MRE & PEA Completed For The Tonopah Gold Project

VANCOUVER – Viva Gold Corp reported on the updated Mineral Resource Estimate (MRE) and Preliminary Economic Assessment (PEA) for the Tonopah Gold Project. Tonopah is located about 20 minutes’ drive from the town of Tonopah, Nevada.

The updated MRE reports measured and indicated (M) Mineral Resource containing 504,000 ounces gold (Au) at 0.59 grams per tonne (g/t Au, 1.8 million ounces silver (Ag) 2.05 g/t Ag, and an inferred Mineral Resource of 83,000 ounces Au at 0.37 g/t Au, 402,000 ounces Ag, at 1.81 g/t Ag, all constrained within a pit shell above a 0.15 g/t Au cut-off.  Life of mine (LOM) PEA production of 23.5 million tonnes of Mineral Resource; consisting of 4.5 million tonnes at an average grade of 1.75 g/t Au and 3.35 g/t Ag as mill circuit feed; and 19.0 million tonnes at 0.37 g/t Au and 1.69 g/t Ag to the heap leach; at a strip ratio of 3.9 tonnes of waste per tonne of mineralized material.  

Average mill circuit gold recoveries of 93% Au, 37% Ag, and heap leach Au recoveries of 75% Au, 14% Ag, to produce a total of 404,000 ounces of payable Au and 354,000 ounces of Ag over a seven-year mine life with an additional year of residual Au/Ag recovery from the heap leach. After-tax net present value (NPV) at a 5% discount rate (NPV5%) of $111.6 million at a gold price of USD$2,400 per ounce($27.70 Ag increasing to $363.6 million at a gold price of $3,200 per ounce ($36.93 Ag).      

After-tax Internal rate of return (IRR) of 17.6% at a gold price of $2,400 per ounce increasing to an IRR of 43.4% at a gold price of $3,200. After-tax payback period of 3.6 years from commencement of production at $2,400 per ounce Au, decreasing to 1.8 years at an Au price of $3,200 ($36.93 Ag).

Average production cash costs of $1,164 per ounce of Au and All-In Sustaining Cost (AISC) of $1,269 per ounce Au.  Pre-production capital expenditure of $219.9 million, $22.2 million in working capital, and additional LOM sustaining capital of $70.4 million including purchase of mine fleet under capitalized lease/purchase terms. New equipment pricing is assumed at this phase of work.  

“This detailed PEA of the Tonopah Gold Project demonstrates significant leverage to the price of gold and displays accretive potential value when compared to Viva’s current market capitalization”, states James Hesketh, President & CEO. “The Tonopah gold project represents a unique opportunity to develop a gold project in one of the best mining jurisdictions in the world with excellent existing infrastructure and proximity to surrounding producers and metallurgical facilities. This location reduces infrastructure capital and can help to accelerate the permitting process. Opportunity may exist to defer or reduce initial capital expense through toll processing/milling, purchased of used equipment, or through contract mining with competitive bidding versus owner mining operations. We also believe that a unique permitting environment exists in the US and Nevada and Viva intends to accelerate feasibility study on Tonopah which will allow Viva to initiate the permitting process to take advantage of that window. In addition, while Viva’s focus is on advancing its core gold resource through feasibility and permitting, we remain convinced that substantial exploration potential remains in and around our project area, which we can demonstrate from existing drill results”.