Orca Gold Revised Feasibility Study Demonstrates Improved Operating Costs and NPV at...

Orca Gold Revised Feasibility Study Demonstrates Improved Operating Costs and NPV at its Block 14 Gold Project in the Republic of the Sudan

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Orca Gold Revised Feasibility Study Demonstrates Improved Operating Costs and NPV at its Block 14 Gold Project in the Republic of the Sudan

VANCOUVER, BC, Sep. 14, 2020 (Canada NewsWire via COMTEX) —

Orca Gold Inc. (TSXV: ORG) (“Orca” or the “Company”) is pleased to announce a Revised Feasibility Study indicating a material improvement in operating costs on the Company’s 70%-owned Block 14 Gold Project in the Republic of the Sudan. The Revised Feasibility Study incorporates updated costs and other economics from the original Feasibility Study released on November 7, 2018.

REVISED FEASIBILITY STUDY HIGHLIGHTS (100% BASIS):

                      Probable Reserves         79.94Mt @ 1.11g/t for 2.85
                                                 Moz

    ---

                      Average Annual
                       production:


                             First 7 Years      5.8Mtpa @ 1.49g/t
                                                 averaging 228,000oz Au/
                                                 year


                      Life of Mine ("LOM")
                                       LOM      167,000oz Au/year

                                       ---

                      Mine Life                 13.6 years

    ---

                      Cash Costs:


                                       LOM

              $676/oz


                         All-in Sustaining
                            Costs ("AISC")

              $751/oz

                                       ---

                      Base Case Gold Price

              $1,350/oz

    ---

                      After-Tax Net
                       Present Value
                       ("NPV")

              $607 million

    Discount rate: 5%

    ---

                      After-Tax Internal
                       Rate of Return
                       ("IRR")                                       33.3%

    ---

                      Payback Period            2.9 years

    ---

                      Pre-Production
                       Capital

              $321 million

    ---

                      Sustaining Capital

              $179 million

    ---

                      FINAL PERMITTING          In Progress

    ---

Note: All amounts stated are in US Dollars. Economic parameters are shown on a 100% basis

“The Revised Feasibility Study clearly demonstrates the improved economics and scope of the proposed development and operation at Block 14 following the early works engineering and selection of LNG to fuel the power station. At a production rate of almost 230,000 ounces of gold per annum for the first seven years, a low production cash cost per ounce and a significant exploration upside, this project stands out on an international scale,” commented Richard P. Clark, Chief Executive Officer of Orca. “With positive political change in Sudan progressing, the Company is confident of securing development financing in the coming months; discussions are ongoing.”

Key Operating Parameters:



               Revised Feasibility

         Feasibility Study
                               Study (Sep 2020)                                  (Nov 2018)



        Milling
         Capacity

                6.0Mtpa
       6.0Mtpa

    ---

        Probable
         Reserves:


          Tonnes (000)                                  79,943                        79,943



        Grade (Au g/t)                                    1.11                          1.11

                   ---

        Mine Life

                13.6 years
       13.6 years

    ---

        LOM:


        Average Annual
            Production
                  (oz)                                 167,000                       167,000



          Recovery (%)                                     82                            82



            Cash Costs
                ($/oz)                                     676                           707



           AISC ($/oz)                                     751                           783



           Strip Ratio

                1.49:1
       1.49:1

                   ---

        Years 1-7:


        Average Annual
            Production
                  (oz)                                 228,000                       228,000



           Grade (g/t)                                    1.49                          1.49



            Cash Costs
                ($/oz)                                     673                           697



           AISC ($/oz)                                     759                           792

                   ---

Note: All amounts stated are in US Dollars. Economic parameters are shown on a 100% basis.

