Preliminary Economic Assessment (PEA) Summary
The PEA was initiated in early 2021 and was produced by a team of independent consultants that possess extensive expertise in their respective fields. Further details on the contributors can be found in the Qualified Persons section of the news release, dated July 28, 2021.
All amounts are in United States dollars unless otherwise specified. Base case economics were calculated using a gold price of $1,600 per ounce and a silver price of $21.00 per ounce. All figures are displayed on a 100% ownership basis. The effective date of the PEA is July 28, 2021 and a technical report for the Project including the PEA will be filed on the System for Electronic Document Analysis and Retrieval within 45 days of this news release.
The PEA’s highlights include the following estimates:
- Life of mine (“LOM”) average annual payable production of 187 koz gold and 758 koz silver
- 12-year mine life with a 25 ktpd processing operation
- After-tax Net Present Value (“NPV”) (5%) and Internal Rate of Return (“IRR”) of $387 million and 16.0%
- After-tax NPV (5%) and IRR of $562 million and 20.3% using $1,760 per ounce gold (see Table 1)
- Average cash operating costs of $748/oz and all-in sustaining costs of $839/oz, net of by-product credits
- LOM processed grades of 0.72 grams per tonne (“g/t”) gold and 5.9 g/t silver
- LOM revenue mix of 95% gold and 5% silver
- Initial capital costs including working capital of $607 million, not including refundable value added tax
The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that the PEA will be realized.
Table 1: Summary of Economic Results by Gold and Silver Price
| Percentage of Base Case Prices | 90% | 100% | 110% |
|---|---|---|---|
| Gold Price (per oz) | $1,440 | $1,600 | $1,760 |
| Silver Price (per oz) | $18.90 | $21 | $23.10 |
| Pre-Tax NPV (5%) (SM) | $375 | $640 | $904 |
| Pre-Tax IRR | 14.9% | 21.0% | 26.6% |
| Post-tax NPV (5%)($M) | $211 | $387 | $562 |
| Post-Tax IRR | 11.4% | 16.0% | 20.3% |
Table 2: Capital Expenditure Estimate Summary
| Initial Capital ($M) | |
|---|---|
| Process Plant & Infrastructure | $206 |
| Equipment (Mining and Ancillary Facilities) | $122 |
| Pre-Production Mine Development | $66 |
| Subaqueous Tailings Storage Facility | $24 |
| Other Direct and Indirect Costs | $95 |
| Sub-total | $513 |
| Contingency (13.4% Allowance) (1) | $69 |
| Freight, Duties and Taxes | $25 |
| Refundable Value Added Tax | $50 |
| Total Initial Capital | $657 |
| Sustaining Capital and Closure Costs ($M) | |
| Life of Mine Sustaining Capital | $175 |
| Average Annual Life of Mine Sustaining Capital | $15 |
| Net Closure Costs (Closure, Severance and Salvage) | $30 |
Note: Totals may not add up due to rounding
(1) The contingency allowance was developed on an area-by-area cost centre assessment of estimate confidence. The assessment considered scope, quantification, and pricing factors to assign a contingency amount to each area.
Table 3: Summary of Operating Cost Estimates and Cash Costs
| Average Operating Costs | Years 1-5 | Years 6-12 | LOM |
|---|---|---|---|
| Mining Costs per Tonne Mined - Underground | $32.25 | $30.33 | $31.69 |
| Mining Costs per Tonne Mined - Open Pit | $1.59 | $1.47 | $1.53 |
| Per Tonne Milled | |||
| Mining Costs | $8.52 | $4.25 | $6.00 |
| Processing and Tailings Management Costs | $8.38 | $8.30 | $8.33 |
| General, Administrative, Environment and Site Costs | $1.91 | $1.47 | $1.65 |
| Total Operating Costs | $18.81 | $14.02 | $15.98 |
| Average Net Cash Costs per Ounce(1) | Year 1-5 | Year 6-12 | LOM |
| Operating Costs | $744 | $780 | $763 |
| Refining and Transport | $18 | $23 | $20 |
| By-products Credits | ($70) | ($98) | ($85) |
| Government 3% NSR Royalty | $48 | $50 | $50 |
| C1 Cash Cost Net of By-products | $741 | $755 | $748 |
| Sustaining Capital and Net Closure Costs | $100 | $80 | $91 |
| All-in Sustaining Net Cash Cost | $841 | $835 | $839 |
Note: Total may not add up due to rounding. By-products calculated using $21.00 per ounce silver.
Net Cash Costs: (operating costs including transportation and refining costs + Royalties - By-product credits)/Payable Au oz.
All-in Sustaining Cash Cost: Adds sustaining capital and closure costs to the Net Cash Cost.
Mining and Processing Facility
Condor North consists of three adjacent open pit mine areas and one underground mine. The open pit mine areas are named "Los Cuyes", "Soledad", and "Enma"; and the underground mine is "Camp."
