Advancing Toroparu to Production

Toroparu Gold Project

Project Overview

A Large Gold Resource in an Established Mining Jurisdiction

One of the world's largest undeveloped reserve and resource, the Toroparu Gold Deposit is situated in an under-explored portion of highly prospective region, and is rife with the potential to grow even larger.

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Country Border
Province Border
Gold Mine
Bauxite & Manganese Mine
Hydro Project
Property Boundary
Waterfall
Road

The Toroparu Gold Project contains one of the world's largest undeveloped in-situ gold deposits owned by a junior mining company. Located within Sandspring's 62,603-hectare mineral concession in the Upper Puruni River Region of western Guyana, Toroparu's flat terrain is easily accessible by air and road. A pre-feasibility study completed for the Toroparu Project in 2013 at US$1400/oz gold outlined the design of an open-pit mine producing 228,000 ounces of gold per year over an initial 16-year mine life. The estimated US$464 million pre-production capex is paid back in 2.6 years, with an after-tax IRR of 23.1% and an NPV5% of US$691 million. The project has its Environmental Authorization, Mineral Agreement and Fiscal Stability Agreement in place. A definitive feasibility study for the project is underway and will provide the engineering and economic information that Sandspring needs to make a construction decision. The Project's appealing economics, and Sandspring's long-established positive relationship with the Government of Guyana, mean that the Toroparu Project will provide Sandspring with a robust platform from which to realize the potential of this emerging gold district.

Majority of Permits in Place

An Accessible Site

Lying at the confluence of the Puruni and Wynamu rivers, Toroparu includes a 120-person camp, a 2,500-foot all-weather airfield, and is accessed overland via the 240-km Itibali-Puruni-Papishao Landing Road, all of which have been in operation since 2004. The Project is a one-hour flight from Georgetown, Guyana's capital, and a ten-hour journey via boat up the Essequibo Estuary to the river ports at Itibali and Pine Tree, then overland to Toroparu. This road, rehabilitated by Sandspring in 2003, is a major corridor providing primary access to western Guyana, as well as to one of Guyana's important gold producing areas.

Large Reserve, Conventional Open Pit and Simple Metallurgy

Large Reserve, Conventional Open Pit and Simple Metallurgy

The Toroparu Project is a conventional open pit mine. It has a 4.1 million ounce proven and probable gold reserve, 211 million pounds of economic byproduct copper, and a 16-year mine life. The ore processing facility is being designed to accommodate two ore types with varying amounts of copper. It will consist of flotation and leaching circuits, and produce gold-bearing copper concentrates for shipment to a smelter, and gold doré bars that will be poured on-site and flown to a refinery. This facility is expected to process an initial throughput of 19,000 tons per day, and increase to 22,500 tons per day in its fourth year of production.

A Skilled and Experienced Workforce

A Skilled and Experienced Workforce

Guyana's network of skilled workers comes from the country's strong educational system, and its well-established gold and bauxite mining sectors. Sandspring has employed an experienced team of Guyanese equipment operators, maintenance personnel, and administrative staff since 2000. The team has not only efficiently run gold mining operations, as well as extensive exploration programs on the Upper Puruni mineral 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 Sandspring's fleet of mining and road construction equipment for more than 14 years.

Developing Long-term Power Alternatives

Developing Long-term Power Alternatives

In April 2013, Sandspring signed a Memorandum of Understanding with the Government of Guyana granting the Company the exclusive right to develop the Kurupung River Hydroelectric Project (KRHP). Located approximately 50 km southwest of Toroparu, it is estimated that the KRHP can support more than 100 megawatts of run-of-river hydroelectric capacity. An initial 50-megawatt run-of-river facility would support the Toroparu Project and other enterprises located within 120 km of the power plant. Sandspring estimates that the use of hydroelectric power could reduce its cash operating costs by US$60 to US$80 per ounce of gold produced. Such a reduction would not only result in significant cost savings over the life of the Toroparu Project, but also increase the economic viability of mining additional resources not currently in its mine plan.

Geology

Western Guyana: a highly prospective geological environment

The Toroparu Gold Project is located within the Guiana Shield, which encompasses eastern Venezuela, Guyana, Suriname, French Guiana, and parts of northern Brazil. The shield's northern part is composed of alternating volcano-sedimentary belts and large granitoid batholiths of the Paleo-Proterozoic age. The Guiana Shield forms the northern segment of the Amazonian Craton of South America, a dismembered portion of the West African Craton. Well-known for its gold potential, the West African Craton shares the same geological history as parts of the Guiana Shield.

Over 30 gold deposits are in production as a result of the systematic exploration of the West African Paleo-Proterozoic volcano-sedimentary belts. A similar approach by multinational exploration companies in the 1990s led to the discovery of giant gold deposits like Las Cristinas and Las Brisas in eastern Venezuela. In contrast, alluvial miners working in river drainages have made all the discoveries to date in western Guyana, meaning that large parts of the volcano-sedimentary belts remain insufficiently explored. These areas, then, retain a significant potential for discovering additional major deposits similar to those found in the more explored portions of the shields.

