Vancouver, British Columbia, December 13, 2021/CNW/-Tarachi Gold Corp. (CSE: TRG) (OTCQB: TRGGF) (Frankfurt: 4RZ) ("Tarachi" or "Company") is pleased to announce that the company is in Preliminary Economic Assessment ("PEA") of the Magical Mill and Tailings Project ("Magistral" or "Magistral Project") in Durango, Mexico.
PEA was completed by Ausenco Engineering Canada Inc. (Ausenco) and provided an attractive initial economic case for the development of local projects. PEA is based on updated mineral resource estimates, which are also included in the PEA report and completed by AGP Mining Consultants (AGP) in Canada. The report outlines a potentially low capital expenditure, low operating cost and low environmental impact tailings reprocessing operation that can be put into production within a 12-month time frame.
The current mine plan contains approximately 89% of measurement and indication resources, but management believes that more tonnage may be removed from the remaining tailings to extend the life of the mine. The company is also seeking to acquire other local tailings materials, which may be processed in the district court and ultimately extend the cash-generating life of the assets.
President and CEO Cameron Tymstra commented: "We are very satisfied with the results of Magical PEA. This report confirms our previous expectations for the project, as it is likely to generate a large amount of free cash flow for Tarachi in a short period of time. The capital investment. This project will enable us to provide self-financing for future exploration plans for our projects in Mexico and help reduce the risk of future shareholder dilution.
Not only does this represent an opportunity to make Taraki a gold and copper producer in Mexico, but it also cleans up and repairs a legacy tailings yard while doing so. We will mainly excavate materials contaminated with mercury and other metals from the backyard of the district court community, remove these metals, and store tailings in a designed and licensed tailings storage facility. Without the need to mine waste or crush and grind plant feed, we hope that the environmental footprint and carbon emissions per ounce of gold produced from Magistral are much smaller than that of the typical gold industry.
Adding a SART (sulfurization, acidification, recovery and concentration) plant to the process will reduce our operating costs and improve our environmental conditions. By recycling at least 70% of the cyanide used for leaching, it will also produce high-grade copper concentrates in the following ways Mine: product. With PEA now completed and there is a clear production path, we will fast track the development of Magistral in the new year. "
Table 1 summarizes the key economic indicators of the project, and Table 2 summarizes other indicators and assumptions used in PEA.
Readers are reminded that the preliminary economic assessment is preliminary in nature. It includes inferred mineral resources that are considered geologically too speculative to apply economic factors to them so that they can be classified as mineral reserves, and it is uncertain whether PEA will be realized. Mineral resources that are not mineral reserves have not shown economic viability.
Basic situation price (1600 USD/oz gold)
Spot price December 7, 2021 (US$1783 per ounce of gold)
Table 2-Other project indicators and assumptions
Average resource grade (g/t Au)
Average dilution head grade (g/t Au)
Average annual gold production (ounces)
Peak annual gold production (ounces)
Total gold equivalent recovered (ounces)
Initial capital requirement (millions of dollars)
Total maintenance cost (USD/oz gold)
Annual free cash flow before tax (US$ million)
Annual free cash flow after tax (US$ million)
The tailings material included in the mineral resource estimate is located near Magistral's existing processing facilities. The tailings will be mined using a Cat 330D class excavator and two 20-ton dump trucks to transport the material to the mill. The average one-way truck transportation distance is estimated to be only 250m to the factory. The material will be dumped into a 24-hour storage warehouse and fed into the hopper using a front-end loader. The tailings will be delivered to the factory at a rate of 1,000 tons per day.
Metallurgical testing work completed earlier in 2021 showed that 83% of the gold in the tailings material can be leached within 12 hours without additional grinding (see press release on November 2, 2021). PEA uses a global gold recovery rate of 80.7%. The project will make maximum use of the existing 1,000 tpd leaching facility, which was built in 2018. The existing facilities (Figure 1) include a ball mill, a primary feed thickener, four stirred and leaching tanks with leaching capacity. 1,000 tons/day of tailings will last 16 hours at a slurry density of 40%. Countercurrent decantation (CCD), tailings cyanide destruction and Merrill Crowe recovery loop.
Ausenco has identified some modifications and additions to existing facilities. Once implemented, it is expected to achieve gold recovery rates similar to those seen in PEA metallurgical testing work, reduce cyanide consumption, produce copper concentrate by-products, and improve final products The quality of Jindorei.
The feed will be processed in the existing factory, by refurbishing existing equipment and adding new equipment, including SART loops, gold chambers and oxygen generating devices. The process includes grinding, leaching, SART and Merrill Crowe to produce two final products (Figure 2). The Merrill Crowe circuit will produce gold plating, and the SART circuit will produce high-grade copper-silver deposits.
The average feed grade is expected to be 1.87 g/ton gold, 3.1 g/ton silver and 0.17% copper. The total plant recovery rates of gold, silver and copper are estimated to be 80.7%, 68.4% and 46.2%, respectively.
