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Fortune Bay Announces Positive PEA For Goldfields Project, Saskatchewan

Press Release

Average Annual Gold Production of 101 koz, After-Tax NPV5% of C$285M, and IRR of 35.2%


  • Robust economics with after-tax net present value (“NPV”) (discount rate 5%) of C$285M, internal rate of return (“IRR”) of 35.2% and payback of 1.7 years estimated with gold price of US$1,650 per ounce
  • Average annual gold production of 101,000 ounces over life of mine (“LOM”), with an average of 122,000 ounces per year in the first 4 years
  • 8.3 year LOM producing 835,000 ounces of gold
  • Average cash cost of US$778/oz and all-in sustaining cost (“AISC”) of US$889/oz gold
  • Initial capital expenditure of C$234M
  • Mill capacity of 7,500 tonnes per day (2.7 Mt per annum) with average gold recovery of 95.3%
  • Over 80% of mineable ounces coming from the Box deposit

HALIFAX, NS November 1, 2022 – Fortune Bay Corp. (TSXV:FOR, FWB:5QN, OTCQX: FTBYF) (“Fortune Bay” or the “Company”) is pleased to announce positive results from the independent Preliminary Economic Assessment (“PEA”) for its 100% owned Goldfields Project (“Goldfields” or the “Project”) located near Uranium City, Saskatchewan. The PEA provides a base case assessment for developing the Goldfields mineral resource by conventional open pit mining methods, and gold recovery with a standard free milling flowsheet, incorporating gravity and leaching of the gravity tails. The economic model supports an operation with low capital cost and high rate of return over an 8.3 year mine life, with average annual production of 101,000 ounces of gold. The PEA was prepared by Ausenco Engineering Canada Inc. (“Ausenco”) in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). The PEA NI-43-101 Technical Report will be filed on SEDAR ( within 45 days of this News Release.

Dale Verran, CEO of Fortune Bay, commented, “Goldfields shows potential to become a highly profitable gold mine supported by a PEA produced by Ausenco, one of the most experienced and reputable engineering firms working on gold projects in Canada. Goldfields has now established itself as a leading gold development project in Saskatchewan, which is significant given it is the top-ranked mining jurisdiction in Canada and ranked number two globally. The PEA, based upon 99% of Indicated Mineral Resources, together with the substantial repository of project data, lays a solid foundation for the advancement of the Project.”

Mr. Verran, further commented, “The Project has numerous desirable attributes including a low strip ratio, simple mineralogy and free-milling gold. The robust PEA economics are highlighted by low initial capital costs, competitive all-in sustaining costs, a relatively short payback period and a favorable NPV:CAPEX ratio. In addition, the established infrastructure in a historical mining area, including a powerline to site, and a valid development permit is expected to facilitate the timeline towards construction and operations. The Project continues to present numerous opportunities, including exploration potential, and additional mining and processing opportunities to be further investigated during a pre-feasibility stage.”

Description of the Goldfields Project and PEA

The 100% owned Goldfields Project (“Goldfields” or the “Project”) is located approximately 13 kilometres south of Uranium City in northern Saskatchewan, as shown in Figure 1. The Project comprises 12 mineral dispositions, covering approximately 5,000 hectares, and is host to the Box and Athona gold deposits and numerous other gold prospects and occurrences.

The Project is located within a historical mining area and benefits from established infrastructure, including a road and hydro-powerline to the Box deposit. Nearby facilities and services in Uranium City include bulk fuel, civil contractors, and a commercial airport. The Project has a history of gold production (64,000 oz produced between 1939 to 1942), numerous exploration drilling campaigns (over 1,000 drill holes) and historical mining studies by previous owners of the Project.

The current total gold resource for Box and Athona stands at 979,900 ounces of gold in the Indicated category (23.2 million tonnes at an average grade of 1.31 g/t gold) and 210,800 ounces of gold in the Inferred category (7.1 million tonnes at an average grade of 0.92 g/t gold), as defined in Table 8. The PEA considers conventional open-pit mining at both the Box and Athona gold deposits.

Ausenco was appointed as lead consultant in April 2022 to prepare the PEA in accordance with NI 43-101. The PEA was completed in collaboration with Moose Mountain Technical Services (“MMTS”) for the mine design, and SRK Consulting (Canada) Inc. (“SRK”) for the updated Mineral Resource Estimate (“MRE”) and Environmental, Permitting and Social aspects of the Project plan. The PEA comprised a Phase 1 Mine to Mill Optimization to determine the best business case for the Project, including social and environmental considerations, followed by a Phase 2 which included the PEA study based on a 7,500 tpd production case.

Figure 1: Location of the Goldfields Project

Financial Analysis

The economic analysis was performed assuming a 5% discount rate and a gold price of US$1,650 per ounce based on long-term consensus pricing. On a pre-tax basis, the NPV5% is C$401 million, the IRR is 45.5% and the payback period is 1.4 years. On an after-tax basis, the NPV5% is C$285 million, the IRR is 35.2% and the payback period is 1.7 years. A summary of the Project economics, and the projected annual gold production is provided in Table 1 and Figure 2, respectively.

Table 1: Summary of Project Economics


Cash costs consist of mining costs, processing costs, mine-level G&A and refining charges and royalties
AISC includes cash costs plus sustaining capital, closure costs, and salvage value.
Payback is defined as achieving cumulative positive free cashflow after all cash costs and capital costs, including sustaining capital costs and is calculated from the start of production.
Refer to “Non-IFRS Financial Measures” below.

