Vancouver, British Columbia, August 29, 2016 – Rye Patch Gold Corp. (TSX.V: RPM; OTCQX: RPMGF; FWB: 5TN) (the “Company” or “Rye Patch”) is pleased to announce that construction of the new South Heap Leach facility has started at the Florida Canyon mine located in Pershing County, Nevada. The Company completed the acquisition of the Florida Canyon mine on July 28, 2016. Since the purchase, the Florida Canyon mine has crushed the under-liner material for the South Heap Leach facility; prepared the primary crusher for the move from the Standard Gold mine located 6 kilometres to the south to its new home adjacent to the South Heap Leach facility; completed maintenance on the mining fleet; and is now breaking ground for the ponds and pad of the South Heap Leach facility.
The Florida Canyon gold mine is fully permitted, has been in continuous production since 1986 and is currently producing gold from its existing leach pad facilities at Florida Canyon and Standard Gold. The Company is restarting the Florida Canyon mine, which includes the new heap leach pad and a new waste storage facility. Mining will be from four areas within the existing pit and constitutes a planned layback of the Florida Canyon gold deposit. A total of 63.81Mtons (58Mtonnes) of ore is planned to be mined over an 8-year period. An estimated average recovery of 71.1% would yield 602,000 ounces of gold over the life of mine. Rye Patch expects Initial production from the South Heap Leach facility to occur in the fourth quarter of 2016 and anticipates achieving commercial production from the new leach pad by the second quarter of 2017.
William Howald, the Company’s President and CEO, stated, “The Company has embarked on a transformational journey to become Nevada’s next new gold producer. We are creating a new and exciting company with anticipated initial annual production of 75,000 ounces gold expected to begin in early 2017. With an ore body that shows great potential to expand the existing Measured and Indicated Resource of 1.1 million ounces of gold, Florida Canyon provides Rye Patch with a solid foundation from which to grow and significant exploration upside along a trend that has been ignored for the past 30 years. As history has shown, the players with a large land position along a major gold trend have a significant advantage and opportunity to grow a formidable mining company. ”
As announced by news release dated May 25, 2016, and filed on SEDAR July 8, 2016, Mine Development Associates (“MDA”) completed a Preliminary Economic Assessment (the “PEA”) for the Florida Canyon gold mine titled “Technical Report – Preliminary Economic Assessment for the Florida Canyon Mine, Pershing County, Nevada USA” effective March 16, 2016, dated April 18, 2016 and revised June 22, 2016. The PEA was completed based on a US$1,000 per ounce gold price for the first two years and a US$1,150 per ounce gold price for the remaining life of mine.
PEA and Florida Canyon mine Highlights:
- Average production of approximately 75,000 ounces of gold per year for 8 years;
- US$1,000 per ounce of Au for years 1 to 2 and US$1,150 per ounce of Au used after year 2;
- Pre-tax NPV (7.5%) of US$65.43 million, with a 41.5% IRR;
- Cash cost per gold ounce is calculated at US$759 per ounce;
- Fully permitted expansion;
- 1,126,600 ounces of gold in the measured and indicated category;
- US$27 million Credit Facility;
- Significant potential synergies with existing Oreana trend resource assets; and
- Tremendous exploration and further development potential.
|Table 1: PEA Sensitivity Analysis (AFTER TAX)|
|% of Base Case||NPV7.5%
Yr 1 & 2
After Yr 2
The Company cautions that the PEA is preliminary in nature in that it is based on Inferred Mineral Resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be characterized as mineral reserves, and there is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The Company’s decision to place the Florida Canyon mine into production is not based on a feasibility study of mineral reserves demonstrating economic and technical viability, and the Company cautions that historically such projects have a much higher risk of economic or technical failure.
All mining and ancillary equipment required to operate the Florida Canyon mine is in place together with a team of high quality experts experienced in mining a low-cost operation with a successful 30-year history.
Following the restart of Florida Canyon, Rye Patch intends to advance its other nearby resource projects as well as drill oxide targets at the mine and along the mine trend between Florida Canyon and the Standard Gold mine (approximately 10 kms). Significant exploration targets exist within the pit limits and beneath the Florida Canyon oxide deposit. These near- and medium-term opportunities will be addressed once the mine is in full production. From an operational viewpoint, substantial synergies exist with Florida Canyon and the nearby Lincoln Hill and Wilco resource projects. The outlying oxide resources can be mined and leached at site with carbon transported to the Florida Canyon stripping and refining facility. This benefit will reduce capital costs for the Lincoln Hill and Wilco projects. Longer-term opportunities exist along the Oreana trend. The Company controls over 180 square kilometres of prospective land along the trend and is one of the largest landholders in Pershing County.
Mr. William Howald, AIPG Certified Professional Geologist #11041, Rye Patch Gold’s CEO and President, is a Qualified Person as defined under National Instrument 43-101. He has reviewed and approved the contents of this news release.
About Rye Patch Gold Corp.
Rye Patch Gold Corp. is a Nevada based, Tier 1, well-funded mining company led by a seasoned management team with a wide range of operations and project development successes. The team is engaged in the mining and development of quality resource-based gold and silver mines and projects along the established Oreana trend in west central Nevada. Benefitting from its strong financial position, the Company has leveraged its cash to acquire the operating Florida Canyon gold mine. The Company now controls a trend-scale platform with operations, replacement assets and exploration upside. The combination of operations and exploration concentrated along a major Nevada gold trend positions Rye Patch as an emerging mid-tier gold producer with tremendous value added potential. For more information about the Company, please visit our website at www.ryepatchgold.com.
|On behalf of the Board of Directors||For additional information contact:|
|‘William Howald’||Rye Patch Gold Corp|
|William C. (Bill) Howald, CEO & Presidentemail@example.com|
|Tel.: (604) 638-1588|
|Fax: (604) 638-1589|
This news release contains forward-looking statements relating to future plans and objectives of the Company, proposed operations of the Company including mine development, future events and conditions and other statements that are not historical facts, all of which are subject to various risks and uncertainties. The Company’s actual results, programs and financial position could differ materially from those anticipated in such forward-looking statements as a result of numerous factors, some of which may be beyond the Company’s control. These factors include: the failure of the Company to satisfy the conditions in the credit agreement entered into with Macquarie Bank Limited (“Credit Facility”), mine redevelopment plans and production results; the availability of funds; the financial position of Rye Patch; the timing and content of work programs; the results of exploration activities and development of mineral properties; the interpretation of drilling results and other geological data; the reliability of calculation of mineral resources; the reliability of calculation of precious metal recoveries; the receipt and security of mineral property titles; project cost overruns or unanticipated costs and expenses; fluctuations in metal prices; currency fluctuations; and general market and industry conditions.
Forward-looking statements are based on the expectations and opinions of the Company’s management on the date the statements are made. The assumptions used in the preparation of such statements, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. As a result, the Company cannot guarantee that the Credit Facility and related transactions will be completed on the terms and within the time disclosed herein or at all.
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.