It is estimated that approximately 89% of recovered gold will be reported to the Merrill Crowe sediments, where it will be smelted on-site into doré and sold to refineries. The remaining 11% of the recovered gold, most of the recovered silver, and recovered copper will be reported to SART sediment for sale as a high-grade (approximately 60% copper) copper concentrate with gold and silver credits.
Table 3-Expected metal production
Gold equivalent (ounce)*
The output of gold equivalents is calculated using US$1,600/ounce of gold, US$22/ounce of silver and US$3.40/lb of copper.
The initial capital of US$11.1 million will be used in the first year (one year before production) to install new equipment in the processing plant and restart the existing geomembrane-lined tailings storage facility (TSF) and infrastructure. It also includes project indirect costs, owner costs and emergency expenses.
Table 4-Breakdown of Capital Expenditure by Region
Total indirect, project delivery, owner cost (USD)
Total direct, indirect, project delivery, owner cost (USD)
Continuous funding of 2.1 million USD will be spent during the LOM period. Sustainable capital includes mining, TSF and water management. Since there is no need to strip waste, all mining costs except infrastructure costs will be incurred in the first year of the same year of production.
Table 5-Continuous capital expenditure breakdown by region
Assume that the owner uses leased equipment to complete the mining. Mining costs are based on local labor prices and equipment rentals.
Processing and G&A costs
Ausenco developed the processing cost based on first principles. The largest component of estimated operating costs is the consumption of cyanide, lime and other reagents in the processing plant.
The G&A cost estimate is based on a small administrative office on site. The project is close to the towns of Magical del Oro (population 200) and Santa Maria del Oro (population 5,000), so on-site camps are not required. It is expected that labor will be sourced locally from these communities.
Table 6-Operating cost breakdown
In addition to the costs listed in Table 6, this operation will also incur tailings lease fees for some tailings materials to be mined, which will be paid in tonnage at the time of mining. These costs are expected to average US$4.69/ton on LOM, and the price of gold is US$1,600/ounce. The company can obtain mineral resource estimates and tailings materials included in the mine plan through a combination of ownership and exclusive lease rights, as shown in Table 7.
Table 7-Tailings Lease Fee Table
Rate per ton ($1600/oz Au)
According to an exclusive agreement with Minera Rio Tinto, the price is $1.40/ton, which will be paid at the time of mining.
According to an exclusive agreement with Ejido Magistral, payment is made at the time of mining. The benchmark rate is US$5.50/ton, and the price of gold increases by US$100/ounce by more than US$1,500/ounce, plus US$1.00/ton.
Total tailings in the mine plan
LOM The average cost per ton of tailings sent to the factory.
Excluding copper and silver credits, cash operating costs including lease fees are estimated to be US$648 per ounce of gold, and the total maintenance cost (AISC) is US$705 per ounce of gold.
The mineral resources of this project are reported in the bound shell at 0.50 g/ton Au cut-off grade. The mineral resources are summarized in Table 8. The resource classification is defined by the CIM Definition Standard for Mineral Resources and Mineral Reserves approved by the CIM Council. The effective date of mineral resources is November 15, 2021.
Table 8-Estimated Mineral Resources of Magistral Tailings
Mineral resources that are not mineral reserves have not shown economic viability.
The critical value applied is 0.5 g/ton of gold.
Due to rounding, summing errors may occur.
Mineral resources are reported in an optimized constrained shell.
The block matrix is 10m x 10m x 5m (no rotation).
Use OK interpolation to estimate the block; no upper level limit is applied.
The density of the sediment is specified as 1.7 g/cm3.
The borehole database used for mineral resource estimation includes 37 boreholes and 178 analyses. The bulk density measurements are collected during drilling activities, and only samples with 100% recovery are used for calculations. The median bulk density of 1.70 is used to estimate the mineral resources of the tailings deposit. Model the deposit using a block size of 10x10x5m. The resource classification parameters of the measured, indicated and inferred resources can be found in Table 9.
PEA is preliminary in nature and includes inferred mineral resources that are considered geologically too speculative to be economically considered, so that they can be classified as mineral reserves, and it is impossible to determine whether PEA will be realized. Mineral resources that are not mineral reserves have not shown economic viability.
The work done during the PEA preparation period outlines many opportunities that have the potential to improve project economics and ESG performance:
Tailings samples are selected by the company's geologists, and each sample is placed in a plastic bag. Sample tags are inserted into each bag, then sealed and stored in a safe area of the campsite. After the project is completed, the samples will be transported directly by company trucks to Tarachi's safety facility in Hermosillo, Mexico, and then shipped to Canada.
All 178 samples from the 37 completed vertical auger holes were shipped to Activation Laboratories Ltd. in Kamloops, British Columbia, Canada for sample preparation and analysis. 30 grams of gold in each sample was analyzed by Fire Assay Fusion and AA (atomic absorption complete), 0.5 grams of each sample was digested by Agua Regia, and then analyzed by ICP with 38 element kits. Activation Laboratories is accredited and/or certified by ISO/IEC 17025:2017 and ISC 9001:2015.
