Updated Feasibility Study Confirms Significant Value of Horne 5 Project for Falco Resources
Falco Resources Ltd. has announced the results of the updated feasibility study, prepared in accordance with National Instrument 43-101 Respecting Standards of Disclosure for Mineral Projects (“NI 43-101”) for the Corporation’s Horne 5 Gold Project in Rouyn-Noranda.
The UFS was updated to reflect the improved commodity prices, the silver stream financing arrangement with Osisko Gold Royalties Ltd. and the copper and zinc concentrate offtake agreements with Glencore Canada Corporation and its affiliated companies (“Glencore”). The capital and operating costs were reviewed to reflect current market conditions for labour, supplies and services.
UPDATED FEASIBILITY STUDY CONFIRMS SIGNIFICANT VALUE OF THE HORNE 5 PROJECT
The UFS reiterates that the Horne 5 Project represents a robust, high margin, 15-year underground mining project with attractive economics in the current gold price environment. At a gold price of $1,600 per ounce and using an exchange rate of C$1.28 = US$1.00, the UFS shows that the Horne 5 Project would generate an after-tax net present value (“NPV”), at a 5% discount rate, of $761 million and an after-tax internal rate of return (“IRR”) of 18.9%. In this scenario, the mine could become the next significant gold producer in Québec, with a production profile averaging 220,300 payable ounces annually over life of mine (“LOM”), with an average all-in sustaining costs (“AISC”) of $587 per ounce, net of by-product credits.
Luc Lessard, President and Chief Executive Officer, noted: “The Horne 5 Project demonstrates robust returns from average annual gold production of 220,300 ounces over a 15-year mine life. The significant copper and zinc by-product credits from the copper and zinc production, as well as the highly automated modern operations result in a low projected all-in sustaining cost of $587 per ounce. The Project benefits from strong existing infrastructure in the world-class Rouyn-Noranda mining area. We expect that the Horne 5 Project will deliver strong cashflows and outstanding benefits to all of its stakeholders with anticipated production in the second half of 2025.”
UPDATED FEASIBILITY STUDY HIGHLIGHTS
The UFS was prepared in Canadian Dollars (C$). The values have been converted to U.S. Dollars (US$) at an exchange rate of C$1.28 = US$1.00 for this press release.
Base case economics are stated using a gold price of $1,600 per ounce, silver price of $21.00 per ounce, copper price of $3.20 per pound, zinc price of $1.15 per pound and an exchange rate of C$1.28 equal to US$1.00.
- NPV of $1,279 million at a 5% discount rate and an IRR of 23.0% before taxes and mining duties;
- NPV of $761 million at a 5% discount rate and an IRR of 18.9% after taxes and mining duties;
- Average annual gold production of 220,300 payable ounces annually over the 15-year LOM;
- Low average AISC of $587 per ounce;
- C$43.11 per tonne processed total unit operating cost;
- Forward capital and pre-production costs of $844.2 million, including 9.2% contingency;
- Conservative mining reserves by maintaining 2017 commodity price assumptions, which are well below current levels.
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