Preliminary Assessment Completed for Paramount Gold's Sleeper Project
Study Predicts 17 Year Operation with Average Annual Gold Production of 172,000 Ounces
Estimated Pre-Tax NPV of US$695 Million at a 5% Discount Rate and IRR of 26.8% at $1,384 Gold Price
Paramount Gold and Silver Corp.(NYSE: PZG) announced today the results of a Preliminary Economic Assessment ("PEA") for its 100%-owned Sleeper Gold and Silver project located in Humboldt County, Nevada. The PEA has been led by Scott E. Wilson Consulting Inc. ("SEWC") using resource and geologic information developed by SRK Consulting (Chile) S.A. ("SRK"). The PEA confirms that the Sleeper project represents an excellent economic opportunity in the current gold price environment. The complete PEA will be filed at www.sedar.com within 45 days.
Commenting on the results of the PEA, Paramount President and CEO Christopher Crupi stated that "we are delighted by the depth of experience the Scott E. Wilson consulting team has brought to this assignment, particularly their work on other similar brown field projects such as Allied Nevada`s restart of the Hycroft Mine. This PEA is an important step in the rebirth of what was once a very successful Nevada gold producer. The relatively low estimated start-up capital, unit operating costs and a 17 year life make Sleeper an attractive development option for many producers. As SEWC has confirmed, the exploration potential at Sleeper is highly favorable for expanding the resources available to the open pit operation envisioned in the PEA. We are now drilling these close-in targets to improve the project while also exploring for a second high grade Sleeper mine on our large land position."
In their analysis, SEWC evaluated two distinct development scenarios: (i) a heap leach only operation consisting of large-scale open pit mining, followed by standard heap leaching for all oxide and suitable sulphide material; and (ii) a combined heap leach and conventional milling option consisting of large-scale open pit mining followed by standard heap leaching for all oxide material and conventional milling for suitable sulphide material.
SEWC has concluded that the most attractive development scenario for Sleeper consists of a large-scale open pit mining operation with a heap leach processing plant handling both oxide and sulphide material, producing a gold-silver dore. A "heap leach only" base case scenario was developed for the project incorporating an 81,000 tonnes per day operation (approximately 30 million tonnes per year throughput), resulting in a projected 17 year operation with average annual production of 172,000 ounces of gold and 263,000 ounces of silver. Projected life of mine average cash operating costs are US$767 per ounce of equivalent gold recovered. Start-up capital costs for this project scenario are estimated at US$346 million. Sustaining capital costs over the project's life are estimated at an additional $278 million. Total capital cost contingencies over the project life are estimated at an additional $64 million, bringing the total life of mine capital costs to $688 million. The total cost of equivalent gold production (including cash operating costs and total capital and contingency costs over the life of the mine) is estimated at US$996 per ounce.
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