Eldorado Gold Corporation - Positive Pre-Feasibility Study On Kisladag Phase I
Vancouver, British Columbia - Monday, May 28, 2001, 8:30 AM EDT
ELD No. 01-07
Eldorado Gold Corporation (TSE, "ELD") is pleased to announce the
results of a positive Pre-Feasibility Study (the "Study") for its
100% owned Kisladag Gold Project located in western Turkey. The
Study has been prepared by Kilborn Engineering Pacific
("Kilborn") in conjunction with Knight Piésold and Micon
International. The Study presents the Phase I development of the
6.7 M oz. Kisladag resource and considers a 3.4 M tonnes per
annum ("tpa") operation based on a limited portion of the
measured and indicated resources. A summary of the highlights of
the study follows in Table 1.
Table 1 Performance Summary
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Plant Throughput 3.4Mtpa
Resources Measured & Indicated
Project Life 11.5 years
Average Annual Production 103,600 ounces
Initial Capital Cost (millions) US $47.4
Cash Operating Costs (US$/oz.) US $154
Internal Rate of Return @ US $300/oz Au 21%
Net Present Value (million) US $300/oz Au
@ 8% discount US $36.3
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The approach taken in the pre-feasibility process has been to
select and detail an initial project, which will provide solid
economic performance with moderate capital requirements. This
approach allows for future expansion and/or extensions of mine
life in a manner which would further increase the recovery of the
Kisladag resource. The project described has been costed based on
an owner-operated fleet of mine equipment with 100% new mining
and plant equipment.
Resources and Reserves
Micon has calculated a geological resource (Measured, Indicated
and Inferred) for Kisladag as previously reported September 29,
2000 and shown in Table 2. The Measured and Indicated resources
only were used for mine design studies and reserve estimation by
Kilborn as presented in Table 3.
Table 2 Geological Resource @ 0.4 g/t Au Cutoff
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Classification Tonnes Grade (g/t) Contained oz. Au
---------------------------------------------------------------
Measured 9,570,000 1.30 401,000
Indicated 116,400,000 1.19 4,446,000
Measured & Indicated 125,970,000 1.20 4,847,000
Inferred 55,470,000 1.02 1,826,000
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Table 3 Mineable Reserves
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Classification Tonnes Grade (g/t) Contained oz. Au
---------------------------------------------------------------
Proven 6,400,000 1.44 297,000
Probable 33,300,000 1.44 1,540,300
Total 39,700,000 1.44 1,837,300
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The resources and reserves have been classified in accordance
with the definitions adopted by the Canadian Institute of Mining
for standards on Mineral Resources and Reserves. The preparation
of both resource and reserve estimates were conducted by
qualified persons as defined by National Instrument 43-101.
Mining and Processing
The Kisladag Phase I Project will be operated as a conventional
open pit, heap leach mine utilizing a loader and truck fleet for
primary production. The mine is scheduled to produce 10,000
tonnes of ore per day, or 3.4 Mt per year. The study defines the
initial phase of development of Kisladag whereby the mine would
provide 3.4 Mtpa for 11.5 years, drawn exclusively from proven
and probable reserves.
The process facilities detailed in the study consists of a
3-stage crushing circuit with conveyor transfer and radial
stacking onto a permanent heap leach pad. Gold will be recovered
through a conventional ADR and Electrowinning Plant with doré
produced on site. Projected gold recoveries are based on column
test results of both oxide and sulphide composites. Laboratory
gold recoveries are typically reduced by 3%-5% in predicting
actual production heap recoveries and Kilborn has reduced the
Kisladag projected recoveries accordingly for this study to 80%
and 57% for oxide and sulphide ore types respectively.
Capital Costs
Initial capital costs for the Phase I Project are estimated to be
US$ 47.4 M comprised of the following:
Table 4 Capital Cost Estimate
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Item US$
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Infrastructure 5,776,000
Process & Heap Leach 17,884,000
Buildings 2,296,000
Waste Dumps 366,000
Mining Equipment 5,438,000
Total Direct Costs 31,760,000
Engineering, Procurement & Construction Management 3,051,000
Indirects 4,382,000
Owners Costs 4,071,000
Contingency 4,113,000
Total Indirect Costs 15,617,000
Total Direct & Indirect Costs 47,377,000
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Mine and plant equipment costs are based on quotations for new
equipment from domestic and foreign suppliers. All costs are
expressed in US dollars without escalation or inflation at an
exchange rate of 675,000 TL = US $1.00, effective January 2001.
