MIRAMAR MINING & HOPE BAY GOLD ANNOUNCE DEVELOPMENT PLAN FOR HOPE BAY PROJECT
VANCOUVER, British Columbia - February 08, 2002
- Proposal To Develop Initial Mine Based On High Grade Doris Hinge Zone
-
Miramar Mining Corporation (TSE:MAE)(OTC BB:MAENF) and Hope Bay Gold
Corporation (TSE:HGC) today announced the results of a preliminary
assessment or scoping study that outlines a proposed initial development plan
for the high grade Doris Hinge Zone at the Hope Bay project in Nunavut,
Canada.
"We believe that the proposed development of an initial operation at
the Doris Hinge Zone marks an important milestone in the advancement of
the Hope Bay project," said Tony Walsh, Miramar's President & CEO. "The
development of the Doris Hinge Zone offers the potential for high
grade, high return, and low risk gold production on an accelerated basis.
Further, the development of a relatively small scale operation at Hope
Bay could allow expedited production at a capital cost potentially
within reach of the Joint Venture's financial resources and could generate
significant cash flow at current gold prices to continue the exploration
and development of the Hope Bay belt."
Scoping Study
In 2001, the Hope Bay Joint Venture commissioned a preliminary
assessment, or scoping study, (the "Study") that was undertaken by independent
consultants SRK Consulting in conjunction with Bateman Engineering and
Nuna Logistics. Dr. Christopher Page, P.Eng. of SRK Consulting is the
Qualified Person responsible for the Study in the context of National
Instrument 43-101. The Study is based on SRK's review of existing
project files prepared for or by the Hope Bay Joint Venture, estimates of
mineral resources prepared by the Hope Bay Joint Venture, estimates of
open pit mining manpower, mining costs, and production schedule prepared
by contractor, Nuna Logistics, along with in-house data and estimates
prepared by SRK Consulting. Dr. Page has not personally visited the
project site.
This Study includes an economic evaluation that uses inferred mineral
resources and is preliminary in nature. Approximately 25% of the
resources utilized in the Study are inferred mineral resources that are
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral
reserves, and there is no certainty that the results of the Study will be
realized. No resources are converted to mineral reserves as a result of
this Study since it is not a feasibility study. If a decision is made to
build a mine, the joint venture would require additional financing.
In compliance with National Instrument 43-101, the results of the Study
are detailed in a technical report that will be available at
www.sedar.com for review.
Preferred Scenario
The Hope Bay Joint Venture initially considered a variety of options
for the development of the Hope Bay belt. However, it soon became
apparent that the stand alone development of the high grade, near surface
Doris Hinge Zone provided a compelling scenario for a low capital cost,
rapid payback operation that could generate significant cash flow to
continue the exploration and development of the Hope Bay belt. The minimal
disturbance resulting from this small scale development scenario would
minimize impact issues which in turn should also simplify the
permitting process. As a result, the Study focuses solely on the development of
the Doris Hinge Zone.
Doris Hinge Development Scenario
Assuming the project proceeds as contemplated in the Study, the
development of the Doris Hinge Zone would commence with a small open pit
followed by ramp access and underground mining of the majority of the Doris
Hinge Zone resources plus limited amounts of the Central and Lakeshore
veins in the limbs of the Doris Hinge Zone. In addition, approximately
9,000 tonnes of higher-grade material stockpiled at the Boston deposit
would be hauled to the mill for processing. The Boston camp (at the
south of the belt) would be moved to the Doris in the north and the
Boston site cleaned up to reduce its current level of bonding. These
actions would not prevent the later development of the Boston deposit.
Due to the relatively large dimensions and good geological continuity
of the Doris Hinge Zone, underground mining would be by lower cost room
and pillar methods. To minimize capital costs, mining and ore haulage
is proposed to be undertaken by a contractor. Ore would be delivered
to a crusher located adjacent to the portal that would feed a modular
mill pre-constructed off site. Due to the modularized nature of the
mill, it would require no foundations but would be set on bedrock and
covered with a sprung structure similar to those used at a number of other
arctic locations. The ore would undergo conventional crushing and
grinding with an integrated gravity gold recovery circuit followed by
flotation and cyanidation, with gold dore produced on site.
Principal Parameters
The principal parameters and assumptions related to the development of
the Doris Hinge Zone are as set out below.
