Kopsa



Positive PEA completed October 2nd 2013 pdficon_large

Highlights (pre-tax and pre-finance) of the Base Case Model*

  • Net Present Value (8%) of US$38.6 million
  • Internal Rate of Return of 47.6%
  • Gross Revenue of US$ 282 million
  • Undiscounted Cashflow of US$ 66 million
  • Life of Mine (LoM) 9 years at peak rate of 1.2 Mtpa
  • LoM Capital costs of US$ 48.3 million (owner operator model and 25% contingency)
  • LoM Operating Costs of $700/oz gold equivalence (toz AuEq)
  • LoM stripping ratio of 0.63 (waste to run of mine  tonnes)
  • Annual average production of 27,000 oz’s gold and 1,050 tonnes (2.3 million pounds) of copper at average operating cost of $645/toz AuEq over the first six years
  • LoM production of 196,000 oz’s of gold and 8,200 t (18.1 million pounds) of copper at a mined grade of 0.91 g/t Au and 0.15% copper

* Base Case Model has been calculated using: gold price of USD 1,200 /toz; copper price of USD 6,000 /tonne; silver price of USD 20 /toz; discount rate of 8%; USD:EUR exchange rate of 0.75. The mining schedule envisages co-processing intermediate ore stockpile in the final 3 years. The operating costs $/toz AuEq are calculated by Total Operating Costs ÷ ($1,200 ÷ Gross Revenues (including by-products)). 

Important Cautionary Note Relating to Results of PEA

The economic analysis performed by SRK for the purpose of the PEA, is based only on Measured and Indicated Resources. Despite no Inferred resources being included, the economic analysis is still preliminary in nature, and only indicates the potential technical and economic viability of the project. The technical and economic viability of the project has not yet been demonstrated. Conversion of the Measured and Indicated Resources into Mineral Reserves would require the support of a pre-feasibility level study. There is no certainty that the reserves development, or production and economic forecasts on which this Preliminary Economic Assessment is based will be realised.

 


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The Kopsa Au-Cu deposit occurs within the Proterozoic aged late orogenic Kopsa Tonalite, a roughly rhomb shaped 1200 x 550 m intrusive, intruding a 1.92 Ga package of meta-greywacke and mica schists and intermediate pyroclastic volcanic rocks, interpreted as turbidite sequences. The whole sequence has been metamorphosed to upper-greenschist to amphibolite facies. Ore minerals mainly occur as compact sulphide veins or as stringers and blebs in connection with quartz veining and silicification. Fine grained disseminated ore minerals occur outside the veins in the altered host rocks. In the higher grade areas of the deposit, the quartz veins and silicification form more of a stockwork, rather than discrete vein sets. The main sulphide minerals are arsenopyrite, chalcopyrite, pyrrhotite and minor pyrite. Gold is free milling (non refractory) with typical grains sizes of 10μm, and has a close association with bismuth.
The mineralisation has so far been defined over an area of approximately 700 m by 200 m with a maximum thickness of about 50 metres. The mineralisation strikes towards 105°, and dips roughly 20° to the SSW. In the north, the mineralisation comes to bedrock surface, part of which outcrops at the “Kopsa Outcrop”. The maximum depth for the model is about 125 metres vertical from surface. The average drill spacing is 17.8 m, with a maximum spacing of 47.9 m. Alteration and sulphide associations suggest fluids with at least some magmatic input, and the host intrusion also cuts the main regional d2 foliation associated with peak deformation suggesting mineralisation post-dates orogenesis. Belvedere geologists have tentatively classified the deposit as belonging to the intrusive related style of deposit.

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Property Category CutOff Au g/t Tonnes Au g/t Cu % Ag g/t Au oz’s
Kopsa Measured  0.5 AuEq 11,500,000 0.83 0.15 2.17 307,000
Kopsa Indicated   0.5 AuEq 2,200,000 0.70 0.15 2.08 50,000
Kopsa Inferred   0.5 AuEq 2,700,000 0.80 0.20 2.57 69,000

 

Relevant Technical Report

A NI 43-101 Technical Report titled “Preliminary Economic Assessment for the Kopsa Copper-Gold Deposit, Finland” and dated 2nd October, 2013 is filed on SEDAR 

Qualified Persons

The results disclosed here are based upon the PEA study “Preliminary Economic Assessment for the Kopsa Copper-Gold Deposit, Finland” which includes an updated Mineral Resource Estimate. The PEA and Mineral Resource Estimate were prepared under the supervision of Johan Bradley (MSc, FGS CGeol, EurGeol) Principal Geologist and Managing Director of SRK Consulting (Sweden) AB; and Dr Mike Armitage (BSc, MIMMM, FGS, CEng), Group Chairman and Corporate Consultant (Mining Geology), SRK (UK) Ltd., who are fulfilling the role of Independent Qualified Persons as defined in Sections 1.1 and 1.5 of National Instrument 43-101

