Corvus Gold unveils "positive" PEA for North Bullfrog project

Corvus Gold (TSE:KOR)(OTCQX:CORVF) Tuesday unveiled an independently prepared Preliminary Economic Assessment (PEA) for its North  Bullfrog project in Nevada.
The PEA produced a robust positive economic analysis for a conceptual, low capex, heap leach project that generates an average annual gold production of 57,700 ounces over 12.8 years, indicating a pre-tax, pre-royalty net present value of $118.3 million and an internal rate of return of 28.8 percent at a $1,300 per ounce gold price and a five percent discount rate.
Corvus Gold, a resource exploration company, focused in Nevada, Alaska and Quebec, said that the PEA also shows the project has a considerable leverage to gold price, with a pre-tax, pre-royalty net present value of $338 million and an internal rate of return of  a whopping 70 percent at a $1,700 per ounce gold price.
Total initial capital expenditure is seen at $68.8 million with a 2.6-year payback period for the project, which has a large in-pit resource  of 1.1 million ounces contained and 747,000 ounces of recoverable gold.
Corvus Gold chief executive Jeffrey Pontius said: "These initial results are impressive and reinforce the potential for creating a new Nevada gold producer.
"The low cost project linked with a low initial capex, attractive start-up phase, a favourable permitting environment, excellent  infrastructure and available labour force, significantly de-risk this prospective project.
"With recent successes in our step out and high-grade drilling project we see this initial positive PEA as a critical first step in  developing what we believe will be one of Nevada's next gold mines."
Speaking to Proactive Investors, Corvus Gold's investor relations executive Ryan Ko said: "We are currently following up on further step out drilling and follow-up drilling of the higher grade Yellowjacket zone.

"Our recent success as shown on our step out hole reported on Feb.13, 2012 shows the potential of the North Bullfrog deposit to be much greater.

"It is important to note that our PEA is based on the current resource estimate reported in October 2011 and does not include any results of the 2012 drill program."

In terms of Corvus Gold's other projects, Ko said that the company was concentrating on Nevada since it was winter in Alaska and Quebec.

"Closer towards the spring we will be drawing up plans and coordinating with our JV partners on the Alaska and Quebec properties for the 2012 summer exploration program, but for now we are concentrating 100% on our Nevada, North Bullfrog project as we continue to add shareholder value."

Ko said that the company was currently well funded. In November 2011, Corvus Gold said it had $5.2 million in cash.
Corvus controls 100 percent of its North Bullfrog project, which covers approximately 43 square kilometres in southern Nevada just north of the historic Bullfrog gold mine formerly operated by Barrick (TSE:ABX)(NYSE:ABX).
The property package is made up of a number of private mineral leases of patented federal mining claims and 161 federal unpatented mining claims. The project has "excellent infrastructure", the company said, being adjacent to a major highway and power corridor.
North Bullfrog currently includes numerous prospective gold targets with four - Mayflower, Sierra Blanca, Jolly Jane and Connection  - containing an NI 43-101 compliant estimated indicated resource of 24 million tonnes at an average grade of 0.29 grams per tonne (g/t) gold for 224,400 ounces of gold.
These same four targets hold an additional inferred resource of 468 million tonnes at 0.19 g/t gold for 2,835,000 ounces of gold  (both at a 0.1 g/t cutoff), with appreciable silver credits.
Corvus Gold said that the PEA envisages average production of 70,000 ounces of gold per year over the first three years, with total cash operating costs of $815 per ounce gold with an average of $673 per ounce gold over the first three years.
The company added that it saw potential for significant resource expansion with an ongoing drill program, as highlighted with recent success in a 400 metre step out hole that returned 52 metres of 0.8 g/t gold earlier this month.
Indeed, these were the first results from its 2012 exploration drilling program at North Bullfrog. Corvus said the results confirmed historical drilling in this resource expansion target area.
The company has also recently added approximately 25 square kilometres to its North Bullfrog project by staking 312 federal mining claims, bringing the land package to approximately  50 square kilometres.
The PEA is based on the North Bullfrog in-situ resource model, which consists of material in both the indicated and inferred classifications. This initial stage PEA does not include any of the additional geologic data produced in the current drilling  program, which began in January, 2012, the company added.