QUEBEC CITY, QUEBEC -- (Marketwire) -- 01/15/13 -- Clifton Star Resources Inc. ("Clifton Star" or "The Corporation") (TSX VENTURE: CFO)(FRANKFURT: C3T) is pleased to report that it has received the results of a positive Preliminary Economic Assessment Study ("PEA") on the Duparquet Project. The PEA Study was prepared by InnoveExplo with contributions from Bateman Engineering (Bateman), Stavibel, a subsidiary of SNC-Lavalin, Dreisinger Consulting, and P.J. Lafleur GeoConseil, in accordance with the Standards of Disclosure for Mineral Projects as defined by National Instrument 43-101 ("NI 43-101"). The contribution of each party is noted below under the section "Qualified Persons". The complete study will be filed on the Corporation's website and on SEDAR within 45 days.
The PEA Study was prepared as an open pit mining project relating solely to the mineral resources located on the Duparquet Property, situated in north-western Quebec, 50 kilometres by road to the north of the mining town of Rouyn-Noranda. The pre-production capital costs and sustaining costs for the Duparquet Project are estimated, respectively, at $370 million and $144 million, excluding $22.6 million for closure costs. The average operating cash cost is estimated at US$726 per ounce of gold.
The financial analysis, using a gold price of US$1,472 per ounce, indicates a pre-tax net present value ("NPV") (using a 5 % discount rate) of $382 million, with a pre-tax internal rate of return ("IRR") of 19.5% and a payback period of 4.2 years. Sensitivity analysis indicates a pre-tax NPV (5% discount rate) of $621 million, with an IRR of 27.6%, and a payback period of 2.95 years at a gold price of US$1,700 per ounce.
A new NI 43-101 resource estimate was prepared for the PEA by InnovExplo (see hereafter), and was used to develop an open-pit mining plan resulting in 1.67 million ounces of gold. The mine plan was designed for a nominal 8,000 tonne-per-day operation, with an average stripping ratio of 5.52 and a life of mine (LOM) of 16 years. Average yearly gold production for the first 5 years is 144,800 ounces, and the first 10 years average is 132,200 ounces. For the LOM a yearly average of 104,400 gold ounces is predicted.
All mineralized material classified as Measured and Indicated (71%) and Inferred (29%) Mineral Resources was considered in the optimization and mine plan. The PEA is preliminary in nature, it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves, and there is no certainty that the PEA will be realized.
----------------------------------------------------------------------------PEA -Highlights & Assumptions (All $ are Canadian except when indicated)============================================================================----------------------------------------------------------------------------Gold Price (US$/ounce): 3 year trailing average 1,472----------------------------------------------------------------------------Foreign exchange rate (C$/US$): 3 year trailing average. 1.01: 1.00----------------------------------------------------------------------------In-pit and Tailing Resources (Million ounces, all categories) 1.79----------------------------------------------------------------------------Mine plan tonnage (16 year, LOM) : 41.6 Million tonnes----------------------------------------------------------------------------Mine plan Tonnage & grade ROM: 19.3Mt 1.88 g/t(grams/tonne) Stockpiles: 18.2Mt 0.86 g/t Tailings: 4.1Mt 0.94 g/t----------------------------------------------------------------------------Strip ratio (Waste: Ore) 5.52 : 1----------------------------------------------------------------------------Nominal daily production rate (tonnes) 8,000----------------------------------------------------------------------------Estimated overall gold recovery (%) 93.2%----------------------------------------------------------------------------Total recovered gold (Million ounces) 1.67----------------------------------------------------------------------------Pre-production period, post permitting (years) 2----------------------------------------------------------------------------Mine life (years) 16----------------------------------------------------------------------------Average annual gold production (ounces): LOM = 16 years : 104,400 ROM (Average first 5 years): 144,800 ROM (Average first 10 years): 132,200 Milling Stockpiles and Tailings (last 6 years): 58,100============================================================================Pre-production capital ($ Million) 370.3----------------------------------------------------------------------------Sustaining capital (excluding 22.6 million for closure costs) ($ Million) 144.7----------------------------------------------------------------------------Cost per tonne of rock milled ($) 13.46----------------------------------------------------------------------------Average operating cash cost ($)/t milled, LOM, 16 years 29.38 First 10 years: 36.65 Last 6 years: 16.62----------------------------------------------------------------------------Average total cash cost (US$/ounce) LOM, 16 years 726----------------------------------------------------------------------------Average annual cash flow pre-tax (years 1 - 10) ($ Million) 83.6----------------------------------------------------------------------------Payback period (years) 4.2----------------------------------------------------------------------------IRR pre-tax (%) 19.5----------------------------------------------------------------------------IRR after-tax (%) 15.4----------------------------------------------------------------------------NPV 5% discount pre-tax ($ Million) 382----------------------------------------------------------------------------
