Name of the Project
Curraghinalt gold project.

Location
Northern Ireland.

Client
Dalradian Resources.
 

Dalradian Resources has announced a recommended cash offer of C$1.47 a share by investment management group Orion Mine Finance, valuing the developer of the Curraghinalt gold project at C$537-million.

Under the agreement, Curraghinalt will continue to be supported by streaming firm Osisko Gold Royalties, which together with its CEO Sean Roosen and certain senior Dalradian management team members, including CEO Patrick Anderson, have indicated that they will hold on to their shares.

The remaining shareholders and Orion hold a combined 20.4% stake in Dalradian.

Dalradian, which recommended that shareholders accept the bid, has said that the offer price is within the fair value market range of C$1.35 to C$1.70 a share obtained from Raymond James.

Dalradian chairperson Jim Rutherford has said that the premium offer reflects the hard work and progress of the Curraghinalt gold project, which, in less than ten years, has been transformed from a grassroots discovery to one of the world’s highest-grade gold deposits.

Project Description
The Curraghinalt gold deposit is an orogenic gold system comprising a series of moderately to steeply dipping, structurally controlled, high-grade gold-bearing quartz-carbonate veins over a 2.3 km strike length.

The project has proven and probable reserves of 1.44-million ounces of gold and 660 000 oz of silver, held in 5.24-million tonnes grading 8.54 g/t gold and 3.9 g/t silver.

The feasibility study has highlighted a project with high expected profitability and returns, as well as a strong economic case for advancing it to development.

The mine will be operated using automation, mechanised underground mining methods and best-in-class processing. The dry-stack tailings from the process will not come into contact with cyanide.

Curraghinalt is expected to be accessed through the existing exploration adit and a new ramp, which will be developed adjacent to the proposed plant site.

The new ramp will serve as the primary access to the mine for personnel and materials, and the haulage of mineralised materials to the plant site.

Yearly ore production of up to 511 000 t is planned from a combination of a primary longitudinal longhole retreat, with some cut-and-fill mining methods and development along the veins.

Potential Job Creation
Direct employment is estimated at 300. Once the mine is in operation, it is expected to employ at least 350 people in permanent positions.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 5% discount rate, of $301-million and an internal rate of return of 24.4% using an assumed gold price of $1 250/oz. Payback is estimated at four years.

Value
The project has an initial capital cost, including contingency, of $192-million.

Duration
The project is expected to take 18 to 24 months to build.

Latest Developments
Orion and Osisko continue to show great confidence in Northern Ireland and the high-grade Curraghinalt project.

“Their goals – as strategic investors – are completely aligned with ours – to secure planning permission for an underground gold mine and continue advancing the project in a way that benefits all our stakeholders. We will continue to work closely with community members, all levels of government, employees, contractors and local suppliers towards building one of the world’s top gold mines,” Dalradian CEO Patrick Anderson has said.

The Orion offer reportedly has strong shareholder backing, with certain funds and accounts under management by subsidiaries of BlackRock, which holds about 10.7% of Dalradian’s issued and outstanding common shares, having indicated their support for the bid.

Orion and the remaining shareholders have also agreed to vote in favour of the transaction. The agreement is subject to approval at a shareholder meeting to be held in August, as well as court and other approvals. The scheme will require 66.23% of shareholders to approve and a simple majority percentage of shareholders after excluding any votes of Orion, Osisko Gold Royalties and certain other persons.

Orion chief investment officer Oskar Lewnowski has said the investment group is pleased to expand its ownership in “one of the world’s best undeveloped gold deposits”.

Dalradian released an updated mineral resource statement for the gold deposit in May, which includes a 46% increase in gold ounces contained in the measured and indicated categories and a 32% increase in inferred gold ounces, compared with the 2016 resource.

Measured and indicated resources are at 3.07-million ounces of gold contained in 6.35-million tonnes grading 15.02 g/t.

“Our starting point for the new feasibility study is a total measured and indicated resource of 3.1-million ounces, compared with 2.1-million ounces in the prior feasibility study. This should allow us to deliver a substantial improvement to the already strong economics shown in the initial feasibility study,” Dalradian COO Eric Tremblay has said.

Dalradian is expecting the updated study to deliver an increase in yearly production and a decrease in costs because of greater mining mechanisation.

Tremblay has said that test stoping proved that it can minimise dilution in mining the high-grade, narrow veins.

Dalradian will release the updated feasibility study in the third quarter.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Dalradian Resources VP: communications and corporate secretary Marla Gale, tel +1 416 583 5600 or email info@dalradian.com.