Preliminary Economic Assessment Of The Summit Mine And Banner Mill

TORONTO - Galane Gold Ltd. has completed an update of the 2014 preliminary economic assessment (PEA) on the Summit Mine and Banner Mill. Galane has developed a more detailed mine plan for Summit (assisted by a new survey of the underground mine), changed the mining and trucking operations to owner operator, completed a detailed analysis of the plant restart requirements and updated all the operating costs relating to Summit.

Nick Brodie, CEO, said, “Galane Gold’s management team, as they did with our Galaxy property, has worked extensively with the information available to it including several site visits, a review of historical paper records, a re-survey of the Summit mine, and a detailed restart review of the Banner Mill, and has identified efficiency improvements to the previous operations. From this, the Company has built a comprehensive mine plan, robust financial model and a short-term path to production for Summit.

To maximize the return to stakeholders, we have moved to an owner operator model for the underground mining and trucking to the plant, and have increased the size of the plant so that it can produce 100% concentrate as the final product. These are steps we already carried out at Galaxy and therefore we have the right management team available to successfully implement this plan.

The PEA results represent a positive outcome with the all-in sustaining cost of US$864 per ounce placing the operation firmly within our objective of building a gold mining company with low cost operations that can generate positive cash flows through commodity cycles. The current life of Summit is only constrained by the known resource and, as we have done repeatedly at both Mupane and Galaxy, we expect that as we progress, we will extend life at depth through exploration.

We are now progressing conversations with debt providers and potential concentrate off-takers to put a financing package together to restart the operations at Summit as soon as possible and will update the market when appropriate on our progress.”