Atac Resources (TSXV: ATC) has unveiled an updated preliminary economic assessment (PEA) for its Tiger deposit in the Yukon, envisioning a smaller, higher grade operation with better economics compared to a previous PEA completed in 2016.
The new PEA outlines an open-pit operation with a life of seven years (including one year of construction) and average annual production of 45,000 oz. gold. Total production would be 267,000 oz. at an average diluted grade of 3.82 grams gold per tonne, with production peaking at 72,860 oz. gold in the first year of operations. Capital costs are pegged at $110.1 million with a payback period of 1.4 years.
The project’s after-tax net present value is $85.4 million (at a 5% discount rate) and its internal rate of return, 42.6%. That compares with an NPV in the previous study of $75.7 million and an IRR of 28.2%. The updated study used a gold price of US$1,400 per oz. and an exchange rate of US77¢. All-in sustaining costs (AISCs) are projected at US$661 per oz. gold.
Tiger is located at the western end of Atac’s 1,700-sq.-km Rackla project, 55 km northeast of Keno City, in east-central Yukon, and the most advanced of several gold deposits on the property.
“The updated geological model and PEA envision a smaller but higher grade operation than contemplated by the 2016 resource and PEA,” said Graham Downs, president and CEO of Atac. We are very encouraged by the short payback period and high IRR, which are calculated at a base case substantially lower than current gold prices. The updated deposit model has also identified strong high-grade trends which are open along strike and at depth. Tiger’s high grades and margins, coupled with nearby satellite targets, provide a compelling case for advancement.”
The project would be a conventional truck-and-shovel open pit operation, with a 1,500 tonne per day carbon-in-pulp gold processing plant. Year-round operations would be supported by a 68-km tote road connecting the project to the Yukon highway system near Keno.
Atac has also updated resources at the project. Tiger contains a mixture of oxide and sulphide ore in both open pit and underground categories, although only open-pit resources are considered in the PEA.
Total measured and indicated resources (combining both types of ore and mining methods) are 4.5 million tonnes averaging 3.19 grams gold per tonne for 464,000 ounces. Open-pit indicated oxide resources contribute the most ounces at 238,000 oz. gold contained in 2 million tonnes grading 3.74 grams gold and a cut-off grade of 0.75 gram gold.
The company closed at 18¢ per share, down 7.9% on the day. Over the last year, the company’s shares have traded within a 52-range of 18¢ and 32¢.
The junior has 158 million common shares outstanding for a $28-million market capitalization.
— Alisha Hiyate is the Editor in Chief of the Canadian Mining Journal.