A large mineralized system

The Toroparu Gold Deposit forms a west-north-west oriented elongated cloud of disseminated mineralization located along the contact zone between a sequence of intermediate metavolcanics and an intrusive of tonalitic to quartz-dioritic composition. The mineralization is marked by a Chalcopyrite-Bornite-Pyrite-Molybdenite ore assemblage that appears to be controlled by a stockwork of disseminated fine fractures and veinlets of dilational aspect.

The system, which forms a corridor that is approximately 2.7 km long, 200 m to 400 m wide, and over 400 m deep, consists of several mineralized lenses:

  • The main eastern lens contains the largest part of the resource and displays the highest gold and copper grades in its core zone;
  • The main western lens contains lower average gold grades, and very low copper grades; and,
  • The southeastern lens also contains lower average gold and copper grades than the main eastern lens.

This mineralized corridor is surrounded by a phyllic to propylitic alteration cloud that represents several alteration phases. These geological and mineralogical features reflect overprinting magmatic-hydrothermal events, indicating that the Toroparu Gold Deposit is an intrusion related, possibly overprinted Porphyry style, deposit.

Reserves & Resources

March 2013 Pre-Feasibility

Mineral Reserves

Material Reserve
Classification
Tonnes
(000's)
Gold
(g/t)
Gold
(k oz.)*
Copper
(%)
Copper
(M lb.)*
AuEq
(g/t)
AuEq**
(k oz.)*
Saprolite Au Ore Proven 1,621 0.95 50 0.09 n/a n/a n/a
Probable 3,400 0.90 98 0.10 n/a n/a n/a
Proven +
Probable
5,022 0.91 148 0.10 n/a n/a n/a
Fresh Au Ore Proven 13,976 0.93 419 0.05 n/a n/a n/a
Probable 56,333 0.88 1,587 0.05 n/a n/a n/a
Proven +
Probable
70,309 0.89 2,006 0.05 n/a n/a n/a
Fresh Au/Cu Ore Proven 14,183 1.27 581 0.20 64 1.62 740
Probable 37,597 1.14 1,373 0.18 147 1.44 1,740
Proven +
Probable
51,780 1.17 1,953 0.18 211 1.49 2,480
All Ore Types Proven 29,780 1.10 1,049 0.13 64 1.26 1,209
Probable 97,331 0.98 3,058 0.10 147 1.09 3,425
Proven +
Probable
127,111 1.00 4,107 0.11 211 1.13 4,634
Notes on Reserve Estimate:
Reserves are inclusive of mineral resources; Reserves are based on a gold cutoff price of US$1,070/oz. for Fresh Rock and US$970/oz. for saprolite. Cash flow Base Case used a gold price of US$1,400/oz. and copper price of $3.25/lb.; open pit reserves assume full mine recovery; open pit reserves are diluted (further to dilution inherent in the resource model and assumes selective mining unit of 5 m x 5 m x 5 m).
* Contained In-situ Au ounces do not include metallurgical recoveries of 96% for gold in saprolite (Oxide), 85% for gold in Au/Cu Fresh Rock, 91% for copper in Au/Cu Fresh Rock, and 96% for gold in Au Fresh Rock.
** AuEq Gold Equivalent oz. calculated using US$1,403/oz. Au ($1,394/oz. after refining), US$3.47/lb. Cu ($3.17/lb. after NSR deductions), 85.46% gold recovery, 91% copper recovery, Formula 1% Cu = 1.714 g/t-Au).Waste tonnes within pit is 468.9 Mt at a strip ratio of 3.69:1 (waste to ore); an open pit CoG of 0.35 g/t-Au saprolite and 0.38 g/t-Au Fresh Rock was applied to open pit resources constrained by the final pit design; mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding; the mineral reserve estimate for Toroparu was calculated by Fernando P. Rodrigues, BSc, MBA MMSAQP #01405QP of SRK, in accordance to CSA, NI 43-101 standards and generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines; and Reserves Effective Date: March 31, 2013.

Mineral Resources

Resources within optimized pit shell

(As of March 31, 2013)¹
cut-off grade of 0.3 g/t Au (based on $1,350/oz. Au)
Resource Classification
(All rock types)
Tonnes
(million)
Au
(g/t)
Au oz.
(Millions)
Cu
%
Cu
(M lb.)
Measured & Indicated 240 0.89 6.894 0.084 444
Inferred 129 0.74 3.090 0.042 120
Notes on Resource Estimate:
All resources in the revised mineral resource statement are In-Pit resources reported within an optimized pit shell (Resource Pit Shell) above an economic cut-off grade of 0.30 g/t Au. The economic cut-off grade was determined using a gold price of $1,350/oz. Au, an average metallurgical recovery of 95.9% for gold, processing + G&A costs of $11.49/tonne, and includes $112/oz. Au for freight, smelting, refining and royalties. Copper metallurgical recovery used was 91%. Pit slopes used in the pit optimization were 45 degrees, and the mining costs used were $2.06/t for fresh rock. Mineral Resources are reported in accordance with Canadian Securities Administrators (CSA) National Instrument 43-101 (NI 43-101) and have been estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" guidelines. Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources estimated will be converted into Mineral Reserves estimate. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues, although the Company is not aware of any such issues. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category. Bulk densities of 2.76 t/m³ and 1.84 t/m³ were used respectively for Fresh Rock and saprolite tonnage calculations.