill feed was sourced from mineral resources classified in the Measured and Indicated category
  • Average annual gold production of 121,000 oz in years 1 to 8 (94,000 oz for LOM)
  • Average mill head grade of 1.04 g/t gold in years 1 to 8 (0.82 g/t for LOM)
  • Average mill recovery: 89.8%
  • Measured and Indicated Mineral Resource of 66.3 Mt at 0.86 g/t Au grade
  • Cash Cost: US$721/oz
  • All-in Sustaining Cost (“AISC”): US$818/oz 

O3 Mining is pleased to present the results of a PEA on its Garrison Project for an 11,000 tonnes per day open pit mining and Carbon in Leach processing operation with production spanning 12 years clearly demonstrating the potential for the company to become a major North American gold producer. The PEA delivers robust economics with an after-tax IRR of 33.0% and after-tax NPV of $321M at a US$1,450/oz gold price, with very attractive cash costs and AISC, low CAPEX and low capital intensity. The project will target production in excess of 121,000 ounces gold per year during years 1 to 8, while peaking at more than 155,000 ounces in Year 2.

The PEA has been prepared by Ausenco Engineering Canada Inc. (“Ausenco”) in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

* Cautionary Statement: The reader is advised that the PEA summarized in this news release is intended to provide only an initial, high-level review of the project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of inferred mineral resources. Inferred mineral resources are considered to be too speculative to be used in an economic analysis except as allowed for by NI 43-101 for PEA studies. There is no guarantee that inferred mineral resources can be converted to indicated or measured mineral resources, and as such, there is no guarantee the project economics described herein will be achieved.

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