Name and Location
Haile gold mine project, South Carolina, US.

Client
Romarco Minerals.

Project Description
The Haile gold mine has measured and indicated gold resources of 71.2-million tonnes at 1.77 g/t of gold, and inferred gold resources of 20.1-million tonnes at 1.24 g/t of gold.

Proven and probable gold reserves are estimated at 30.5-million tonnes at 2.06 g/t.

The feasibility study envisages a conventional openpit mine, based on variable pit-slope angles.

The bulk of material from the mine will be hard rock, which will be drilled and blasted prior to loading. The mine is expected to produce 2.55-million tonnes of ore a year for delivery to the process plant.

The process plant design incorporates conventional precious metals recovery processes, including jaw crushing, semiautogenous and ball milling, flotation, fine grinding of the flotation concentrate and carbon-in-leach cyanidation.

Final plant tailings will be stored in a conventional tailings facility.

In December 2014, Romarco filed an updated technical report on the Haile project.  The new report is based on the company's previously filed technical report, but updates the economics of the project including initial and sustaining capital; operating, reclamation and mitigation costs; and the gold price.

Net Present Value/Internal Rate of Return
The new report, based on Romarco’s previously filed technical report, has updated the project’s after-tax net present value, at a 5% discount rate, from $191-million to $329-million.  The after-tax internal rate of return has increased from 15.7% to 20.1%.

Value
The capital costs, based on the new technical report, are now projected to be $333-million, compared with capital costs of $275-million in the previous technical report, and includes a $17-million contingency, of which about $31-million has been paid. The increase in capital is primarily owing to advancing some work that was previously projected to be sustaining capital, increased insurance amounts, refinements in the detailed engineering, additional capital affiliated with permit requirements and increases in materials costs.

Duration
A timeframe has not been confirmed.

Latest Developments
Romarco has reported that construction at its flagship Haile gold mine is advancing on schedule and within budget.

The company, which is the subject of an open bid from OceanaGold, completed the water treatment plant in July. Stormwater management controls are now in place at the site and excavation has started.

The depressurisation wells are also operational, providing water for construction, and are operating according to the modelling work done by Romarco.

Further, pit development is ahead of schedule, with 163 132 t of overburden removed, compared with the planned 99 790 t.

OceanaGold offered to buy the Haile project in July, in an C$856-million all-scrip offer, which was expected to create the lowest-cost gold producer in the market.

Romarco shareholders would receive 0.241 of a common share of OceanaGold for each common share, giving Romarco shareholders 49% of the combined company if the deal closed.

Romarco and OceanaGold shareholders will vote on the transaction at their separate special meetings, scheduled for September 24.

Haile is expected to produce about 540 000 oz/y from 2017 at an all-in sustaining cost (AISC) of less than $600/oz. During the mine’s first year of operation, the AISC is expected to be as low as $414/oz of gold.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Romarco hoped to break ground on the $385-million Haile project at the end of 2011, but work was delayed after the corps had decided to request an environmental-impact statement process, rather than the simpler environmental assessment, for which the company had hoped. The company has spent more than $4.5-million on environmental studies over the past for years.

Contact Details for Project Information
Romarco Minerals, Dan Symons, tel +1 416 367 5500, fax +1 416 367 5505 or email info@romarco.com.