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Falco Resources: PEA on Horne 5 gold project pegs posttax NPV of C$667M, IRR of 16%

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Falco Resources: PEA on Horne 5 gold project pegs posttax NPV of C$667M, IRR of 16%

A preliminary economic assessment for Falco Resources Ltd.'s Horne 5 gold project in Quebec indicated a 12-year undergroundmining operation with attractive economics considering the current gold price environment,the company said in a May 9 release.

Assuming a gold price of US$1,250 per ounce, the study pegs abase case after-tax net present value, at a 5% discount rate, of C$667 million andan internal rate of return of 16.0%.

Initial CapEx is estimated at C$905.2 million with payback in4.1 years.

The study envisages an underground mining operation targeting63.8 million tonnes of volcanic-massive sulfide material with an average dilutedgrade of 2.60 g/t of gold equivalent.

Production will average 236,000 ounces per annum, or 3.1 millionounces of gold over the entire mine life including 2.9 million payable ounces withan all-in sustaining cash cost of US$427 per ounce net of byproduct credits.

The project will also produce 23.8 million payable ounces ofsilver, 194 million pounds of payable copper and 807 million pounds of payable zinc.

All-in cost will come in at US$660 per payable ounce.

The project is estimated to generate gross revenue of C$6.8 billionand operating cash flow of C$2.6 billion.

Falco plans to immediately start work on a feasibility studyon the project targeting completion in the first half of 2017. The environmentalimpact assessment is also expected to be completed in the same time.