Vancouver, BC, August 1, 2014 -. Goldsource Mines (TSXV:GXS) (FSE:G5M) has
announced the results of its Preliminary Economic Assessment Technical Report
for the company's 100% owned Eagle Mountain gold project, a near-surface
saprolite oxide resource located in Guyana, South America, approximately 230
kilometres southwest of the capital, Georgetown.
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Conceptually, the PEA results suggest that the project has low capital and
operating costs, minimized technical risk and a short development timeline.
Not considered in the PEA are the in-situ "fresh-rock" resources of Indicated
2,331,000 tonnes @ 1.52 grams per tonne gold containing 114,000 ounces and
Inferred 13,433,000 tonnes @ 1.13 grams per tonne, containing 486,000 ounces,
both at 0.5 grams per tonne cut-off.
Ioannis (Yannis) Tsitos, Goldsource's President stated: "We are extremely
pleased with the PEA results for this relatively low-risk phase of development
for the Eagle Mountain gold project. The results exhibit very attractive Rates
of Return. The creativity of the phased construction approach, its modular
design and the simplicity of the mining and processing of the low-strip ratio
saprolite material have resulted in an optimized development scenario for this
deposit. In addition, the inventory of potentially recoverable ounces of gold in
the oversize materials and the underlying hard rock resource provide us with a
significant 'blue-sky' potential for further development."
Following are some highlights of the Base Case economic estimates, using a gold
price $1,250 per ounce.
* Pre-tax Net Present Value of $69.4 million and after-tax NPV of $45.6
million, using a 5% discount rate
* Pre-tax NPV of $61.1 million and after-tax NPV of $39.8 million, using a 7%
* Pre-tax Internal Rate of Return of 84% and after-tax IRR of 63%
* Phase 1, pre-production capital costs of $5.9 million, includes a 15%
* Total capital costs including proposed Phase II, III, and IV expansions, and
sustaining capital are estimated at $24.2 million
* Cash operating costs, exclusive of sustaining capital, for saprolite mine
life averages $480 per ounce gold, including a 15% contingency
* Cost per tonne of mill feed averages $8.96
* Pre-tax undiscounted operating cash flow before capital expenditures
totalling $123.4 million.
* 8-year Life of Mine Production PEA mine plan totalling 8.6 million tonnes
at an average grade of 1.20 grams per tonne gold (diluted and recoverable).
* Of the 8.6 million tonnes, only 7.3 million tonnes (undersize sub-2mm)
grading 1.20 g/tonne gold will be conceptually processed. The remaining
tonnes (oversize larger than 2mm) would be stockpiled for further
metallurgical test work and potential further processing.
* Conceptually, the first four years of gold production would be
5,600, 14,400, 21,600 and 28,800 ounces gold, respectively.
* 8 year life of mine production estimates 168,700 ounces gold from gravity-
only processing at estimated 60% recovery
* Inventory of 161,900 oz Au in settlement ponds from gravity-only processing
rejects for potential future reprocessing using standard technologies.
For more detailed information, please refer to the company's latest news
release. The NI 43-101 Technical Report is being completed by Toronto-based
A.C.A. Howe International and will be filed on Sedar.com within 45 days.
N. Eric Fier, Goldsource's Chief Operating Officer commented: "Through our
experience, we have applied the responsible phased-approach business model to
the Eagle Mountain gold project in order to minimize initial capital and project
risk. This conceptual approach encompasses a "Phase I" starter open cut for
mining at 1,000 tonnes per day with subsequent low impact and low cost gravity-
only processing. Upon successful completion of Phase I, the Company plans to
systematically install and operate three additional similar plants over a four-
year schedule with a cumulative rate of 3,500 to 4,000 tonnes per
day.Conceptually, additional processing plants will be paid for through
operating cash flow. The project has several potential opportunities to
accelerate PEA-defined production once initial success in Phase I is achieved."
The company does not presently have the funds to carry out these developments
and plans to source the funds through equity or debt financing or a combination
Goldsource is trading at $0.26 and with 79.1 million shares outstanding, the
company is capitalized at $20.6 million. For more information please visit the
company's website www.goldsourcemines.com, or contact Fred Cooper at
1-866-691-1760 or email firstname.lastname@example.org.
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