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August 16, 2022
Vancouver – August 16, 2022 – Benchmark Metals Inc. (the “Company” or “Benchmark“) (TSX-V: BNCH) (OTCQX: BNCHF) (WKN: A2JM2X) – is pleased to report the completion of a Preliminary Economic Assessment (“PEA”) on the Lawyers Gold-Silver Project (the “Project”) located within a road accessible region of the prolific Golden Horseshoe area of north-central British Columbia, Canada. The PEA presents a robust open pit mining operation with attractive economics at base case gold and silver prices.
*All-In Sustaining Costs (Net of By-Products) are calculated for the purpose of the Study as the sum of all operating costs (mining, processing, site administration and refining), reclamation and sustaining capital, minus the revenue from Ag, all divided by the gold ounces sold to arrive at the per ounce Au figure.
John Williamson, CEO commented, “The PEA clearly demonstrates the low cost and robust return of the Lawyer’s Gold-Silver Project even when stress tested with considerable contingency in the base case. We continue on a straightforward pathway to advancement. We continue to test new targets on the large prospective land package to add value to a project that is simple, low risk with a high-grade near surface open-pit resource, combined with proximity to existing infrastructure, making it one of the best candidates to become British Colombia’s next precious metal mine.”
The PEA considers a conventional truck and shovel open-pit mining operation, with common equipment sizing, covering the Cliff Creek (“CC”), Dukes Ridge (included in CC), and AGB pits, feeding a 10,600 tonnes per day industry standard processing plant with two-stage crushing, grinding, whole-ore leach and a Merrill Crowe recovery circuit, with production of gold-silver doré bullion on site. The PEA is based on an update of the mineral resource estimate announced by the Company on June 11, 2022 press release. The PEA was prepared by JDS Energy and Mining Inc. (“JDS”) of Vancouver, British Columbia, Canada.
Ian Harris, VP Engineering, commented “The PEA confirmed the current project development timelines, with industry standard open-pit mining methods, processing flowsheet, design criteria, and compact footprint. Multiple target high-grade resource areas have been identified near but outside the pit limits. There is a significant opportunity to upgrade the already robust project through adding underground mining to production scheduling. These evaluations that represent a considerable upside opportunity will be incorporated into detailed mine planning of the feasibility study.”
The full PEA will be filed on SEDAR at www.sedar.com and Benchmark’s website www.benchmarkmetals.com within 45 days of the issuance of this news release.
PEA Economic Results
|Royalties||% of NSR||0.5|
|NPV5% Sensitivity Analysis|
|IRR (%) Sensitivity Analysis|
|NPV5% Sensitivity Analysis|
|IRR (%) Sensitivity Analysis|
PEA Recommendations and Opportunities
The PEA has been presented with surface mining only. However, there is a strong opportunity to enhance the Base Case economics with supplemental feed from underground operations. The mineralized zones are sub-vertical, which makes them amenable to preferred low-cost mining methods, such as sub-level open stoping. They are also reasonably thick, at 4 to 15 m, and thus could be mined at moderate production rates, as opposed to the low throughput one would expect from narrow-vein operations.
Underground stopes would either be accessed from multiple portals driven in the pit walls or by a dedicated ramp driven beneath the pit (see Figure 1), for potential stope shapes above a 2.0 g/t AuEq cut-off.
Figure 1: Potential Stope Shapes Adjacent to and Below Cliffs Creek Pit
If proven to be economic in future stages of study, the stopes could be used either to extend operational mine life with underground operations conducted after the open pit mine has been exhausted or, more likely, mined in conjunction with open pit operations to provide higher grade supplemental feed.
An integrated surface and underground mine schedule will be evaluated in the next stage of study.