Subsequent devaluation of the Turkish Lira to approximately
1,100,000 TL = US $1.00 provides potential for significant
improvement in both capital and operating costs should this trend
continue.
Sustaining mine and plant capital costs over the 11.5 year Phase
I Project life are estimated to be US $6.3 M and US $7.0 M
respectively with the plant capital being mainly attributable to
leach pad extensions.
Operating Costs
Cash operating costs for the Phase I Project are estimated to
average US $154/oz. of refined gold recovered over the life of
the project. The pit designs' low strip ratio (0.49:1) combined
with low labour rates are significant contributors to the low
unit operating costs. Per tonne cash operating costs, including
costs for mining, processing and general and administrative costs
average US $4.50/T of ore as detailed below.
Table 5 Operating Cost Estimate
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Activity US $/tonne Ore
---------------------------------------------------------------
Mining 1.57
Processing 2.51
G&A 0.42
Total 4.50
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Financial Analysis
Based on a US $300 realized gold price, the Phase I Project
produces an internal rate of return ("IRR") after taxes and
royalties of 21% on a 100% equity basis and has a net present
value ("NPV") of US $36.3 M at a discount rate of 8%.
Table 6 Economic Performance
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Gold Price
US$/oz IRR NPV @ 8%
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275 16.0% US$ 20.0 M
300 21.0% US$ 36.3 M
325 25.0% US$ 48.3 M
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The Study concludes that the project economics are more sensitive
to changes in metal prices and less sensitive to similar
percentage changes in capital and operating costs.
Qualified Person
Kilborn Engineering Pacific has prepared the report titled
Kisladag Gold Project, Pre-Feasibility Study in accordance with
the recommendations and guidelines established by National
Instrument 43-101 and under the supervision of a qualified person
as defined in National Instrument 43-101.
Future Development
Eldorado is advancing its plans for further development at
Kisladag through 2001-2002. Included and underway in June 2001
will be the next round of drilling on the Kisladag Project which
will entail:
1) Definition drilling of Kisladag necessary for completion
of the Feasibility Study.
2) Step out drilling to test the extension of the Kisladag
resource, targeted at 10-12 M oz.
3) First drill testing of the Sayacik Anomaly, within the
Kisladag land position.
With the previously granted Site Selection Permit and the
completion of the Baseline Environmental Study at Kisladag, the
Company is now prepared to commence the Environmental Impact
Assessment work. Additional metallurgical testwork is planned to
complete the programme necessary for final feasibility. The
Company's present plan for the development of Kisladag includes
completion of final feasibility by mid 2002.
"Receipt of the Study is a major step forward for our Company's
plan to progressively develop the Kisladag Project", stated Mr.
Paul N. Wright, President and CEO. "The Study strongly
establishes the viability of the first phase development of the
Kisladag Project and provides the base to further develop and
expand the Kisladag Project in addition to exploring our very
prospective adjacent land position. We continue to benefit from
strong community and provincial and central government support in
Turkey for the development of the Kisladag Project. In Turkey as
a whole, we have been encouraged to see the progress made by
Normandy in commencing production at its Ovaçik project. We
believe the permitting regime in Turkey is now comparable with
that in many other countries."
Eldorado Gold Corporation is an international gold mining company
with an extensive background in acquiring, discovering and
developing quality gold assets. The Company's goal is to create
a portfolio of low cost mining assets with a strong financial
base.
ON BEHALF OF
ELDORADO GOLD CORPORATION
/Paul N. Wright/
Paul N. Wright
President and Chief Executive Officer
Certain of the statements made may contain forward-looking
statements which involve known and unknown risk, uncertainties
and other factors which may cause the actual results, performance
or achievements of the Company, or industry results to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. We do not expect to update forward-looking statements
continually as conditions change and you are referred to the full
discussion of risk factors and information associated with the
Kisladag Property and the Company's business contained in the
Company's Prospectus date February 20, 2001 filed with the
securities regulatory authorities.
Eldorado Gold Corporation's shares (Symbol: ELD)
trade on the Toronto Stock Exchange ("TSE")
The TSE has neither approved nor disapproved
the form or content of this release.
Investor Relations Contacts, Michael Beley:
Tel: (604) 687-4018 and 1-888-ELD-8166
Fax: (604) 687-4026 e-mail: info@eldoradogold.com
www.eldoradogold.com
Suite 920 - 1055 West Hastings Street,
Vancouver, British Columbia, Canada V6E 2E9 |
