Tag Archives: PEA

NEWS: Gold Canyon Corporate Update and New Investor Relations Agreement

Mar 11, 2015

Gold Canyon Resources Inc. (TSX VENTURE:GCU)(OTC PINK:GDCRF) (“Gold Canyon” or the “Company“) is pleased to provide an update of the Company’s activities. On February 5, 2015, Gold Canyon completed a private placement raising gross proceeds of $1,306,850. Given the Company’s conservative use of cash, the current working capital allows Gold Canyon to continue to collect environmental baseline data vital for future permitting of its 100% controlled Springpole Gold Project as well as support corporate and project overhead into next year.

On November 5, 2014, the Company announced completion of three years of aquatic habitat surveys at the Springpole Gold Project. These surveys have uncovered no prohibitive issues. In 2015, the Company plans to continue to collect additional data on aquatic habitat and water quality and chemistry to augment its already robust dataset while at the same time identifying opportunities in the region around Springpole to create and/or improve aquatic habitat to offset habitat displaced by any potential future mine plan. Once all opportunities have been identified, they will be reviewed and assessed during further discussions with the Department of Fisheries and Oceans Canada (DFO). Some potential offset initiatives may be suitable for working with local First Nations communities, an opportunity Gold Canyon seeks to pursue. Gold Canyon is now at the stage where it can begin work on aspects of the project needed to develop a mine environmental assessment (EA).

“We continued to reduce overhead costs over the latter part of 2014,” commented Akiko Levinson, President, CEO and director of Gold Canyon. “Although the downturn in the mining sector has been sharp, we have the means to keep weathering this storm and be able to look at various options we may have to move forward.”

Springpole Gold Project

In a news release dated March 25, 2013, Gold Canyon announced a Preliminary Economic Assessment (PEA) prepared by SRK Consulting (Canada) Inc. of Vancouver, British Columbia for the project. This PEA provides preliminary support for a potential conventional open-pit mining and milling operation. At a 5% discount rate and a US$1,300/oz gold price, the project, has an estimated pre-tax net present value (NPV) of US$579 million, a pre-tax internal rate of return (IRR) of 25.4%, and a non-discounted payback of just 1.7 years. Other highlights of the project include:

  • At full operation, an estimated 217,000 ozs and 1,200,000 ozs average annual gold and silver production, respectively
  • Estimated cash cost of US$636/equivalent ounce gold (eq.oz Au) and all-in cost of US$860/eq.oz Au (eq.oz Au = total revenue/Au price)
  • Strip ratio of 1.7
  • Average mined gold grade of 1.25 gpt and silver, 6.31 gpt (undiluted)
  • Initial capital cost of US$438 million and total capital cost including sustaining of US$544 million
  • Payback period of 1.7 years (non-discounted)
  • Pre-tax NPV of US$579 million
  • IRR (pre-tax) of 25.4%
  • Life of mine of 11 years

The PEA is intended to provide an initial review of the Company’s Springpole Gold Project’s potential and is preliminary in nature. The PEA includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA based on these mineral resources will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other relevant issues. The quantity and grade of reported inferred resources in any estimation are uncertain in nature and there has been insufficient exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration will result in upgrading them to an indicated or measured mineral resource category.

The PEA is effective as at March 25, 2013 and dated May 3, 2013, and is available through the Internet under the Company’s profile on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Company’s website at www.goldcanyon.ca. The PEA is based on the project’s most recent National Instrument 43-101 (“NI 43-101”) compliant mineral resource estimate that includes an Indicated Mineral Resource of 128.2 million tonnes grading 1.07 g/t gold and 5.7 g/t silver and an Inferred Mineral Resource of 25.7 million tonnes grading 0.83 g/t gold and 3.2 g/t silver at a cutoff grade of 0.4 g/t gold. This estimate is set out in an independent technical report, entitled “Mineral Resource Update for the Springpole Project, NW Ontario, Canada” (the “Technical Report”), dated November 30, 2012 with an effective date of September 19, 2012, which was prepared for Gold Canyon by Dr. Gilles Arseneau (P.Geo.), associate consultant with SRK Consulting (Canada) Inc., an independent Qualified Person as defined by NI 43-101. The Technical Report is also on SEDAR at www.sedar.com and on the Company’s website.

Investor Relations Agreement

Gold Canyon is also pleased to announce that it has retained the services of Renmark Financial Communications Inc. to handle its investor relations activities. In consideration of the services to be provided, the Company has agreed to pay a monthly retainer of $5,500 starting March 6th, 2015.

Renmark Financial Communications Inc. does not have any interest, directly or indirectly, in Gold Canyon or its securities, or any right or intent to acquire such an interest.

Qualified Person

The PEA was completed by SRK Consulting (Canada) Inc. of Vancouver, British Columbia, pursuant to NI 43-101. The PEA was completed by, or under the supervision of Bruce Murphy, Maritz Rykaart, Mark Liskowich, Dino Pilotto and Adrian Dance, each independent Qualified Persons (as defined in NI 43-101). Adrian Dance, a Qualified Person pursuant to NI 43-101, reviewed and approved the technical and scientific information relating to the PEA contained in this press release. Dr. Quinton Hennigh, Ph.D., P.Geo., a Qualified Person pursuant to NI 43-101 who is acting as a technical adviser to, and a director of, Gold Canyon, is also responsible for approving the technical information in this news release that is not related to the PEA.