As part of the company’s quality assurance/quality control agreement, reference samples including certified reference samples, duplicates, and blank control samples are systematically inserted into the sample stream and analyzed.
The remaining samples were then transported to Base Metallurgical Laboratories, also located in Kamloops, to complete all required metallurgical studies.
Tarachi Gold is a junior gold exploration company listed in Canada, focusing on exploration and development projects in Mexico. Tarachi acquired the Magical Mill and tailings project in Durango, Mexico in 2021. Magistral includes a 1,000 tons/day factory and a tailings deposit with a measured and indicated resource of 1.26 million tons and a grade of 1.93 g/ton gold. The company expects the asset to be put into production in early 2023.
The company is also exploring 3,708 hectares of promising mineral concessions in the Sierra Madre gold belt in Sonora, Mexico, near the Muratos Mine of the Alamos Gold Mine and the La India Mine of Agnico Eagle.
Ausenco is a global company with 26 offices in 14 countries/regions and projects in more than 80 locations around the world. Ausenco combines deep technical expertise with a 30-year track record to provide innovative value-added consulting research, project delivery, asset operation and maintenance solutions for the mining and metal industry sectors.
The PEA of the company’s Magical project summarized in this press release was completed by Ausenco with the support of AGP. A complete technical report supporting PEA will be prepared based on NI 43-101 and will be submitted to SEDAR within 45 days of the issuance of this press release. Lorne Warner, P.Geo, Vice President of Exploration and Company Director is a qualified person as defined by National Instrument 43-101 and has reviewed and approved the scientific and technical disclosures in this press release.
Special note regarding forward-looking statements
This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" under applicable Canadian securities laws. This press release uses "expected", "believe", "estimated", "anticipated", "target", "plan", "forecast", "may", "will", "may", "schedule" and similar Words or expressions that identify forward-looking statements or information. These forward-looking statements or information involve, among other things: future exploration plans, development of mining assets, acquisition of additional resources, future production, future cash flow and completion of drilling; and receiving laboratory results.
Forward-looking statements and forward-looking information related to any future mineral production, liquidity, completion of reports and research, Tarachi's value and capital market overview, the future growth potential of Tarachi and its business, and future exploration plans are based on management's Reasonable assumptions, estimates, expectations, analyses and opinions. These assumptions, estimates, expectations, analyses and opinions are based on management’s experience and views on trends, current conditions and expected developments, and management believes that they are relevant and reasonable under the circumstances Other factors, but may prove to be incorrect. Assumptions have been made about the prices of silver, gold and other metals; the severity of the COVID-19 pandemic has not escalated; the cost of exploration and development; the estimated cost of exploration project development; Tarachi’s ability to operate in a safe and efficient manner and with reasonable The conditions for the ability to obtain financing.
These statements reflect Tarachi’s current views on future events and are necessarily based on many other assumptions and estimates. Although management believes these assumptions and estimates are reasonable, they are essentially subject to major business, economic, competition, political and social uncertainties. And the impact of emergencies. Many known and unknown factors may cause actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements or forward-looking information. Tarachi has made a decision based on or related to many of these factors. Assumptions and estimates. These factors include, but are not limited to: the company’s reliance on a mineral project; fluctuations in the price of precious metals; risks associated with the company’s mining activities in Mexico; regulatory, consent or allowable delays; risks associated with reliance on the company’s management team and external contractors; Mineral resources and reserves risks; the company cannot obtain insurance covering all risks on a commercially reasonable basis or at all; currency fluctuations; the risk of not being able to generate sufficient cash flow from operating activities; risks related to project financing and equity issuance; The risks and unknowns inherent in all mining projects, including inaccuracies in reserves and resources, metallurgical recycling, and capital and operating costs of such projects; competition for property ownership, especially undeveloped property; laws and regulations governing environment, health and safety Regulations; the ability of the communities where the company operates to manage and respond to the impact of COVID-19; the economic and financial impact of COVID-19 on the company; operational or technical difficulties related to mining or development activities; employee relations, labor disputes or inability to work; The interaction between surrounding communities and artisanal miners; the company’s ability to successfully integrate acquired assets; the speculative nature of exploration and development, including the risk of reserves or grade reduction; stock market fluctuations; conflicts of interest between certain directors and senior staff; corporate shareholder liquidity Insufficiency; litigation risk; and factors identified under the heading "Risk Factors" in Tarachi’s management discussion and analysis. Readers are cautioned not to attribute excessive certainty to forward-looking statements or forward-looking information. Although Tarachi has tried to identify important factors that may cause the actual results to differ materially, there may be other factors that make the results unpredictable, estimated or expected. Except as required by applicable law, Tarachi does not intend and does not undertake any obligation to update these forward-looking statements or forward-looking information to reflect changes in assumptions or changes in circumstances or any other events that affect such statements or information.
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