Opportunities in the New PEA and Mineral Resource Estimate
The Company has identified several opportunities in the New PEA and updated mineral resource estimate to improve upon the economics of the project.
The Rubicon exploration team and SRK have invested a considerable amount of effort into improving the geological model and the boundaries for the mineralized zones that form the basis of the updated mineral resource estimate. The Company has identified numerous areas adjacent to the reported mineral resource blocks where, although drill holes are present with elevated gold grades, drill hole density is insufficient to satisfy the mineral resource criteria as applied by SRK. The Company believes these areas represent opportunities to expand the current mineral resource.
The deposit is also open on strike and at depth. Additional exploration could potentially add more ounces to the financial model, which would improve the project economics. Improved economics may support a new high capacity circular concrete shaft capable of reaching greater depths than contemplated in the New PEA.
The economic model is very sensitive to grade. A small increase in grade would be very significant (as Table 15 shows, a 10% increase in grade leads to a 29.8% increase in after-tax NPV in the base case). The Company regards the criteria applied by SRK to the mineral resource model as conservative given that the initial bulk samples returned grades higher than those reported by SRK in the current block model (please see Table 10 in this release). Accordingly, the Company believes there are further potential upside opportunities with respect to grade.
The Alimak horizontal breasting, longhole stoping method should be investigated for possible reduction in operating costs. This method has the potential to reduce or eliminate a portion of the operating sublevel development and, as result, increase projected productivity by improving stope cycle time.
Tailings Management Facility ("TMF")
The TMF incorporates engineered features to manage the chemical and physical stability of the deposited tailings in accordance with current best-in-class practices. Approximately 50% of the tailings will be converted to paste fill and deposited underground to minimize the amount of tailings that will be deposited on surface and also to provide a suitable backfill for the underground mine. The remaining tailings will be thickened prior to deposition in the TMF. The TMF can accommodate the tailings generated by the proposed mine plan in the New PEA, with engineering studies planned to gather empirical data and evaluate further expansion.
Closure and Rehabilitation Costs
Rehabilitation measures have been designed using a precautionary approach to ensure the long-term physical and chemical stability of the site in accordance with Ontario's Mining Act and the associated Aboriginal consultation process. The rehabilitation measures are intended to return the site to a productive land use that will not require long-term care and maintenance. The rehabilitation cost is estimated to be equivalent to the salvage value of material site assets at closure.
Permitting and Consultation
The Company has been granted the material permits required for an average production rate of 1,250 tpd and is evaluating the permit amendments required for the increased projected production rate. The increased production rate contemplated in the New PEA will not increase the surface area of the site, simplifying the permit amendments and associated consultation process.
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