PEA Parameters and Assumptions
The main parameters and results of the PEA are summarized in the following table:
|Total tonnes milled||million tonnes||46.3|
|Diluted gold grade||g/t||1.23|
|Diluted silver grade||g/t||23.73|
|Gold recovery – AGB||%||92.1|
|Silver recovery – AGB||%||60.0|
|Gold recovery – Cliffs Creek||%||92.5|
|Silver recovery – Cliffs Creek||%||83.0|
|Recovered gold||million ounces||1.696|
|Recovered silver||million ounces||26.695|
|Average annual payable gold||ounces/year||141,000|
|Average annual payable silver||ounces/year||2,202,000|
The PEA is based on assumed life of mine operating costs by activity area, as shown in the table below.
|Operating Costs||C$/tonne Processed||C$M LOM|
|Total Cash Cost||47.78||2,212.1|
*Numbers may not add due to rounding
The PEA is based on the resource estimate prepared by P&E Mining Consultants Inc., and APEX Geoscience Ltd., and reported by Benchmark Metals on June 11, 2022, which is summarized in the table below:
|Total Pit and Out of Pit Constrained Mineral Resource Estimate @ 0.4 g/t and 1.5 g/t AuEq Cut-Off|
|k||g/t||g/t||g/t||k oz||M oz||koz|
|Measured & Indicated||67,376||1.16||22.88||1.45||2,521||49.6||3,141|
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The estimates of Measured, Indicated and Inferred mineral resources assumed metal prices of US$1,750/oz Au and US$20/oz Ag, 0.78 US$:CDN$ FX, with process recoveries of 90% Au and 83% Ag. A C$14.50/t process cost and C$5/t G&A cost were used. The Au:Ag ratio was 80:1. The constraining pit optimization parameters were C$3.15/t mineralized and waste material mining cost and 50° pit slopes with a 0.30 g/t AuEq cut-off.
*The tonnage, gold equivalent ounces and grades are unchanged from the numbers reported by Benchmark Metals on June 11, 2022. The ounces and grades for gold and silver have been updated to correct errors in the original table provided in the June 11, 2022 news release.
The PEA is based on a capital cost summary, in accordance with AACE Class 5 guidelines with an estimated accuracy of +/- 50%, which is shown in the table below:
|Capital Item||Pre-Production(C$ million)||Sustaining(C$ million)||Total(C$ million)|
|Tailings & Waste Management||48.2||49.7||98.0|
|Engineering and Project Management||24.5||2.3||26.8|
*Numbers may not add due to rounding
Contingency has been applied across the various Capex areas based on the level of design detail and past experience. A summary of applied contingency by area is shown below:
|Area Description||Contingency %||Contingency Value (C$M)|
|Tailings and Waste Management||25%||12.1|
|On Site Infrastructure||25%||7.3|
|Off Site Infrastructure||5%||2.3|
|Indirects, EPCM and Owner’s Costs||15%||13.5|
|Total – All Areas||17%||72.8|
The PEA assumes conventional open pit truck and shovel mining, and production designed to achieve a processing rate of 10,600 tonnes per day. The average mining rate is 68,000 tonnes per day of total material mined, with a maximum of 89,000 tonnes per day occurring in years 6 through 9.
The PEA mine design consists of four pits, with a mining sequence intended to maximize grade in the early years, smooth stripping requirements and maintain the processing facility at full production capacity. Operations would begin at the AGB deposit and transition in year two over to the Cliff’s Creek and Duke’s Ridge Deposits for the remainder of the mine life.
The primary owner-operated diesel mine fleet is designed to consist of 144-tonne capacity haul trucks, 22 m3 front shovels, a 17 m3 front end loader and 203 mm diameter drills. The ancillary mine fleet would consist of track dozers, graders, wheel dozers and water trucks.
The PEA assumes mineralized material would be processed using a single stage crushing circuit, a grinding circuit, a cyanide leach circuit, a counter current decantation circuit (“CCD”), and a Merrill Crowe (“MC”) circuit.