Summary of Preliminary Assessment on Doris Hinge Zone, Hope Bay Project
-----------------------------------------------------------------------
Assumptions
-----------
Gold price (US$/oz) $260 $280 $300
---- ---- ----
Exchange Rate
(C$/US$) 1.57 1.57 1.57
Gold Price (C$/oz) $408 $440 $471
Sources of Mill Feed
--------------------
Production Open Pit Underground Stockpile
---------- -------- ----------- ---------
Ore Milled(tonnes)(x)(x) 471,600 82,500 380,100 9,000
Daily Throughput
(tonnes/day) 600
Operating Life (years) 2.1
Diluted Grade
(g/t gold) 18.5 12.1 19.9 17.7
Metallurgical
Recovery (%) 97%
Total Gold
Recovered
in 2.1 years (oz) 271,724
Cash Operating Cost (US$/oz) $114
Total Cost (US$/oz) $177
Capital Costs
(C$000's) (26,685)(26,685)(26,685)
Net Pre-Tax
Cash Flow(x)
(C$000's) 36,408 44,786 53,165
NPV @ 5% Discount
Rate(x)(C$000's) 29,845 37,215 44,584
Pre-Tax Rate of
Return on
Investment 68.89% 85.2% 101.9%
Payback Period(x)
(months) 15 13 12
(x)100% equity basis, pre-tax but after operating costs, capital costs
and an assumed 1.8% royalty (the minimum royalty payable to the NTI,
an Inuit Corporation).
(x)(x) Of the tonnage considered in the Study, approximately 75% are
indicated mineral resources and 25% are inferred mineral
resources.
Waste rock would largely be used for civil construction projects such
as an access road to a barge off-loading area on the coast 3.7km to the
north, an airstrip, and for tailings dam construction. Tailings are
proposed to be deposited sub-aqueously in a small lake to the east of the
Doris Hinge Zone, locally known as Tails Lake. The majority of these
contemplated activities are primarily located on land which the Inuit
retain both surface and sub-surface rights.
As contemplated in the Study, all equipment, bulk supplies and
materials would be moved to site by barge from Hay River. Other supplies and
personnel will be transported to and from site by aircraft. It is
anticipated that up to 96 personnel would be employed on site on a fly in,
fly out basis, with hiring from Yellowknife and from the local
communities of Cambridge Bay, Taloyaok, Gjoa Haven and Bathurst Inlet in the
West Kitikmeot region.
"The potential development of a mine based on the Doris Hinge Zone
would be the first new mine developed in Nunavut since the Territory's
creation in 1999," said Mr. Fennell, Hope Bay's Chairman & CEO.
"Therefore, we believe this study not only represents an important milestone for
the Hope Bay Joint Venture, but a significant opportunity in Nunavut's
efforts to encourage mining in the North. We look forward to working
with the various stakeholders in Nunavut affected by this project and
believe this could be the beginning of a productive relationship built
around the Hope Bay belt," he said.
Opportunities
The Study is based solely on mining the Doris Hinge Zone and four
blocks of the Lakeshore and Central veins in the immediate vicinity of the
Doris Hinge Zone. A number of additional opportunities have been
identified that could provide potential enhancements to the scenario detailed
in the Study. These opportunities include possible extensions to the
Doris Hinge Zone to the north (where drilling suggests some limited
potential for resource additions) and reduced dilution once in fill
drilling is completed and mining shapes are more tightly constrained.
However, a more significant opportunity is for potential extensions to the
mine life through the development and mining of resources in the balance
of the Doris deposit, primarily in the Doris Connector and Doris Central
areas. These deposits could be developed with minimal additional
surface disturbance and with limited capital, utilizing the same
infrastructure proposed for the Doris Hinge Zone. The mill and facilities are
designed for a 10-year life and therefore allow for an extension of
operations beyond the two year life of the Doris Hinge Zone.
Resources for the Doris deposit and other areas at Hope Bay were
detailed in a news release dated January 15, 2002. Prior to inclusion of the
Doris Connector and Doris Central areas into a mining scenario,
additional in fill drilling would be required to define a mineral reserve. An
exploration decline is contemplated from the Doris Hinge Zone portal
south to Doris Central to allow detailed underground drilling of these
areas, and additional exploration along this prospective trend, a
significant section of which lies under the lake.
