The 2013 Kinsley work program includes 22,000 metres of core and RC drilling stepping out from the historic pits, and to test priority exploration targets on flanking and outlying targets. Nevada Sunrise Gold Corporation holds a 35% interest in Kinsley and will be responsible for its pro-rata share of costs for this year's program.
The Company holds a 40% interest in Halilaga, a copper-gold porphyry located 20 kilometres southeast of TV Tower. Halilaga advanced considerably during 2012, with an initial resource estimate, and the completion of a preliminary economic assessment (the "Halilaga PEA").
Highlights of the Halilaga PEA (Base Case: USD$1,200/oz. Au and USD$2.90/lb. copper) include:
-- Pre-tax IRR of 26%; After-tax IRR of 20%-- Pre-tax NPV7% of $675 million; After-tax NPV7% of $474 million-- 2.1 year pre-tax payback; 2.7 year after-tax payback
The resource estimate at Halilaga includes (i) an Indicated sulphide resource of 1.112 billion pounds of copper at an average grade of 0.30% copper (168,167,000 tonnes), and 1.665 million ounces of gold at an average grade of 0.31 g/t gold, and (ii) an Inferred sulphide resource of 1.007 billion pounds of copper at an average grade of 0.23% copper (198,668,000 tonnes) and 1.661 million ounces of gold at an average grade of 0.26 g/t gold.
The Halilaga PEA suggests that conceptually, the project may be viable (within the very preliminary parameters of a PEA) with the commodity price assumptions included therein relative to today's cost environment. The illustrative project would use conventional open pit mining (with an approximate 1:1 strip ratio), and standard milling and flotation processing for recovery of copper and gold. A subsidiary of Teck holds 60% of Halilaga and is project operator. In 2013 we plan to continue strategic studies including economic, metallurgical, hydrological, environmental and engineering analyses to support the conceptual economics and potential of this porphyry project.
The Halilaga PEA is preliminary in nature. The mineral resources used in the Life of Mine plan and economic analysis include 56% Indicated mineral resources, and 44% Inferred mineral resources. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral reserves can only be estimated as a result of an economic evaluation as part of a Pre-Feasibility Study or a Feasibility Study of a mineral project. Accordingly, at the present level of development there are no mineral reserves at Halilaga. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration or Mineral Reserves once economic considerations are applied. Therefore there is no certainty that the production profile concluded in the Halilaga PEA will be realized. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. Moira Smith, Ph.D., P.Geo, Pilot Gold Chief Geologist, is the Company's designated Qualified Person ('QP") for the purposes of National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"), and has reviewed and validated that the scientific or technical information contained in this News Release related to the Halilaga PEA is consistent with that provided by the QPs responsible for the Halilaga PEA, and has verified the technical data disclosed in this document relating to those other projects in which the Company holds an interest. Dr. Smith has consented to the inclusion of the technical information in the form and context in which it appears in this News Release.