May 2 2014
TriMetals Mining Inc., a gold stock, is pleased to announce the completion of its very positive first 43-101 compliant Preliminary Economic Assessment ("PEA") at the Gold Springs gold-silver project in mining friendly Nevada/Utah, USA.
The PEA supports:
- a 9 year, 10,000 tpd "heap-leach" project;
- a pre-tax NPV5%of US$162 million;
- a pre-tax IRR of 57.5%;
- a cash cost of US$614/AuEq*oz; and
- total costs of US$749/AuEq*oz.
These estimates were made using the previously disclosed 2014 mineral resource estimate for Gold Springs, a $1,300/oz gold price and $21/oz silver price and assumes contractor mining. The Company has so far only drilled portions of 2 of 18 areas of outcropping gold mineralization and none of the buried geophysical targets at Gold Springs.
The entire Technical Report containing the PEA can be viewed under the Company's profile on SEDAR or on the Company's website at: www.trimetalsmining.com
Ralph Fitch, President and CEO stated, "As I alluded to in my recent Letter to Shareholders a strongly positive PEA such as the one announced here moves the Company from the realm of exploration speculation to a Company with an asset with an estimated value that can be moved towards production by completion of engineering studies. The massive advantage the Company has is that less than 10% of the prospective areas at Gold Springs have been drilled, so even though the present resource estimate provides the ounces for a strongly positive PEA, there is a significant opportunity to expand the estimated resource through drilling and further enhance both the project and Company's common share-valuation."
Importantly the study also reviewed economics at lower gold prices and the project returned a positive pre-tax net present value with a discount rate of 5% ("NPV5%") of $82 million with a pre-tax 33% internal rate of return ("IRR") even at a $1,000/oz gold price.
Lane and Associates Inc. was contracted to complete a Scoping Study on the Gold Springs Project which was upgraded into a PEA supported by a National Instrument 43-101 compliant Technical Report. The concept was to assess whether the present project could potentially be developed into a profitable operation.
The issue was studied by developing a series of pits using the existing Gold Springs resource estimate starting with the highest grade material and lowest production rate, Case 1, to a pit including the lowest mineable grade and a higher production rate, Case 7.
The seven cases assessed in the PEA using the existing resource estimate show that the most robust case (Case 4), the one described at the beginning of this news release, is a 10,000 tonne per day ("tpd") open pit operation which extracts the gold and silver in a "heap leach" and recovers the metal through the Merrill-Crowe process.
The actual project would be designed such that it could be expanded if and when the resource estimate is expanded. Management believes that additional expansion of the resource estimate from the present base, with additional exploration, is very likely since resource drilling has only been carried out on a limited portion of the prospective areas.
The PEA used a base case gold price of $1,300 an ounce and a silver price of $21 an ounce. Each Case was also reviewed at lower gold prices and Case 4 returned a positive pre-tax NPV5% of $82million with a pre-tax 33%IRR even at a $1,000/oz gold price (with $21/oz silver price) and if gold rises in value, then the Case 4 pre-tax NPV5% doubles to $324M at a gold price of $1,900/oz. This demonstrates that Gold Springs is a very robust gold-silver project.
Case 4-Contractor Mining capex is $58M and operating costs are $8.16/ore tonne. The pre-tax payback period is approximately 1.5 years or approximately 2 years after tax. The Case 4 project produced an average of 48,000 oz AuEq* per year yielding an average pre-tax cash flow per year of $25M for 9 years with the first 3 years being $13M, $50M and $46M.
In the after tax Case 4-Contractor Mining Scenario the NPV5% drops to US$109 million from US$162 million and the IRR from 57.5% to 42%. This assumed a 25% Federal tax rate and 5% State tax for Nevada and Utah.
About TriMetals Mining Inc.
TriMetals Mining Inc. is a growth focused mineral exploration company creating value through the exploration and development of the near surface, Gold Springs gold-silver project in mining friendly Nevada and Utah in the U.S.A.; the advancement of the large scale Escalones copper-gold project in Chile, and realization of value from the expropriated Malku Khota project in Bolivia through an arbitration process.
The Company's approach to business combines the team's track record of discovery and advancement of large projects, key operational and process expertise, and a focus on community relations and sustainable development. Management has extensive experience in the global exploration and mining industry.
The Company's common shares and Class B shares are listed on the Toronto Stock Exchange under the symbols "TMI" and "TMI.B" and the common shares and Class B shares also trade on the OTCQX market under the symbol "TMIAF" and "TMIBF". Additional information related to TriMetals Mining Inc. is available at www.trimetalsmining.com and on SEDAR at www.sedar.com.
Qualified Person
The information in this news release was derived from the Preliminary Economic Assessment on the Gold Springs Property, Utah/Nevada, USA dated April 30, 2014, authored by Lane and Associates and Kurt Katsura. Lane and Associates prepared the economic analysis in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101). Ms. Terre Lane, President of Lane and Associates is a "qualified person", as defined in NI 43-101, is "independent" of the Company, as defined in NI 43-101, and has reviewed and approved the technical information regarding the economic analysis in this release. The NI 43-101 compliant Technical Report supporting the PEA was filed on SEDAR on May 1, 2014.
Gold Equivalence: AuEq* was calculated using a gold/silver ratio of 57.14 to be consistent with that used for the previously reported resource estimate.