Announcement • Apr 01
U.S. Gold Corp. Delivers Robust Feasibility Study for CK Gold Project Highlighting Attractive Economics and Detailing Relative Low Development Risk
U.S. Gold Corp. announced the results of its Feasibility Study for the development of its wholly-owned CK Gold Project, located in southeast Wyoming 20-mile from Cheyenne. Solid Project returns: After-tax net present value (NPV) 5% of USD 632 million and 27% after-tax internal rate of return (IRR) using base case metal prices of USD 3,250 per ounce gold, USD 4.50/lb copper, and USD 40/oz silver; After-tax NPV(5) of USD 1,300 million and 45% after-tax IRR using recent spot metal prices of USD 4,500/oz Au, USD 5.50/lb Cu and USD 70/oz Ag. Fully permitted: All required permits to begin construction are in-hand. USD 5 million reclamation bond in place to cover first year of planned construction. Initial 11-yr mine-life: Current fully permitted mine plan focused on 1.6 million contained gold equivalent ounces, as stated in Mineral Reserves. Attractive production profile focused on early higher grades: After 1 year of ramp up, average sales of 102 thousand ounces AuEq from year 2 to 8, with average life of mine sales of 85 thousand ounces AuEq at total cash costs of USD 1,748/oz AuEq. Ore body shows low life of mine strip ratio of 0.89:1 with minimal pre-stripping. Simple, robust, financeable Project: Total initial capital cost of USD 394 million (excludes USD 28 million of preproduction owners' cost and includes contingency of USD 47 million) and sustaining capital of USD 35 million over the life of mine; well understood regulatory jurisdiction with stability and an exceptional location for infrastructure, manpower and support services. Competitive Project metrics: Base case post tax NPV-to-capex ratio of 1.6 and payback of 2.5 years; spot price NPV-to-capex ratio and payback improve to 3.3 and 1.6 years, respectively. Strong free cash-flow profile in early years: Year 2-8 average after-tax free cash flow of USD 160 million; continuation into additional resources and further anticipated resource extensions at depth. Simple, compact Project layout and processing: ~80-acre open pit is the source of ore and waste rock to mine facilities all within a 1.5-mile haul. The ore is fed to a primary crusher or low-grade stockpile. Primary crushed ore is ground in a semi-autogenous grinding (SAG) - ball mill comminution circuit prior to flotation, regrind of rougher concentrate before final flotation to produce a clean gold rich copper concentrate. Dry-stack tailings enhance the most efficient use of water. Significant benefits to State and local communities: 2.1% royalty payments earmarked for grades K-12 education; an average of 198 direct permanent jobs are expected to be created at CK. No cultural impacts revealed: Archaeological surveys have identified no significant artifacts or sites in the Project area. Significant scarcity value: CK is one of the few fully permitted large-scale precious metals projects in the U.S. at the Feasibility Study level and is actively being advanced. Visibility on short and long-term growth: Significant measured and indicated resource material has been excluded from the initial mine plan to avoid impacting a dry drainage channel. With known resources at depth, mine expansion at depth and along strike will be the focus of future plans and expansion to the permitted activity; CK is one of the few permitted undeveloped gold and copper resources in the U.S. with a discernable pathway to expansion. Aggregate Potential: Additional revenue from aggregate production has largely been excluded from the feasibility study. Anticipate increased aggregate sales into the Rocky Mountain region as the gold and copper mine progresses. Reclamation Savings: Potential to reduce reclamation costs as the city and state consider the use of the ultimate pit as recreation and water reservoir. Excellent timing: With the Feasibility Study now complete and full permits in hand, the Project is positioned to advance in a current gold–copper-silver price environment that is one of the strongest in history, supported by favorable U.S. sentiment toward domestic production and mineral security tailwinds. The Feasibility Study confirms robust economics for a low-cost, large-scale, conventional open pit feeding a simple copper-gold concentrator process plant, with competitive operating costs and high rate of return. The Feasibility Study outlines total production of 931 thousand ounces AuEq over an 11-year operating mine life (followed by two years of closure), resulting in an average life of mine annual production profile of 85 thousand ounces AuEq per annum at an AISC of USD 1,785/oz AuEq. The Project generates an after-tax NPV5% of USD 632 million with an after-tax IRR of 27% at base case gold, copper and silver prices of USD 3,250/oz, USD 4.50/lb and USD 40/oz, respectively. Mining: Total Tonnage Mined (thousand ton): 140,597; Total Tonnage Moved (includes stockpile and waste rehandle): 163,546; Total Ore Mined (thousand ton): 74,527; Strip Ratio (Waste: Ore): 0.89; Operating Mine Life (years): 11; Contained Gold (thousand ounces): 1,015; Contained Copper (lbs): 259,880; Contained Silver (thousand ounces): 3,031; Contained Gold Equivalent (million ounces AuEq): 1.4. Plant Metal Recovery: Life of mine Average Gold Recovery (%): 71.5%; Life of mine Average Copper Recovery (%): 80.6%; Life of mine Average Silver Recovery (%): 68.7%. Payable Metals: Life of mine Gold Payable (thousand ounces): 0.2; Life of mine Copper Payable (thousand lbs): 186,726; Life of mine Silver Payable (thousand ounces): 1,874; Life of mine Gold Equivalent Payable (thousand ounces AuEq): 931; Avg. Annual Gold Payable (thousand ounces) - Year 1 to Year 11: 64.3; Avg. Annual Copper Payable (million lbs) - Year 1 to Year 11: 17; Avg. Annual Silver Payable (thousand ounces) - Year 1 to Year 11: 170; Avg. Annual Gold Equivalent Payable (thousand ounces AuEq) - Year 1 to Year 11: 85; Avg.
