Name of the Project
Los Filos gold mine expansion.

Location
Mexico.

Client
Leagold acquired the Los Filos gold mine from Goldcorp in 2017.

Project Description
An expansion feasibility study has determined that the Los Filos gold mine has the potential to be developed into a long-life, low-cost operation with significant scale. The Los Filos mineral reserves have increased from 1.7-million ounces at the time of acquisition in 2017 to 4.5-million. The project also has abun­dant mineral resources that provide additional opportunities for adding to the increased reserves and further extending the mine life.

The feasibility study forecasts a ten-year mine life with yearly gold production doubling from current rates. The study has identified a new operating strategy, which includes three large low-grade openpits, two high-grade underground mines, the addition of a carbon-in-leach (CIL) plant to process the higher-grade ore, and the continued heap leaching of the lower-grade openpit ore.

The CIL plant is expected to achieve higher recoveries and better financial returns than heap-leach processing for the underground ore and the higher-grade portion of the openpit ores. The plant also provides the ability to process some ore types that were previously not included in reserves as they were not amenable to heap-leach processing. This includes material with an elevated sulphur content, which exhibits lower gold recoveries at the crush sizes typically used in crushing for heap-leach processing. The plant is expected to process 12.4-million tonnes at an average grade of ore feed of 4.63 g/t gold with an average recovery of 89.7% to produce 1.66-million ounces of gold.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value (NPV), at a 0% discount rate, of $752-million. At a 5% discount rate, the project has a pretax NPV of $565-million.

The project has an internal rate of return of 87% and a payback of less than one year.

Value
The expansion project is estimated at $179.7-million and comprises the Bermejal underground mine development at $65.4-million, construction of the 4 000 t/d CIL plant for $76.3-million, and $38.1-million for site infrastructure, including a tailings filtration system, 40 MW substation and transmission line.

Duration
Not stated.

Latest Developments
Leagold is preparing a development plan for Los Filos that includes construction planning and optimising the sequencing of the major expansion projects.

Key Contracts and Suppliers
SRK Consulting Canada (Bermejal under­ground mine production, cost estimates and mineral reserves. Overall project risk assessment, implementation and economics, overall report compilation); SRK Consulting US (Los Filos underground, Los Filos, Bermejal and Guadalupe openpit mines production, cost estimates and mineral reserves); SRK Consulting US (heap-leach metallurgical testwork review and interpretations, heap-leach process plant review and cost estimates); Lycopodium Minerals Canada (CIL metallurgical testwork management and interpretation, process plant and related process infrastructure design, process capital and operating cost estimates, risk assessment, project implementation); and Call & Nicholas (Bermejal underground mine geotechnical).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Leagold VP investor relations Meghan Brown, tel +1604398 4525 or email mbrown@leagold.com.