LAVAL, CANADA -- (Marketwired) -- 04/09/13 -- Editors' Note: There are two maps associated with this press release.
TYPHOON EXPLORATION INC. (TSX VENTURE: TYP) is pleased to report results of a positive Preliminary Economic Assessment study done on the Fayolle Deposit, located 30km of the town of Rouyn-Noranda, Quebec.
The PEA study was prepared by InnovExplo with contributions from SNC-Lavalin with respect to chapter 20, "Environmental Studies, Permitting and Social or Community Impact". The PEA was prepared with the objective to compare two (2) distinct and independent scenarios, the open pit approach versus an underground mining approach, all in accordance with Standards of Disclosure for Mineral Projects defined by National Instrument 43-101 ("NI 43-101").
"The report indicates an economic potential to recover 74,813 oz. of gold from an open pit including resources amenable to mining of 568,941 tonnes at 4.35 grams per tonne", noted Mr. David Mc Donald, President of Typhoon Exploration Inc.
The Preliminary Economic Assessment study of the Fayolle Deposit, based on a 43-101-compliant technical report, will be filed on the Company's website www.explorationtyphon.com and on SEDAR www.sedar.com within 45 days.
HIGHLIGHTS (open pit scenario)
For the open pit scenario, the PEA study shows potential viability for 568,941 tonnes of diluted resources at 4.35 g/t gold (representing 74,813 ounces of recovered gold) at a minimum cut-off grade of 0.84 g/t gold. This open pit mineralized material was obtained from a global undiluted mineral resource of 1,814,800 tonnes at 2.68 g/t gold (representing 156,497 ounces of gold) at a similar minimum cut-off grade of 0.84 g/t gold.
-- The operation plan takes into account a 3,937,889 tonnes pit shell to be mined during a 3-year mine life (including one year of pre-production) with an average mine run of 350,000 tonnes of mineralized material per year, down to a depth of 85 metres with a strip ratio of 3.7.-- The average daily mineralized material production planned will be around 1,000 tonnes per day. The model uses the assumption that the material will be trucked 40 kilometres away to the Iamgold Westwood mill.-- Preliminary metallurgical testing done on two samples returned between 94% and 97% recovery using conventional cyanidation. A recovery rate of 94% is selected for this study and on the environmental side, testing done on two composites samples suggests that acid generation is highly unlikely to occur from these samples considering the high carbonate/low sulphur content profile of both types of mineralized rocks.
The study includes 100% of reclamation costs at the beginning of the project.
The pre-production capital costs, sustaining, and reclamation costs for the Fayolle Deposit open pit option are evaluated respectively at CAD$4.96 M, CAD$ 0.93 M and CAD$4.4 M. The average cash cost is estimated at US$697 per ounce of gold or $ 92 per tonne milled. The financial analysis, using a price of gold of US$1,518 per ounce, indicates a pre-tax net present value ("NPV") (using a 7% discount rate) of CAD$30.15 million with a pre-tax internal rate of return ("IRR") of 166%. On an after tax basis, the IRR is estimated at 110%.