2002 Work Plan & Budget
The Study has been submitted to the Joint Venture partners for their
consideration. Work plans and budgets for 2002 are now being finalized
and will be announced shortly. It is anticipated that these plans will
include a work program to advance the Doris Hinge Zone through
completion of a feasibility study, to initiate the formal permitting process
and to continue the exploration of the Hope Bay belt.
Hope Bay Project
Miramar Mining Corporation, through its wholly owned subsidiary Miramar
Hope Bay Ltd., and Hope Bay Gold Corporation Inc. are in a 50-50 joint
venture at Hope Bay and control virtually the entire 80km long Hope Bay
Archean greenstone belt.
Quality Assurance/Quality Control
Christopher Page, P.Eng. of SRK Consulting is the Qualified Person
responsible for the Study in the context of National Instrument 43-101.
Dean McDonald, P.Geo. Ph.D., Exploration Manager with Miramar Mining
Corporation, is the Qualified Person responsible for the geologic and
resource aspects of Hope Bay project in the context of National Instrument
43-101.
Additional Information
Maps and diagrams detailing some of the matters described herein are
attached to this news release. If you are missing these illustrations,
please download this news release from Miramar Mining's or Hope Bay
Gold's websites at miramarmining.com or www.hbgold.com/, to
which they are attached, or contact us at the numbers listed below. All
other information previously released on the Hope Bay Project, including
the recently announced resource estimates, are also available on these
websites.
Forward Looking Statements
Statements relating to planned work at the Hope Bay project and the
expected results of this work are forward-looking statements within the
meaning of the United States Private Securities Litigation Reform Act of
1995. Forward looking statements are statements that are not
historical facts and are generally, but not always identified by the words
"expects," "anticipates," "believes," "intends," "estimates," 'projects"
and similar expressions, or that events or conditions "will," "may,"
"could" or "should" occur. Information inferred from the interpretation of
drilling results and information concerning mineral resource estimates
may also be deemed to be forward looking statements, as it constitutes
a prediction of what might be found to be present when and if a project
is actually developed. These forward-looking statements are subject to
a variety of risks and uncertainties which could cause actual events or
results to differ materially from those reflected in the
forward-looking statements, including, without limitation: uncertainties related to
raising sufficient financing to fund the planned work in a timely manner
and on acceptable terms; uncertainties related to the accuracy of the
assumptions made in the principal parameters related to the development
of the Doris Hinge Zone; changes in planned work resulting from
weather, logistical, technical or other factors; the results of work not
fulfilling expectations and not realizing perceived potential; uncertainties
involved in the interpretation of drilling results and other tests;
uncertainty as to the ability of Hope Bay to achieve the goals and satisfy
the assumptions of management; that additional work may not support a
feasibility study; risks related to fluctuations in gold prices; that
capital and operating costs may be higher than currently estimated and
may preclude commercial development; accidents, equipment breakdowns and
labour disputes or other unanticipated difficulties or interruptions;
the possibility of cost overruns or unanticipated expenses in the work
program and other risks and uncertainties, including those described in
the Miramar's Annual Report on Form 20-F for the year ended December
31, 2000 and Reports on Form 6-K filed with the Securities and Exchange
Commission and Hope Bay Gold's Annual Information Form ("AIF") filed
with the Ontario Securities Commission, the Quebec Securities Commission,
and other regulatory authorities, respectively.
All resource estimates reported in this disclosure are calculated in
accordance with the Canadian National Instrument 43-101 and the Canadian
Institute of Mining and Metallurgy Classification system. These
standards differ significantly from the requirements of the United States
Securities and Exchange Commission, and resource information reported in
this disclosure may not be comparable to similar information reported by
United States companies. The terms "Resource(s)" does not equate to
"reserves" and normally may not be included in documents filed with the
Securities and Exchange Commission. "Resources" are sometimes referred to
as "mineralization" or "mineral deposits".
This news release has been authorized by the undersigned on behalf of
Miramar Mining Corporation and Hope Bay Gold Corporation Inc.,
respectively.
CONTACT: Miramar Mining Corporation
Anthony P. Walsh
President & CEO
(604) 985-2572 or 1-800-663-8780
(604) 980-0731 (fax)
info@miramarmining.com
or
Hope Bay Gold Corporation Inc.
David Fennell
Chairman & CEO
(450) 677-2585
(450) 677-2601 info@hbgold.com
Copyright 2001 The Globe and Mail |