Data Verification

In order to independently verify Belvedere’s drill database, during the site visit, Johan Bradley (QP) carried out:

  • An inspection of several drill collars at the Kopsa site to confirm location of these;
  • Drill core inspection of nine Belvedere holes with good spatial representation across the deposit, cross-checking geology, mineralization, sample interval and sample numbers against the Company’s drill database; and
  • Collection of 44 coarse reject samples for check assaying. These samples were selected by SRK on the basis of their spatial and temporal representivity.

The number of collars located in the field, drill cores reviewed and check samples selected for assay by the QP represents a small proportion of the overall number of drill collars and analysis carried out on the Project as a whole. Notwithstanding this, no material errors were found during the course of these checks, adding to SRK’s confidence in Belvedere’s drillhole database and the repeatability of the assay methods used.

Further Information Relating to Mineral Resource Estimate

SRK created a geological model based on a statistical review of the validated drillhole data. Two domains were outlined by SRK – an Au-rich and a Cu-rich domain. These domains were created based on statistical grade breaks with a 0.08% Cu, and 0.2 g/t Au cut-off being utilised to delineate the domains. It was not possible to model the individual high-grade Au veins due to the current drill spacing and nature of the mineralization.

A 2 m composite file was used in a geostatistical study (variography and quantitative kriging neighbourhood analysis - QKNA) that resulted in ordinary kriging (OK) being selected as the interpolation method. The interpolation used an elliptical search following the predominant dip and dip direction of the geological domains. The results of the variography and the QKNA were utilised to determine the most appropriate search parameters for each domain.

A block model consisting of 10m x 10m x 5m blocks was created, with Au and Cu being interpolated into the model using OK, and Ag, As and S interpolated using Inverse Distance Weighting (IDW). Tonnages were estimated based on a specific gravity (SG) of 2.73 g/cm3, which was determined from 1,650 density measurements within the mineralised zone.

The interpolated block model was validated through visual checks, a comparison of the mean composite and block grades and through the generation of section validation slices. SRK is confident that the interpolated grades are a reasonable reflection of the available sample data.

A pit optimisation exercise was carried out based on assumed operating costs, slope angles, mining recoveries and revenue assumptions derived by SRK during course of the PEA, and was used to constrain the Mineral Resource to that material which SRK considers has reasonable prospect for eventual economic extraction. The Mineral Resource reported for Kopsa was constrained within a Lerchs-Grossman pit shell defined by a marginal cut-off-grade of 0.50 g/t AuEq, a metal price for copper USD 7,865 /tonne and metal price for gold USD 1,508 / oz; overall slope angles of 45° and 50° for the footwall and hangingwall respectively; a mining recovery of 97%; a mining dilution of 5%; mining costs of USD3.5/tonne, process operating costs of USD13/tonne processed material include G&A costs; and a transport cost of USD5.6/tonne.

Gold equivalence (AuEq) calculations were based on using forecast long term metal prices (as above) and assumed recoveries. The following calculation was used to assign AuEq values to each block:

AuEq (g/t) = 0.982830*Au (g/t) + 1.672011*Cu (%)

The Qualified Persons are not aware of any environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues that would preclude the reporting of the Mineral Resource given here.

 

Further Information Relating to PEA

SRK has utilised a number of assumptions for the purposes of the PEA. Full details will be provided in the Technical Report to be filed on SEDAR. The main assumptions are summarised below.

 

Item  

Unit

Base Case
Gold Price  

USD/troy oz

1,200

Copper Price  

USD/tonne

6,000

Silver Price  

USD/troy oz

20

Discount Rate    

8%

RoM Production  

tpa

1,200,000

Delivery to Plant    

420,000

Sorting Loss

Cu

%

25

Au

%

10

Flotation Feed Grade

Cu

%

0.32

Au

g/t

2.34

Copper Concentrate  

tpa

4,800

Cu Rec

%

80

Au Rec

%

40

Cu

%

22.5

Au

g/t

82

Sulphide Concentrate  

tpa

12,600

Au Rec

%

44.75

Au

g/t

35

Cyanidation Recovery

Au

%

95

Recovery to Doré

Au

%

42.5

Overall Recovery

Cu

%

60

Au

%

76.3

 

Table 4: Summary of key assumptions for PEA