Mineral Resources:



                Mineral Resource Statement - September 19, 2018

                                                    ---

        Classification

       Tonnes (million)                            Grade (g/t Au)

     Contained Ounces (000)

    ---

        Indicated                         79.9                                      1.30                             3,342

    ---

        Inferred                          18.5                                       1.2                               711

    ---

1. CIM Definition Standards were followed for the classification of Mineral Resources2. Mineral Resources are inclusive of Mineral Reserves3. Mineral Resources are reported above a cut-off grade of 0.6g/t

Technical Report

The results of the Revised Feasibility Study will be published in a Technical Report prepared pursuant to Canadian Securities Administrators’ National Instrument 43-101 which can be viewed on the Company’s website at www.orcagold.com and posted under the Company’s profile on SEDAR (www.sedar.com) today.

FEASIBILITY STUDY DETAIL:

Mineral Reserves:



                Mineral Reserve Statement - November 7, 2018

                                                    ---

        Classification

       Tonnes (million)                            Grade (g/t Au)

     Contained Ounces (000)

    ---

        Probable Reserves                  79.943                                      1.11                            2,853

    ---

1. CIM Definition Standards were followed for the classification of Mineral Reserves2. Mineral Reserves were optimised using a gold price of $1,100.3. Mining Cut-off grades vary between 0.32g/t and 0.90g/t

Capital Costs:

Pre-production capital costs are estimated at $321 ($328 Nov ’18) million including $34 ($36 Nov ’18) million in contingency and $179 ($181 Nov ’18) million for LOM Sustaining Capital.

The construction period is estimated at 27 months. The pipeline and generator supply fall on the critical path.

                                   September 2020          November 2018





             Pre-Production            Sustaining

             Pre-Production    Sustaining
                           Capital                 Capital                    Capital                          Capital



        Mine                                    15                                                  15

    ---

        Process Plant                          169                     35                           164                35

    ---

        Generator                                7                     63                             4                66

    ---

        Water Pipeline                          12                                                  26

    ---

        TSF                                     17                     54                            17                54

    ---

        Camp                                     3                     14                             3                14

    ---

        Infrastructure                          12                                                  12

    ---

        EPCM                                    27                                                  31

    ---

        Owner                                   25                                                  21

    ---

        Closure                                                       13                                             12

    ---

        Contingency                             34                                                  36

    ===

        Total                                  321                    179                           328               181

    ---

Generator and camp will be financed via BOOT contracts.

Mining and Processing:

The preferred mining option for Block 14 is a conventional truck and shovel open pit operation feeding a mineral processing circuit incorporating primary crushing, SAG and Ball mill grinding followed by carbon-in-pulp leaching, stripping and electrowinning.

Pre-production will enable the training of the mining crews and is estimated to produce 0.90Mt of waste stripping and 0.35Mt of ore, which will be stockpiled. The mining will be completed in eight years at an average mining rate of 22Mtpa. A low-grade stockpile (average 0.71g/t) will be created which enables processing of higher grade ore for the first 7 years of the mine life with an average grade of 1.49g/t. The stockpiled ore will be treated over the last 6.6 years.

77.3MT @ 1.07g/t will be mined from the GSS group of pits adjacent the processing plant. 2.6Mt @ 2.36g/t will be mined from the Wadi Doum satellite deposit and trucked 65km to the processing plant during the first five years of the mine life.

Operating costs are based on assumed fuel prices of $0.60/l ($0.70/l – Nov ’18) for diesel and LNG price $9.70/MMTU delivered to site ($0.525/l for HFO380 – Nov ’18). LOM power costs used equate to $0.1083/kWhr ($0.136/kWhr – Nov ’18).