Cautionary Statement: The reader is advised that the PEA summarized in this news release is intended to provide only an initial, high-level review of the Project potential and design options. The PEA mine plan and economic model include numerous assumptions and the use of both indicated and inferred mineral resources. Inferred mineral resources are considered to be too speculative to be used in an economic analysis except as allowed for by NI 43-101 in PEA studies. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
The PEA is based upon a subset of the mineral resources which incorporates 98.6% of indicated mineral resources and 1.4% of inferred mineral resources.

Projected gold production is 835,000 ounces over the 8.3 year LOM. Gold production averages 101,000 ounces per year, with an average of 122,000 ounces per year in the first four years. Attributable recovered ounces from Box and Athona over LOM are 81% and 19%, respectively.

Figure 2: Annual Gold Production

Mine Design and Production Schedule

The PEA considers open-pit mining from the Box and Athona gold deposits over a project mine life of 8.3 years. Mine planning is based on conventional open pit methods suited for the Project location and local site requirements. The subset of Mineral Resources contained within the designed open pits are summarized in Table 2, with a 0.30 g/t gold cut-off, and form the basis of the mine plan and production schedule. A total of 98.6% of the Mineral Resources subset used in the PEA are classified as Indicated.

Table 2: PEA Mine Plan Production Summary

PEA Mill Feed 22,708 kt
Mill Feed Gold Grade 1.20 g/t
Waste Overburden and Rock 69,139 kt
Waste : Resource Ratio 3.0 : 1


1. The PEA Mine Plan and Mill Feed estimates are a subset of the September 1, 2022 Mineral Resource estimates and are based on open pit mine engineering and technical information developed at a Scoping level for the Box and Athona deposits.
2. PEA Mine Plan and Mill Feed estimates are mined tonnes and grade, the reference point is the primary crusher.
3. Mill Feed tonnages and grades include open pit mining method modifying factors, such as dilution and recovery.
4. Cut-off grade of 0.30 g/t assumes US$1,650/oz. Au at a currency exchange rate of 0.77 US$ per C$; 99.95% payable gold; C$5/oz offsite costs (refining, transport and insurance); a 2.0% NSR royalty; and a 95% metallurgical recovery for gold.
5. The cut-off grade covers processing costs of C$12.00/t, administrative (G&A) costs of C$6.20/t, and low grade stockpile Rehandle costs of C$1.00/t.
6. Estimates have been rounded and may result in summation differences.

Optimized ultimate pit limits for each deposit have been split into phases or pushbacks to target higher economic margin material earlier in the mine life. The Box deposit is split into three phases, and the Athona deposit is split into two phases (Figure 3). Pit designs are configured on five meter bench heights, with eight meter wide berms placed every four benches, or quadruple benching.

Figure 3: Mine Plan Overview

The mill will be fed with material from the pits at an average rate of 2.7 Mtpa (7.5 ktpd). Waste rock will be placed in one of three identified waste rock storage facilities (“WRSF”). Waste rock will also be used for construction of the haul roads and the tailings dam located north of the process facilities. Topsoil and overburden encountered at the top of the pits will be placed in a dedicated area and kept salvageable for closure at the end of the mine life. Cut-off grade optimization is employed, stockpiling lower grade material in the initial years and rehandling this material to the mill towards the end of mine life.

Mining cost estimates are built up from first principles based on the selected mining methods, assuming an owner managed operation. Mining operations will be based on 365 operating days per year with two twelve- hour shifts per day.  An allowance of twelve days of no mine production per year has been built into the mine schedule to allow for adverse weather conditions.

The mine production schedule is summarized in Figure 4.

Figure 4: Mine Production Schedule Summary

Metallurgy and Mineral Processing

Goldfields has been the subject of extensive metallurgical testwork programs and previous studies, dating back to 1939. This work has determined that there are no significant metallurgical or environmental hindrances associated with the mineralization. Based on the latest test work conducted by SGS Canada Inc. (“SGS”) in 2015, gold can be effectively recovered from the mineralization at both Box and Athona by gravity and leaching methods.

The Goldfields process flowsheet was designed based on previous testwork and preliminary financial evaluations, with key process design criteria derived from testwork conducted at SGS in 2015. The process plant employs gravity concentration, and standard leaching with carbon-in-pulp (“CIP”) technology for gold recovery. The plant includes three stages of crushing followed by ball milling, classification, gravity concentration, leach and CIP. Tailings will be subjected to cyanide detoxification before being pumped to the tailings storage facility.

The process plant will treat 2.7 Mt of material per year at an average throughput of 7.5 ktpd based on mill availability of 92%. The crusher plant circuit design is set at 65% availability and the gold room availability is set at 52 weeks per year. The plant will operate two shifts per day, 365 days per year and will produce doré bars.

The plant has been designed to realize an average recovery of 95.3% of the gold (95.9% Box and 93.5% Athona) over LOM. Of this, 24.5% of the gold will be extracted by gravity and a further 70.8% by the leach/CIP process. The proposed process flowsheet is shown in Figure 5.

Figure 5: Goldfields Simplified Process Flowsheet

Site Infrastructure

Goldfields benefits from an existing gravel road from Uranium City (Highway 962) and high-voltage powerline to the Box site from hydropower stations located approximately 40 kilometres to the northwest. Both the gravel road and powerline will require minor upgrades and refurbishment. Stoney Rapids, the regional business hub, is located approximately 150 kilometres to the east and is accessible along Lake Athabasca by boat or barge during the summer, and by an ice-road during winter, built and maintained by the Provincial Government.

Figure 6 shows the site layout, including pits for Box and Athona, stockpiles, waste rock storage facility (“WRSF”), Tailings Storage Facility (“TSF”), onsite roads, processing plant and mining infrastructure areas such as offices and truck shops. This infrastructure has been kept at least 30 meters from the surveyed edge of Lake Athabasca and located to minimize disturbance to existing waterbodies and watercourses.

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