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TMAC looks ahead to financing
Hope Bay now projected to last 20 years and yield 3.2 million ounces of gold

Karen K. Ho
Northern News Services
Monday, May 4, 2015

In its pre-feasibility study, mineral exploration and development company TMAC Resources said its Hope Bay gold project now has an estimated mine life of 20 years and gold reserves of 3.2 million ounces.

NNSL photo/graphic

Paul Christman, TMAC Mining Engineer surveying for a new drift into a future test stop location at Doris Mine. The company said the mine now has an expected life of 20 years, and its recently completed pre-feasibility study allows it to pursue public financing. - photo courtesy of TMAC Resources

Catharine Farrow, TMAC's chief executive officer, told Nunavut News/North the completion of the pre-feasibility study was key to the company's next step of financing the project.

"You can't issue reserves on a PEA (preliminary economic assessment)," she said.

The TMAC executive expressed excitement about the spring and what was in store in regards to financing. "We are leaning to go public," she said. "We don't have to, we have other options, but we are leaning going public. That continues going forward. We really want to get that done this quarter."

TMAC's goal is to get initial production started in late 2016.

Other highlights from the pre-feasibility study include an estimated 14.3 million tonnes of ore mine, average annual gold production of 160,000 ounces, with peak annual gold production estimated at 218,000 ounces. The study also estimated that the Hope Bay Project will generate a pre-tax internal rate of return of 44 per cent and a post-tax internal rate of return of 40 per cent.

She called the status of the project a huge accomplishment due to TMAC leveraging the work of the previous owners.

"We need that to keep on track for late 2016," Farrow said, "And we're actively working on that."

She cited the project's newly released number of 20 years worth of reserves and the capital already invested in the project.

Farrow also pointed out the importance of the recent 20-year land trade agreement signed with the Kitikmeot Inuit Association (KIA), and Nunavut Tunngavik Inc. (NTI) that also secured mineral rights. "Previous workers had struggled with this a bit," she said.

Farrow called Hope Bay a hybrid project in terms of requirements for construction, since Doris is largely built but newer infrastructure will be added on for the other deposits, Madrid and Boston. As the site has water access, there are lower transportation costs compared to building and trucking on an ice road. However, the company is still tied to the same logistical requirements.

When asked about the impact of the price of gold and the falling Canadian dollar, Farrow acknowledged commodity prices were a huge factor in a project's profitability.

The price of gold at press time was $1,183.63 USD, though the pre-feasability study was based on a price of $1,250 USD.

However, Farrow said the pricing of gold in U.S. dollars had actually benefited her company.

"Almost all the money we spend is Canadian dollars, but almost all the money we're paid is in American dollars," she said. "So it actually works out okay."

And while media interest in the precious metal has recently surged due to the frenzy surrounding the sale of the gold Apple Watch (top price of $22,000 USD), Farrow said luxury items like that didn't actually have much of an affect on global demand. "The real drivers are sovereign wealth, rainy day stocks and gold (exchange-traded funds) ETFs."

She also referenced the markets in India and China where gold is still seen as an important investment and carries a sense of prestige among buyers.

The company also recently won the Murray Pike award at the Nunavut Mining Symposium.

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