LAVAL, CANADA — (Marketwired) — 04/09/13 — Editors- Note: There are two maps associated with this press release.
TYPHOON EXPLORATION INC. (TSX VENTURE: TYP) is pleased to report results of a positive Preliminary Economic Assessment study done on the Fayolle Deposit, located 30km of the town of Rouyn-Noranda, Quebec.
The PEA study was prepared by InnovExplo with contributions from SNC-Lavalin with respect to chapter 20, „Environmental Studies, Permitting and Social or Community Impact“. The PEA was prepared with the objective to compare two (2) distinct and independent scenarios, the open pit approach versus an underground mining approach, all in accordance with Standards of Disclosure for Mineral Projects defined by National Instrument 43-101 („NI 43-101“).
„The report indicates an economic potential to recover 74,813 oz. of gold from an open pit including resources amenable to mining of 568,941 tonnes at 4.35 grams per tonne“, noted Mr. David Mc Donald, President of Typhoon Exploration Inc.
The Preliminary Economic Assessment study of the Fayolle Deposit, based on a 43-101-compliant technical report, will be filed on the Company-s website and on SEDAR within 45 days.
HIGHLIGHTS (open pit scenario)
For the open pit scenario, the PEA study shows potential viability for 568,941 tonnes of diluted resources at 4.35 g/t gold (representing 74,813 ounces of recovered gold) at a minimum cut-off grade of 0.84 g/t gold. This open pit mineralized material was obtained from a global undiluted mineral resource of 1,814,800 tonnes at 2.68 g/t gold (representing 156,497 ounces of gold) at a similar minimum cut-off grade of 0.84 g/t gold.
The study includes 100% of reclamation costs at the beginning of the project.
The pre-production capital costs, sustaining, and reclamation costs for the Fayolle Deposit open pit option are evaluated respectively at CAD$4.96 M, CAD$ 0.93 M and CAD$4.4 M. The average cash cost is estimated at US$697 per ounce of gold or $ 92 per tonne milled. The financial analysis, using a price of gold of US$1,518 per ounce, indicates a pre-tax net present value („NPV“) (using a 7% discount rate) of CAD$30.15 million with a pre-tax internal rate of return („IRR“) of 166%. On an after tax basis, the IRR is estimated at 110%.
HIGHLIGHTS (Underground scenario)
For the underground scenario, the PEA study shows potential viability for 449,426 tonnes of diluted resources at 4.73 g/t gold (representing 64,195 ounces of recovered gold) at a minimum cut-off grade of 2.5 g/t gold. This underground mineralized material was obtained from a global undiluted mineral resource of 548,500 tonnes at 5.75 g/t gold (representing 101,399 ounces of gold) at the same minimum cut-off grade of 2.5 g/t gold.
The pre-production capital costs and sustaining costs for the Fayolle Deposit underground project are evaluated at CAD$22.7 M. The average cash cost is estimated at US$1205 per ounce of gold and $173 per tonne milled. The financial analysis, using a price of gold of US$1,518 per ounce, indicates a pre-tax net present value („NPV“) (using a 7% discount rate) of CAD$5.61 million with a pre-tax internal rate of return („IRR“) of 26.21%. On an after tax basis, the IRR is estimated at 19.12%.
PROPOSED SURFACE INFRASTRUCTURE
The proposed mine infrastructure presents similar characteristics for both underground and surface options. Overall, an area of approximately 0.6 km2 of ground will be impacted by the mining activity.
MINE CLOSURE AND RECLAMATION
The closure and reclamation costs for the Fayolle Deposit are estimated at CAD$1.7 M for the underground option and CAD$4.4 M for the open pit option. A detailed closure plan will have to be submitted with the feasibility study. Wherever practical, a progressive reclamation approach of the mining site will be done.
CAPITAL COSTS ESTIMATES
This PEA is based on current budgetary prices coming from contractors acting within the Abitibi region. In addition to InnovExplo-s technical expertise to evaluate the two potential scenarios, this evaluation is also based on other reliable information. The evaluation of custom milling was provided by Iamgold, Westwood Project. The after-tax cash flow estimation was completed by Samson Belair/Deloitte & Touche.
ADDITIONAL TECHNICAL INFORMATION RELATED TO THE PRELIMINARY ECONOMIC ASSESSMENT
The Fayolle property is composed of 39 claims covering 1,475.15 hectares 100%-owned by Typhoon and subject to an earn-in agreement with Aurizon Mines.
GEOLOGY
Gold mineralization of the Fayolle Zone is mainly contained in deformed komatiitic rocks and altered intermediate intrusions near the contact with massive basalt and silicified sediments. Shear zones and fault patterns observed are generally oriented west to north-west, corresponding to a major inflexion of the La Pause Fault.