The run of mine material would be fed to a primary jaw crusher, crushing to a particle size P80 of 150 mm, which will be sent by conveyor to a mill feed stockpile. The mill feed stockpile will report to a grinding circuit which includes a SAG mill, Ball mill, and a pebble crusher, grinding the mineralized material to a particle size P80 of 75 µm. The solution used in the grinding circuit will be recycled water from the MC circuit containing residual cyanide. The grinding circuit will contain a gravity circuit located in the ball mill cyclone underflow stream. The gravity circuit will consist of a centrifugal concentrator followed by an intensive cyanidation, with an electrowinning (“EW”) cell to produce a gold precipitate in the refinery.
The griding circuit product will report to the leach circuit where cyanide will be added to increase the level in solution to the target concentration of 2,000 ppm, for a retention time of 32 hours. The leach circuit will discharge into a CCD circuit to separate produce a clear solution with 97% (or greater) of the gold that was dissolved in the grinding and leaching circuits.
The solution from the CCD circuit reports to the MC circuit which consists of a filter, and a Merrill Crowe tower which removes gold from solution by precipitating with zinc dust. The zinc dust will be filtered from the solution and report to the refinery. The remaining barren solution will report back to the process water tank.
The gold/zinc dust will be leached with acid to remove the zinc and then will be melted, along with the EW precipitate, into doré bars.
The PEA assumes CCD tailings would be pumped a cyanide detoxification circuit to reduce the cyanide concentration to permitted limits and then pumped to a tailings management facility.
The PEA assumes general infrastructure for the Project would support operations on a 24 hour per day, seven day per week basis. An overall Site Layout is shown below in Figure 2:
Figure 2: Overall Site Layout
Major infrastructure items would include:
Benchmark holds the required permits and approvals to continue exploring the areas comprising the Project.
Environmental baseline studies to support Environmental Assessment (“EA”) application are well underway. The 2-year Aquatics and Terrestrial Baseline Programs commenced in 2021. Additionally, geochemical and hydrogeological studies have all commenced. The Company expects completion of all environmental baseline studies by Q3 2023.
Upon completion of all environmental baseline studies, the Company expects to commence the EA process planning and EA application preparation phase in mid-2024.
Considerable work has either already been completed or is on track to be completed for the collection of FS data inputs, including:
The Company anticipates all necessary inputs for the FS to be complete by Q2 2023, with delivery of the final FS report in Q4 2023.
Quality Assurance and Control
Results from samples were analyzed at ALS Global Laboratories (Geochemistry Division) in Vancouver, Canada (an ISO/IEC 17025:2017 accredited facility). The sampling program was undertaken by Company personnel under the direction of Rob L’Heureux, P.Geol. A secure chain of custody is maintained in transporting and storing of all samples. Gold was assayed using a fire assay with atomic emission spectrometry and gravimetric finish when required (+10 g/t Au). Analysis by four acid digestion with 48 element ICP-MS analysis was conducted on all samples with silver and base metal over-limits being re-analyzed by atomic absorption or emission spectrometry. Rock chip samples from outcrop/bedrock are selective by nature and may not be representative of the mineralization hosted on the project.
The technical content of this news release has been reviewed and approved by Michael Dufresne, M.Sc, P. Geol., P.Geo., and Carly Church, P.Eng., PMP, qualified persons as defined by National Instrument 43-101.
About Benchmark Metals
Benchmark Metals Inc. is a Canadian based gold and silver company advancing its 100% owned Lawyer’s Gold-Silver Project located in the prolific Golden Horseshoe of northern British Columbia, Canada. The Project consists of three mineralized deposits that remain open for expansion, in addition to +20 new target areas along the 20-kilometre trend. The Company trades on the TSX Venture Exchange in Canada, the OTCQX Best Market in the United States, and the Tradegate Exchange in Europe. Benchmark is managed by proven resource sector professionals, who have a track record of advancing exploration projects from grassroots scenarios through to production.
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