All-in Sustaining Costs:

                                     September 2020     November 2018



                                       LOM ($/oz)

     LOM ($/tonne)  LOM ($/oz)

     LOM ($/tonne)





     Mining                                233               6.81          237                 6.94

    ---



     SP Re-handle                           15               0.44           15                 0.44

    ---



     Processing                            279               8.16          311                 9.12

    ---



     G & A                                  59               1.71           59                 1.72

    ---



     Refining                                6               0.18            6                 0.18

    ---



     Silver Credit                        (10)            (0.29)         (9)              (0.26)

    ---



     Royalties                           95(2)               2.77        88(3)                 2.57

    ---



     Total Cash Costs                      676              19.78          707                20.69

    ---



     Sustaining Capital                     71               2.08           72                 2.11

    ---



     Closure                                 4               0.13            4                 0.12

    ---



     All-in Sustaining Costs(1)            751              21.99          783                22.92

    ---

1. Quoted All-in Sustaining Costs are presented as defined by the World Gold Council and include Total Cash Costs, G&A, Sustaining Capital and Closure Costs.2. Gold Price $1,3503. Gold Price $1,250

Production Profile:

                             Total  -1     1     2     3     4     5     6     7     8     9   10   11   12   13   14



        Mined
       Mt    79.9  0.4   7.5   9.8   9.9  10.3  12.2  12.2  13.1   4.6

    ---

        Grade
       Au g/t  1.11 1.38  1.10  1.08  1.13  1.14  1.15  1.06  1.08  1.18

    ---



        Processed
       Mt    79.9       4.8   5.8   6.0   6.0   6.0   6.0   6.0   6.0   6.0  6.0  6.0  6.0  6.0  3.3

    ---

        Grade
       Au g/t  1.11      1.43  1.44  1.45  1.51  1.64  1.48  1.49  1.14  0.74 0.68 0.68 0.62 0.55 0.49

    ---



        Recovered
       Au koz 2,341       193   229   230   235   251   227   232   175   116  109  109  100   89   47

    ---


       Ag koz 1,195        26    79   122   164   168   129   124   100    60   69   68   53   27    6



Gold Price Sensitivity Analysis:

                                     Low   Base  3-Yr Trailing

           Spot
                                                                     (31/08/2020)



        Gold Price         ($/oz)  1,250   1,350           1,410               1,950

    ---

        Post Tax NPV 5% ($M)         467     607             691               1,445

    ---

        Post Tax IRR          (%) 27.5%  33.3%          36.8%              66.0%

    ---

        Cash Cost          ($/oz)    669     676             679                 713

    ---

        AISC
         ($/oz)                      745     751             755                 789

    ---

The Feasibility Study was completed by Lycopodium Minerals Pty Limited, Australia, with inputs from discipline specific Qualified Persons (QPs). The QPs are independent and have reviewed and approved this news release. The areas of responsibility for each QP involved in preparing the Revised Feasibility Study are:

Project Manager QP

Study Manager: Dr. Geoff Duckworth: Lycopodium Minerals Pty. Ltd.

Discipline Specific QPs:

Mineral Resource: Nicholas Johnson: Consulting Geologist, MPR Geological Consultants Pty Ltd.Mining: Chris Reardon: Country Manager, Orca Gold (previously Consultant, Deswik Europe Ltd.)Metallurgy: Mike Hallewell: Consultant, MPH Minerals Consultancy Ltd.Hydrogeology: Pieter Labuschagne: Consultant, GCS (Pty) Ltd.Environment: Carl Nicholas: Consultant, Mineesia Ltd.

On behalf of the Board of Directors,

“Richard P. Clark”

Richard P. Clark | CEO & Director | Orca Gold Inc. | 604.689.7842

ABOUT ORCA GOLD INC.

Orca Gold Inc. (TSXV: ORG) is a Canadian resource company focused on exploration and development opportunities in Africa. Led by a board of directors made up of industry experts and a management team with a track record of discovering and building significant mines globally, Orca is developing one of the leading gold projects in Africa. The Company is currently focused on its 70%-owned Block 14 Gold Project in the Republic of the Sudan on which a Feasibility Study was completed in November 2018 and updated on September 14, 2020.

The technical contents of this release have been approved by Kevin Ross, BSc, MBA, a Qualified Person pursuant to National Instrument 43-101. Mr. Ross is the Chief Operating Officer of the Company, a European Engineer and a Member of the Institute of Materials, Minerals and Mining.