The dense and complex dykes swarm is characterized by changing orientation and perceived as a strong favourability indicator for gold mineralization.
Mineralization is part of a stacking of pluri-metric zones located inside a 50 to 100 metre wide favourable structural envelope, plunging moderately towards the east. Visually, this mineralized structure corresponds to tectonic breccias. The grades can generally be correlated with the intensity and complexity of brecciation. Alteration is characterized by carbonates, chlorite and fuchsite in ultramafic rocks and by albite-hematite in dykes. Gold is mostly observed as free grains up to a millimetre in size in both host rocks.
MINERAL RESOURCES
The updated mineral resource estimate integrates the results of all the drill programs on the Fayolle deposit since the mineral resource estimate prepared by InnovExplo Inc. published on October 9, 2012. A total of 253 surface holes and 68,826 metres are included in the updated mineral resource estimate, of which 92 holes and 30,927 metres have been drilled since May 2010, when Aurizon and Typhoon Exploration Inc. („Typhoon“) first entered into an exploration joint venture on the Fayolle Project.
All of the updated mineral resources are in the Indicated mineral resource category. Different capping grades have been applied, and are referenced on the resource table on the following page.
NOTES:
METALLURGICAL TESTWORK
As the gold can be found in two different types of rocks, two gold-bearing composite samples were examined by SGS Mineral Services: a Komatiite composite, containing an assay grade of 7.78 grams of gold per tonne and an intrusive composite, containing an assay grade of 4.59 grams of gold per tonne. After 48 hours, gold recoveries ranged from 94% to 97% for both composites. Finer grinding typically increased the gold recovery at the cost of higher cyanide consumption.
Gravity separation testing on the Komatiite composite showed a 27.3% Gravity Recoverable Gold („GRG“). Gravity separation testing on the Intrusive composite showed a 41.4% GRG. The combination of gravity recovery and cyanidation of the gravity tail did increase the overall gold recovery by 1-3%. This demonstrates that this concept would be beneficial from a plant design and financial perspective.
Bond ball mill testing indicated that the two composites fell in the medium range of hardness compared to the SGS database (12.0-14.1 kWh/t).
AGREEMENT WITH AURIZON MINES LTD.:
Typhoon Exploration Inc. signed an option agreement with Aurizon Mines Ltd., for the development of its Fayolle gold property (100%-owned by Typhoon), located in the heart of Abitibi-s mining projects. Pursuant to the Agreement, Aurizon has the option to acquire up to a 65% interest in the Fayolle Project by incurring total expenditures of (CAD) $25 M and by subscribing for common shares of the Corporation for gross proceeds of (CAD) $2 M. To date, Aurizon Mines Ltd. have invested CAD$9,003,825 in exploration expenditures and have subscribed to 3 private placements of CAD$500,000 each, totaling CAD$1,500,000.
ABOUT TYPHOON EXPLORATION INC.
THE COMPANY OWNS THE FOLLOWING PROJECTS:
For more information, visit SEDAR-s website at or the company-s website at
QUALIFIED PERSON
Mr. Daniel Gaudreault, P. Eng., Geol. (OIQ No. 39834), of Geologica Groupe-Conseil, is the Qualified Person as defined by NI 43-101, to supervise the preparation of this press release.
The Independent and Qualified Persons for the PEA, as such terms are defined by NI 43-101, are Sylvie Poirier, Eng. (OIQ 112196), Alain Tremblay, Eng. (OIQ107489) and Alain Carrier, M.SC., P.Geo. (OGQ no.281) of InnovExplo Inc. and Denis Isabel FEC, PhD, Eng. (OIQ no. 36006) of SNC-Lavalin Inc. (chapter 20, „Environmental Studies, Permitting and Social or Community Impact“).
The common shares of Typhoon Exploration Inc. are listed on the TSX Venture Exchange under the symbol „TYP“.
Forward-Looking Statements
This news release contains statements that constitute „forward-looking information“ or „forward-looking statements“ within the meaning of applicable securities legislation. This forward-looking information is subject to numerous risks and uncertainties, certain of which are beyond the control of Typhoon. Actual results or achievements may differ materially from those expressed in, or implied by, this forward-looking information. No assurance can be given that any events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that Typhoon will derive therefrom. Forward-looking information is based on the estimates and opinions of Typhoon at the time the information is released and Typhoon does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Neither 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.
To view the two maps associated with this press release, please visit the following links:
Contacts: David Mc Donald President and CEO 450.622.4066 Toll free: 1.877.622.4004 450.622.4337 (FAX)
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