Lahontan Gold Announces Positive Preliminary Economic Assessment for Santa Fe

TORONTO ON / ACCESSWIRE / December 11, 2024 / Lahontan Gold Corp. (TSXV:LG)(OTCQB:LGCXF) (the "Company" or "Lahontan") is pleased to announce results from a positive Preliminary Economic Assessment ("PEA") on its flagship Santa Fe Mine gold-silver project located in Nevada's prolific Walker Lane Trend. The PEA was prepared by Kappes, Cassiday & Associates ("KCA") of Reno, Nevada with mine planning and production scheduling contributions from RESPEC Company LLC ("Respec"), Reno, Nevada and mineral resource estimation by Equity Exploration Consultants Ltd. ("Equity"), of Vancouver, British Columbia, in accordance with Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101").

PEA Highlights:

• Pre-tax Net Present Value at a 5% discount rate ("NPV⁵") of US$265.1 M with a 41.0% IRRwith an After-tax NPV⁵ of US$200.0 M with a 34.2% IRR utilizing a $2,705/oz gold price and a $32.60/oz silver price ("spot metal prices") (see spot metal price to base case metal price comparison in Table 1).

• Total Life-of-Mine ("LOM") Pre-tax net cash flow of US$373.3 M and After-tax net cash flow of US$288.9 M over a nine-year project life using spot metal prices.

• Total projected LOM revenue of US$930.8 M over a nine-year project life using spot metal prices.

• LOM strip ratio of only 1.54 (waste to mineralized material ratio).

• Estimated pre-production capital costs of US$135.1 M including a 20% contingency, with a payback of 2.9 years using spot metal prices.

Kimberly Ann, Lahontan Gold Corp Executive Chair, CEO, President, and Founder commented: "Lahontan is very excited about the results of the PEA: a low-capex, highly profitable mining project with a quick payback certainly bodes well for the future of Lahontan and all stakeholders. There is considerable potential to expand gold and silver resources, therefore this is just the first step in restarting mining operations at Santa Fe. With mine permitting well under-way, targeting a 2026 mine ground-breaking, the potential for the Company to realize the economic outcomes outlined in the PEA is very real, especially given current trends in gold and silver prices. Continued optimization of the mine plan, resource expansion drilling, and refining the metallurgical flow sheet are planned for 2025, in parallel with our permitting activities."

The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Company has not defined any Mineral Reserves at the Santa Fe Mine project.

Economic Sensitivities
Sensitivity of the project economics to metals prices is shown in Table 1, showing the base case metal prices used for the PEA, as well as a low case, a high case and the spot case.

Table 1: Santa Fe Project 2024 PEA Economics

(1) As of December 10, 2024

(2) NCF means net cash flow

(3) NPV⁵ refers to net present value at 5% discount rate

(4) IRR means internal rate of return

(5) Pre-production capital, excluding sustaining capital

Capital Costs
Capital costs for the project are summarized in Table 2. Capital costs associated with the mining operation were estimated by RESPEC and based on mining by contractor. Pre-stripping costs were based on the operating costs discussed below. Capital costs associated with processing such as crushing, heap leaching and metal recovery, along with support and infrastructure costs associated with laboratory, water and power distribution and general site services were estimated by KCA. Reclamation and closure costs of $12.5 M were estimated by KCA.

Table 2: Project Capital Costs

1. Working capital is credited in Year 9

2. Values are rounded and may not sum perfectly

Operating Costs
Operating costs for the project are summarized in Table 3. Mining operating costs were estimated by RESPEC and based on estimated anticipated equipment hours and personnel requirements at a 25% markup for contractor rates. The off-road red-dye diesel fuel price in this estimate was assumed to be $0.74/L. All other operating costs were estimated by KCA and based on first principles on certain components where possible, such as reagent and power consumption, along with benchmarking with similar operations for other components, such as labor, maintenance and discretionary expenses

Table 3: Project Operating Costs

(1) Values are rounded and may not sum perfectly

Mine Production Schedule
The PEA mine production schedule includes mining of leach material and waste for the Santa Fe, Calvada, Slab, and York deposits. Leach material was assumed to be sent to a centralized crushing plant and then stacked on a leach pad and the waste material was sent to designed waste rock storage facilities (WRSF) or used as partial backfill into the Calvada pit.

Because the Santa Fe Mine is a brown-field project, minimal pre-stripping is required to develop sufficient stockpiles to feed the crusher. The mine production schedule requires 2 months of preproduction which begins in the Santa Fe deposit. The Calvada deposit is started in year 2 and mined concurrently with Santa Fe. Calvada mining is followed by mining of Slab and York deposits.

The process schedule was developed with a ramp up of production from year 1 through year 3 to a full 4.56 million tonnes per year. Table 4 shows the process production schedule.

Table 4: Projected Production Summary

1. Equivalent gold calculation is based on base case metal prices

2. Residual leaching production only

3. Values are rounded and may not sum perfectly

Table 5 shows the key production parameters for the mine and processing units used in the generation of the production and cash flow profiles.

Table 5: Key Mining and Processing Production Parameters