Overview

The Toroparu Project is situated in the highly prospective Upper Puruni River Region of western Guyana and contains one of the largest undeveloped gold/copper projects in the Americas.

The Guiana Shield, the northern half of the Amazonian Craton, underlies the eastern part of Venezuela, Guyana, Surinam, French Guyana, and parts of northern Brazil. The Toroparu project lies amongst other pre-existing mineral deposits and significant gold deposits within the Guiana Shield in South America.

GCM Mining’s 100% controlled Upper Puruni Concession contains 53,283-hectare(s) of mineral leases located in the Cuyuni-Mazaruni Region (Region 7) of Western Guyana.

The region’s hilly terrain is accessible by air and road. Facilities at Toroparu include a 150-person camp and 2,500-foot all-weather airfield.

Toroparu is currently accessed overland via the 230- km Itiballi-Puruni-Papishao Landing Road, which was rehabilitated by Gold X in 2003, and is a major corridor for both western Guyana and one of its important gold producing areas.

GCM announced results from its 2021 drill program at Toroparu on July 16, 2021. The discovery of the structural control of high-grade gold mineralization at Toroparu has reaffirmed GCM’s confidence in the potential value of this project as one of our cornerstone assets. The recently completed, two-phase diamond drill program comprised a total of 20,750 meters in 114 drill holes and has confirmed a 4-kilometer strike length of high-grade structurally controlled gold mineralization. Additionally, the program identified a repeated pattern of intersections of NW-SE and E-W oriented sub-vertical structures containing high-grade zones extending over mineable widths up to 100 m vertically (“jewelry boxes”) that support our belief that a high-grade resource amenable to underground mining methods lies at the core of this very large, disseminated gold deposit.

Preliminary Economic Assessment (PEA)

Life-of-Mine Results

Mine life

24 years

Revenue

US$8.0B

Gold production

5.4 Mozs

Operating Margin

US$3.5B

Silver production

2.5 Mozs

Sustaining Capex

US$944M

Copper production

141.3 Mlbs

Free Cash Flow

US$1.7B

Cash cost/oz

US$742

After-tax NPV (5%)

US$794M

AISC/oz

US$916

IRR

46%

Initial Capex

US$355M

Payback

2 years

  • Source: GCM Mining press release dated December 1, 2021.
  • PEA prepared by Nordmin/SRK has an effective date of November 26, 2021.
  • Revenue is based on long-term gold and silver prices of US$1,500 and US$20.22 per ounce, respectively, and US$3.13 per lb for copper. Silver and copper revenues are treated as by-product credits in cash cost/oz and AISC/oz data.
  • Revenues reflect the terms of the Precious Metals Purchase Agreement with Wheaton Precious Metals International Ltd.(“WPMI”) whereby WPMI will purchase 10% of the gold and 50% of the silver production in exchange for up-front cash deposits totaling US$153.5 million and over the life of the Toroparu Deposit will pay US$400/oz for gold delivered and US$3.90/oz for silver delivered, both of which are subject to increases of 1% in future years.

The December 2021 Preliminary Economic Assessment (PEA) affirms the economic viability of the open pit and underground mining operations at the Toroparu Project.

Highlights from December 2021 PEA include:

  • Total life-of-mine (“LoM”) gold production of 5.4 million ounces (“Mozs”) representing 88.4% of the 6.2 Mozs of gold fed to the milling circuit at an average grade of 1.78 g/t Au over the 24-year mine life.
  • Open pit mine operations will deliver 93 Mt of potential mill feed (“PMF”) over the LoM and underground mining operations, which commence in year 10, will deliver an additional 14 Mt of PMF.
  • Average annual gold production of 225,000 ounces over the 24-year mine life. During the first two-year payback period, gold production averages 254,000 ounces per year and over the first 9 years of surface-only mining, gold production averages 202,000 ounces per year. With the commencement of underground mining in year 10, annual gold production from open pit and underground increases to an average of 239,000 ounces over the remaining 15 years of the LoM.
  • Initial capital cost, to be incurred from 2021 through 2023, totals US$355 million, of which US$138 million will be funded by deposits under a Precious Metals Purchase Agreement (“PMPA”) with Wheaton Precious Metals International Ltd. (“WPMI”) and the balance by the net proceeds of the Senior Notes financing closed in August of this year.
  • Processing capacity will be built in two phases with an initial Phase I nominal capacity of 7,000 tpd (2.55 Mtpa) in a gold leach plant based on gravity and carbon-in-leach circuits (“CIL”) and increasing in year 6 to 14,000 tpd (5.1 Mtpa) in Phase II with the construction of a copper concentrator based on gravity and copper flotation circuits. The copper concentrator will facilitate the recovery of 141.3 million pounds (“Mlbs”) of copper over its 19 years of operation.
  • The PEA delivers solid financial results with LoM total revenue of US$8.0 billion, US$3.5 billion of operating margin and US$1.7 billion of after-tax Free Cash Flow. The LoM PEA financial results are based on long-term prices of US$1,500/oz gold, US$20.22/oz silver and US$3.13/lb copper.
  • Gold and copper account for approximately 94% and 5.5%, respectively, of total revenue over the LoM.
  • LoM cash cost of US$742/oz and LoM all-in sustaining cost (“AISC”) of US$916/oz.
  • The PEA estimates a US$794 million after-tax NPV 5% (net present value at a 5% discount rate), a 46% IRR (after-tax Internal Rate of Return) and a two-year after-tax payback of the initial capital cost of the Project.

The news release announcing the PEA and updated Mineral Resource Estimate can be found here.

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Mine Plan

The Project is comprised of two deposits: the Toroparu Deposit (located near the main camp) and the Sona Hill Deposit (located ~5 km southeast of the Toroparu Deposit). The mine plan considered in the PEA commences with open pit mining and we plan to execute the mine plan outlined in the PEA in phases, commencing initially with construction of the Phase I surface mine and the 7,000 tpd gold leach process mill. A conventional truck-shovel method was considered for the open pit portion of the Toroparu Deposit, as shown in the images below. The open pit analysis results in several distinct open pits coalescing into the NW and Main Toroparu Pits over time. The Sona Hill and Southeast Zone (SE) will be developed in a similar fashion beginning in year 3 and 6 respectively.

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Open pits, long section view (looking Northeast)

Underground development will commence at the beginning of the ninth year of open pit operation and targets 3,500 tpd, ramping up to full production over an approximately two-year period.

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Underground long section view (looking northeast)

A Skilled and Experienced Workforce

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Guyana’s network of skilled workers comes from the country’s strong educational system, and its well-established gold and bauxite mining sectors. An experienced team of Guyanese equipment operators, maintenance personnel, and administrative staff have been employed since 2000. The team has not only run efficient gold mining operations and extensive exploration programs on the Upper Puruni River Concessions, they have also built the camp, airstrip, rehabilitated 140 km of the access road from Puruni Landing, and constructed over 150 km of on-site roads. In addition, the mechanical, electrical, and other skilled tradesmen have successfully maintained the fleet of mining and road construction equipment for more than 18 years.

Why Guyana

Guyana is an emerging economy with enormous untapped potential, and according to the IMF, is projected to be one of the world’s fastest growing economies. The country’s geographic position at the gateway to the Caribbean and South America, combined with its natural resources, access to key export markets, English-speaking population and affordable labour present investors with profitable opportunities to do business in Guyana. The country is governed by British Common Law and is a member of the Commonwealth of Nations, World Trade Organization and CARICOM (headquarters located in Guyana).