Full release

Gold buyouts heat up

Financial Post, Mar 3, 2015

Will Gold Canyon be next?

You may not be actively shopping for shoes, but if you stumble on a stylish pair discounted 90% – you’re probably going to buy them.

This bargain-hunting reflex has hit the gold sector causing a flurry of acquisitions including Goldcorp’s (NYSE: GG) $526 million acquisition of Probe Mines, Agnico Eagles’ (NYSE: AEM) $205 million acquisition of Cayden Resources, and Timmins Gold (TSX: TMM) $140 million purchase of Newstrike Capital.

Newmont Mines’ (NYSE: NEM) CEO Gary Goldberg also recently stated that “We’re always looking to improve our portfolio,” and “It doesn’t hurt to just look around.”

Gold Canyon’s (TSX.V: GCU) Ontario, Canada Springpole project may be the next shiny set of shoes about to be scooped up.

“Gold Canyon offers one of the best opportunities to leverage the price of gold,” wrote Bob Moriarty in a December, 2014 publication note, “at $0.10 a share, you are paying about $2.60 an ounce for gold in a safe jurisdiction. That’s pretty hard to beat.” [ed. note: GCU share price has risen 70% since then].

Springpole is one of the highest quality bulk tonnage gold deposits in Canada. In 2013, Gold Canyon announced a Preliminary Economic Assessment (PEA) for the project, supporting a conventional open-pit mine and milling operation.

“Springpole Gold is an alkaline gold deposit,” stated GCU Director Dr. Quinton Hennigh in an exclusive interview. “These alkaline systems are typically large and disseminated with low deleterious elements. The first time I looked at Springpole I felt that it could be a 3 million + ounce gold system, and it has far exceeded my expectations.”

Eric Sprott invested in the first tranche financing in 2010 to get the company drilling. That program was a success, revealing several intervals of over 100 meters of two to three gram gold. Since then 85,000 meters have been drilled, proving up a 5.1 million ounce resource.

“We published the Preliminary Economic Assessment (PEA) in March 2013,” recalls Hennigh. “The deposit had glowing economics. The initial operation was projected to generate 217,000 ounces of gold and 1.2 million ounces of silver per year. The silver credit is significant. Six grams of silver for every gram of gold, definitely improves the economics of the mine.”

At $1,300 gold and a 5% discount Springpole has a pre-tax net present value (NPV) estimated at US $579 million, a pre-tax internal rate of return (IRR) of 25.4%, and a non-discounted payback of just 1.7 years. While the gold price has recently fallen to US $1,200 per ounce, in Canadian dollars it is higher than what it was when the PEA was released. Not only will the revenue be positively affected, operating costs are likely to be lower, owing to much lower oil and steel prices. Hence, if the PEA were to be revised, the numbers should actually look better today than they did when gold was US$1,300 per ounce.

“We’ll be mining a pit resource of about 1.25 grams per ton of gold and about 6.31 grams per ton of silver,” stated Hennigh. “It is a robust metal asset with consistency and continuity. We are also looking at a strip ratio that is very low. From the point of view of a mine investor wanting to de-risk its money – the Springpole Gold project is a safe bet.”

The Red Lake Camp is in a favorable mining jurisdiction. There are no mines immediately around Springpole, but Goldcorp’s Musselwhite project is to the north-east, and several historic mines are in close proximity.

“We’ve done a lot of engineering work to make sure that we can mine this deposit without any net environmental damage,” stated Hennigh. “I anticipate that we will dyke and dewater a small portion of the lake on our property. We’ve completed extensive studies of the fish habitat, establishing that there are no endangered species or sensitive spawning grounds. We are continuing to receive advice and support from the Department of Fisheries and Oceans Canada (DFO).”

Hennigh does not anticipate any environmental, geological or financial impediment to moving the Springpole project forward.

“We’ve signed a protocol agreement with the local First Nations,” stated Hennigh. “They have a protocol agreement amongst themselves, to negotiate in good faith with Gold Canyon. We expect it to be a fruitful partnership – with employment, knowledge and economic benefits flowing in both directions.”

Hennigh stresses that Gold Canyon is not an early stage exploration company.

“For our next steps, we will be advancing our geo-technical work,” stated Hennigh. “That includes drilling holes to test the structural integrity of the pit. The PEA has formed a solid foundation for launching into a feasibility study. There was small amount of ‘inferred resource’ that needed to be converted to ‘indicated’. Although our resource has not officially been updated, the last drill program was designed to accomplish that. Currently, the PEA pit resource is effectively all indicated, meaning we can take it forward to feasibility level study without the need for further resource drilling.”

Because mineralization in the Springpole deposit is consistent, Hennigh and the Gold Canyon geological team think it is possible to go right to a feasibility study. The PEA estimated cash cost is US $636/equivalent ounce gold, with a life of mine of 11 years.

“This is one of the best bulk tonnage projects left in Canada,” stated Hennigh. “Over the past few years, projects like ours have been bought one-by-one.”