Aug 11 2016
Preston Corp ("Preston Corporation" "PSNP" or the "Company") today is pleased to provide further details on the Company's Royalty Purchase Agreement with the previously announced Arizona mine. The project is the West Port Gold Mine located near Quartzite, Arizona and is a fully permitted placer-alluvial gold project, currently in the final stages of mine construction prior to commencing commercial gold production.
The West Port Mine is forecast to process 220,000 tons per year of gold bearing material at a grade of 3 grams per ton resulting in the production of 21,000 ounces of gold per year. EBITDA is forecast at $23.5 million in 2017 and $29.8 million in 2018. The mine life currently has sufficient insitu material to operate at 800 tons per day through 2020. Preston believes that there are excellent opportunities on the existing claim block to find significant additional resources on the project along the gold bearing channel strike and at depth.
Under the terms of the royalty agreement with West Port, Preston has agreed to purchase a royalty interest in the mine for $5,000,000, receiving a contractual 50% annual return on investment.
As previously announced, the West Port Mine is a low cost, high grade placer deposit which has an all-in production cost per ounce of gold of $300 and a calculated AISC (All-In Sustaining Cost) of $466.82. The mine meets all of Preston's requirements for financing and acquisition. Preston anticipates recording revenue from this royalty in Q4 of this year.
Company President Andrew Stack states "the West Port Mine project is exactly the type of investment Preston anticipates making as we grow our business. We are dedicated to investing in low cost, permitted gold projects that meet our target ROI. We will endeavor to continue to update our stakeholders as to the timing and progress of the ramp up towards initial gold sales at the West Port Mine."