The open pits will be mined with conventional hard rock mining methods. The terrain is steep at the three open pit deposits and has jungle vegetation with thin layers of saprolite rock. The initial development of each working area will be mined using a set of small drills, loaders, and trucks. Once a large working area is opened up, a primary production fleet consisting of larger drills, shovels/loaders and trucks will be deployed at the open pits. The Los Cuyes deposit consists of three phases, Soledad consists of two phases, and Enma is one phase. Los Cuyes will have the tallest highwall at approximately 700 metres.
The Camp deposit consists of a series of steeply dipping, sub-parallel mineralized structures that will be mined using mechanized underground methods. The mining methods used will be longitudinal and transverse blasthole stopping with waste rock backfill, cemented where required. Access to the deposit will be through portals at the 1,200-metre elevation, then through a series of ramps to gain access to working levels on 20-metre vertical intervals ranging from elevations of 600 to 1,300 metres.
The proposed processing facility for Condor North is a conventional gravity concentration and carbon-in-leach ("CIL") circuit. It has been designed to treat 25,000 tpd (8.92 Mtpa average) of mineralized material over the 12-year mining life.
For more details see News release July 28, 2021
Table 4: Mined and Processed Material Summary
| Processed Material |
Tonnes (kt) |
Grade | Contained Metal | Contained Metal % Total | |||
|---|---|---|---|---|---|---|---|
| Au (g/t) | Ag (g/t) | Au (koz) | Ag (koz) | Au % | Ag % | ||
| Camp (Underground) | 6,293 | 2.52 | 20.78 | 510 | 4,204 | 20.5 | 20.6 |
| Los Cuyes (Open Pit) | 72,104 | 0.62 | 5.24 | 1,431 | 12,149 | 57.5 | 59.4 |
| Soledad (Open Pit) | 27,467 | 0.60 | 4.26 | 529 | 3,765 | 21.3 | 18.4 |
| Enma (Open Pit) | 1,135 | 0.56 | 9.06 | 20 | 331 | 0.8 | 1.6 |
| Total Processed | 106,999 | 0.724 | 5.94 | 2,490 | 20,449 | 100% | 100% |
| Waste material (Open pits) | 194,998 | ||||||
| Total Mined | 301,997 | ||||||
| Strip Ratio (Open Pits) | 1.94 | ||||||
Table 5: Processing and Production Schedule
| Production | Year 1-5 | Year 6-12 | LOM |
|---|---|---|---|
| Avg. Processed Tonnes (kt) | 8,670 | 9,028 | 8,917 |
| Avg. Gold Grade (g/t) | 0.87 | 0.63 | 0.72 |
| Avg. Silver Grade (g/t) | 6.1 | 5.8 | 5.9 |
| Avg. Payable Gold Per Year | 221 | 162 | 187 |
| Avg. Payable Silver Per Year | 755 | 760 | 758 |
Metallurgical Recoveries and Test Work Summary
Recent test work (2020-2021) was completed by C.H. Plenge & CIA S.A. ("Plenge") at its laboratory in Lima, Peru. Using representative composites, it confirmed the material from Los Cuyes, Enma, and Camp deposits are amenable to a conventional crush, grind, gravity and CIL flow sheet.
Overall gold and silver recoveries are projected to be 90% and 45% respectively. Below is a summary of the gold and silver recoveries for each deposit based on the metallurgical test results.
Table 6: Selected Metallurgical Recoveries Summary
| Total Recoveries | |||
| Processed Material Source | % of Processed Material | Gold | Silver |
| Los Cuyes | 67% | 89% | 48% |
| Soledad | 26% | 90% | 30% |
| Camp | 6% | 94% | 48% |
| Enma | 1% | 71% | 49% |
| Total Recovery | 90% | 45% | |
For further details on the PEA click here for the News Release July 28, 2021
Qualified Persons
The scientific and technical information has been reviewed, verified and approved by the following Qualified Persons as defined by NI 43-101: Robert Sim, P.Geo. (Mineral Resource for Santa Barbara, Los Cuyes, Soledad and Enma), of SIM Geological Inc. (who has also verified the sampling, analytical, and test data underlying the disclosed Mineral Resource estimate); John Marek, P.E. (Mineral Resource for Camp) of Independent Mining Consultants, Inc.; Joseph McNaughton, P.E. (Open Pit Mining), of Independent Mining Consultants, Inc.; John Barber, P.E. (Underground Mining – Camp), of JC Barber LLC; Robert Michel, SME Registered Member (Economic Analysis and Infrastructure) of Robert Michel Enterprises; Nelson King, SME Registered Member (Metallurgy and Process Engineering); Scott Elfen, P.E. (Waste Rock and Tailings Management Facilities and Site Infrastructure) of Ausenco Limited and Norm Norrish, P.E. of Wiley & Norrish (Pit Slope Design and Underground Geotechnical). All of the Qualified Persons are independent of Luminex.
Leo Hathaway, P.Geo, a "qualified person" within the definition of that term in NI 43-101, has reviewed and approved the scientific and technical information contained on this page.