Bralorne Gold Mines States a Potential for a NPV Of $29.7 Million and an IRR of 50.43% if Increased Gold Production in 2012 Technical Report - (Financial Press)

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Bralorne Gold Mines has gone from strong exploration potential to a proven sustainable Gold producer and is now poised to increase production.

Previously reported by Financial Press on June 18th, 2012, when Bralorne Gold Mines released yet another round of high grade Gold drill results on their producing mine, the company has gone from strong exploration potential to a proven sustainable Gold producer and is now poised to increase production. - (Financial Press)

Since 1992 the Company has acquired three major historic Gold producing properties known as the Bralorne, King and Pioneer gold mines and the significant gaps between each of these past producing Gold giants of southwest British Columbia, located near Gold Bridge.

The overall plan for Bralorne is to develop the unexplored gaps between these three historic mines. These mines have a combined historical production of 4.1 million ounces of gold, which is one of the largest and richest producing Gold mines in British Columbia.

“We are in production and we have the potential to produce more significant gold and make lots more money,” says Dr. Matt Ball, Bralorne president and chief operating officer.

The Company has recently engaged a third party engineering firm to do an economic assessment on the Bralorne property and its current operation at a nominal rate of 85 tonnes per day (tpd). The Preliminary Economic Assessment (PEA) evaluation has been completed using a mine life of 4.3 years. Based on present known measured and indicated resources the mine has a life of some five to six years and potentially 14 years if inferred resources are included.

Based on this plan the PEA shows that the Company’s present operations are estimated to have a positive net present value discounted at 5% of $6.4 million using gold prices of US$1650/oz for 2012 and US$1500/oz for succeeding years, thus providing an acceptable return on investment.

Financial Press spoke with Dr. Matt Ball, President and COO of Bralorne, about what his thoughts on the future exploration looks like in his eyes, “In the last year we have had some very high grade drill intercepts which we’re tunnelling out toward. At the end of last year we had a 50 ounce drill hole which was a record for the history of the property, and that’s really good news.” This was reported on November of 2011.

Recent discoveries between the Bralorne and King mines have opened up significant new mineralization near surface which has provided an average grade of approximately 0.26 ounce per tonne. This seems to align closely with the historic grade of 0.5 ounces of gold per ton as reported during the history of their production.

“We are carrying out exploration and looking to expand the mine,” says Dr. Ball. “We’ve proved that we can economically produce gold from it. Now we want to open it up even further.”
The next phase of development is now underway and focused on expanding new zones and continuously stockpiling reserves for the 100 tonne per day and expands to the 250 tpd by 2015.

The best case scenario to increase production to 250 tpd will require an initial capital expenditure of $17.6 million and preliminary schedules indicate that an increase in production could be achieved in year 2015. The overall production schedule covers a 10 year mine life. The mining grade used reflects the average of that produced to date since operations commenced in 2011.

Ongoing capital has been estimated at $10.6 million with average operating costs $223.77/ton mined, equivalent to $932.28/oz gold. The PEA economic analysis for this case shows that the Company is expected to have a positive net present value discounted at 5% of $29.8 million with an IRR of 50.43% based on gold prices of US$1650/oz for 2012 and US$1500/oz for succeeding years.

“Because it’s a start-up operation of 85 to 100 tonnes a day through the mill, we are looking at the possibility of expanding that operation,” says Dr. Ball.

The current Bralorne mill is permitted to operate at a capacity of 500 tonnes per day and can provide greater room for expansion.

“We have to add to the tailings pond, expand the mill and hire more people but those are all the challenges of a mining operation. We still have to re-evaluate most of the historic resources that were left behind. These resources are not being carried on the current inventory until we have opened up the mine and get access to them as they are in storage at this point.”

The 2012 underground drill program has completed a total of 15 holes (1,935 metres) to date.
An expanded program of diamond drilling is planned for 2012, including 5,400 metres of surface drilling and 3,875 metres of underground exploration drilling.

“The main objective of the program is to test for extensions of high grade gold mineralization previously discovered in the area, where underground drifting previously reported results of 68.7 grams of gold per tonne over 0.8 metres along a 160 metre strike length,” says Dr. Ball

“We’ve proven that we can produce gold and now we want to produce more and expand,” says Dr. Ball.

“We’ve done an engineering estimate on the actual money that it will take to expand and we’re going to the market and try and raise the money and do the development with the exploration and expand the gold mine.”

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April Saretsky