The Mineral Resource estimate was carried out by Nicholas Johnson of MPR Geological Consultants of Perth, Western Australia who is considered to be independent of Orca Gold Inc. Mr. Johnson is a member in good standing of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the commodity, style of mineralization under consideration and activity which he is undertaking to qualify as a Qualified Person under National Instrument 43-101. Mr. Johnson consents to the inclusion in this press release of the information, in the form and context in which it appears. Samples used for the results described herein are prepared and analyzed by fire assay using a 50 gram charge at the ALS Chemex facility at Rosia Montana in Romania in compliance with industry standards. Field duplicate samples were taken and blanks and standards are added to every batch submitted.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This press release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws, including statements regarding Orca’s (the “Company”, the “Corporation”, “we” or “our”) plans and expectations relating to the Block 14 project (“Block 14”) in northern Sudan and the Revised Feasibility Study (“RFS”). These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning mineral resource estimates may also be deemed to constitute “forward-looking statements” to the extent that they involve estimates of the mineralization that will be encountered if the property is developed. The assumptions, risk and uncertainties outlined below are non-exhaustive. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of the Corporation, or industry results, may vary materially from those described in this presentation.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Forward-looking statements and forward-looking information are not guarantees of future performance and are based upon a number of estimates and assumptions of management at the date the statements are made including without limitation, assumptions about the following (the “Forward-Looking Factors”): future prices of gold and other metals; successful exploration, development, and production of Block 14; the timing and completion of the RFS; performance of contractual obligations by counterparties; operating conditions; political stability; obtaining governmental approvals and financing on time; financial projections and budgets; obtaining licenses and permits; government regulation of the Corporation’s mining activities; environmental risks and expenses; market conditions; the securities market; price volatility of the Corporation’s securities; currency exchange rates; foreign mining tax regimes; insurance and uninsured risks; financial projections and results; competition; availability of sufficient capital, infrastructure, equipment and labour; dependence on key personnel; dependence on outside parties; conflicts of interest; litigation; land title issues; local community issues; estimation of mineral resources; realization of mineral resources; timing and amount of estimated future production; the life of Block 14; reclamation obligations; changes in project parameters as plans continue to be evaluated; and anticipated costs and expenditures and our ability to achieve the Corporation’s goals. While we consider these assumptions to be reasonable, the assumptions are inherently subject to significant business, social, economic, political, regulatory, competitive and other risks and uncertainties, contingencies, many of which are based on factors and events that are not within the control of the Corporation and there is no assurance they will prove to be correct.

Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation known and unknown risks, uncertainties and other factors relating to the Forward-Looking Factors above, and those factors disclosed under the heading “Risk Factors” in the Corporation’s documents filed from time to time with the securities regulators in the provinces of Canada.

In addition, a number of other factors could cause the actual results, performance or achievements of the Corporation to differ materially from any future results, performance or achievements expressed or implied by the forward-looking information, and there is no assurance that the actual results, performance or achievements of the Corporation will be consistent with them. For further details, reference is made to the risk factors discussed or referred to in the Corporation’s annual and interim management’s discussion and analyses on file with the Canadian securities regulatory authorities and available electronically on the SEDAR website at www.sedar.com. Although the Corporation has attempted to identify important factors that could cause actual actions, events, results, performance or achievements to differ materially from those described in forward-looking statements and forward-looking information, there may be other factors that cause actions, events, results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Such forward-looking statements and information are made or given as at the date of this presentation and the Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under applicable securities law. The reader is cautioned not to place undue reliance on forward-looking statements or forward-looking information.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Orca Gold Inc.

View original content to download multimedia: http://www.newswire.ca/en/releases/archive/September2020/14/c2932.html

SOURCE: Orca Gold Inc.

Elina Chow, Investor Relations, Catch Advisory Group Inc., 416.845.8495,
info@orcagold.com

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