Rupert Resources Reports Preliminary Economic Assessment for Ikkari Outlining After-Tax NPV of US$1.6B

TORONTO–(BUSINESS WIRE)–Rupert Resources Ltd (“Rupert” or the “Company”) is pleased to announce results from its Preliminary Economic Assessment (“PEA” or “study”) for the Company’s 100% owned Rupert Lapland Project, (“the Project”) including our flagship Ikkari gold discovery and Pahtavaara mine and mill located in Northern Finland.

{All figures are in US$ unless otherwise noted}

PEA Highlights:

• High-confidence, de-risked resource: Flagship Ikkari deposit’s updated Mineral Resource Estimate upgrades 84% of ounces to the Indicated resource category, and defines a cohesive deposit with broad intervals of consistent high-grade gold.
• Phased mine plan optimizing near-term cash flow: Open-pit operation at Ikkari in first 11 years, transitioning to Ikkari underground (years 10-23) and Pahtavaara concentrate (years 12 to 24).
• Robust returns and fast-track to payback: After-tax Net Present Value (“NPV”) (5% discount) of $1.6 billion with unlevered Internal Rate of Return (“IRR”) of 46% and payback after only two years, assuming a gold price of $1,650 per troy ounce (“oz”).
• Long life: 22-year life of mine (“LOM”) includes recovered gold of 4.25 million ounces with average annual production of 200,000 ounces. Open pit operation is expected to support average annual production of 220,000 ounces in years one to 11.
• High margin production profile: Expected lowest quartile all-in sustaining cost (“AISC”) of $759/oz over LOM, and $596/oz during open-pit operation. Low sensitivity to cut-off grade and low initial strip ratio.

James Withall, CEO of Rupert Resources, commented:

“This PEA study indicates exceptionally high-margin and meaningful returns on a robust project. The results are a testament to both the quality of the asset and our technical team. In only three years, we’ve gone from discovery hole to a preliminary study outlining an after-tax NPV of $1.6 billion, anchored by Ikkari. What excites us is that we still have room to grow at Ikkari and other satellite targets that we will be drill testing this winter. We have a real opportunity to not only advance Ikkari as outlined in our PEA, but systematically develop a cornerstone asset in a significant new gold camp over time.”

Study team and cautionary statement

The PEA study team was led by Tetra Tech, a global provider of consulting and engineering services for mining projects. Tetra Tech was supported by International Resource Solutions Pty Ltd (resource estimation), Axe Valley Mining Consultants Ltd (mining), SRK Ltd (geotechnical and hydrological studies), Grinding Solutions Ltd (metallurgy), Paterson & Cook (tailings) and Envineer Oy (environmental studies).

The Mineral Resource estimate included in the PEA is reported according to the classification criteria set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards for Mineral Resources and Reserves (“CIM Definition Standards”). These standards are internationally recognized and allow the reader to compare the Mineral Resource with that reported for similar projects.

The results of the PEA will be set forth in an independent technical report prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) which will be filed on SEDAR under the Company’s profile within 45 days of the date of this news release.

Readers are cautioned that the PEA summarized in this press release is intended to provide only an initial high-level review of the project potential and that the PEA is preliminary in nature and is intended to provide an initial assessment of the project’s economic potential and development options. The PEA mine schedule and economic assessment includes numerous assumptions and is based on both Indicated and Inferred mineral resources. Inferred resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the project economic assessments described herein will be achieved or that the PEA results will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Additional exploration will be required to potentially upgrade the classification of the Inferred Mineral Resources to be considered in future advanced studies.

Summary

Table 1. Project production summary

		Years 1 to 11	LOM (22 years)
Milled tonnes	Million tonnes	37.9	71.6
Mill throughput	Million tonnes per annum	3.5	3.5
Strip ratio	Waste : Ore	3.6	4.6
Average processed grade	Grams per tonne (gold)	2.1	1.9
Average metallurgical recovery	%	95	95
Average annual gold production	000 troy ounces	220	200
Recovered gold	Million troy ounces	2.4	4.2
Total Cash Cost	$ / troy ounce	501	667
Sustaining capital	$ / troy ounce	95	93
All in Sustaining Cost (AISC)	$ / troy ounce	596	759

As per the World Gold guidance (Gold All in Sustaining Costs | Gold AISC | World Gold Council), the objective of the all-in sustaining costs (“AISC”) metric is to provide key stakeholders (i.e. management, shareholders, governments, local communities, etc.) with comparable metrics that reflect as close as possible the full cost of producing and selling an ounce of gold, and which are fully and transparently reconcilable back to amounts reported under Generally Accepted Accounting Principles (“GAAP”) as published by the Financial Accounting Standards Board (“FASB” also referred to as “US GAAP”) or the International Accounting Standards Board (“IASB” also referred to as “IFRS”). AISC and AIC are non-GAAP metrics subject to regulatory and disclosure requirements of the various jurisdictions applicable to the reporting company.

Table 2. Project economics

Life of mine	Years	22
Net Present Value (5% discount rate)	USD million	1,600
Internal rate of return (unlevered)	%	46
Payback	Years	2.0
Capital expenditure (Initial)	USD million	405
Capital expenditure (Sustaining)	USD million	395
Revenue	USD million	6,955
Operating cost	USD million	2,775
Free cash (after tax)	USD million	2,710

Table 3. Project operating cost

Life of mine operating cost	USD / tonne milled	USD / oz
Mining	18.1	333
Water treatment	1.4	26
Concentrate freight	0.1	2
Processing	10.9	204
Tailings	1.6	28
Closure fund	0.8	15
G&A	2.4	44
Freight/Refining	0.1	3
Royalty	0.7	12
Total Cash Costs	36.1	667

Table 4. Project capital costs

Initial capex	USD millions
Mining o/p pre-production	16.6
Process Plant	131.0
Civils and infrastructure	29.5
Water treatment	96.4
Tailings	20.4
First fills & spares	10.0
Owner’s Costs	20.0
Closure bond	37.2
Contingency	43.5
Total initial capex	404.6

Sustaining capex	USD millions
Pahtavaara initial capex	41.0
Underground mining	178.8
Water treatment	34.0
Tailings & waste dump	34.9
Plant sustaining	101.0
Pahtavaara closure bond	5.0
Total	394.7

Table 5. Model inputs

Assumption	Unit	Value
Gold price	USD / troy ounce	1650
Exchange rate	EUR / USD	1:1
Corporate tax rate	%	20

Mining

• 11 year open pit operation at Ikkari, followed by an 11 year underground operation
• ROM feed supplemented by Pahtavaara 11g/t Au concentrate from year 12
• Low initial strip ratio of 1.6, 3.6 average over life of Ikkari open pit.

The PEA considers that Ikkari will be initially developed as an open pit with a target production rate of 3.5 Mtpa of plant feed. As the open pit reaches the end of its life (after 11 years) the underground development will be completed so that the underground operation can continue as the open pit is depleted. The transition point between open pit and underground operations was determined by operating costs as well as the limitation of the current exploration permit boundary. Open pit mining at Ikkari is expected to utilise a conventional shovel and truck configuration (140 tonne medium sized haul trucks matched with 300 tonne hydraulic excavators). Underground mining at Ikkari was modelled assuming the sub-level caving method. The mine at Pahtavaara will be re-developed as an open pit and underground mine (employing the long hole open stoping method) to produce a high-grade concentrate which will then be hauled by road to the Ikkari plant for final processing.

Table 6. PEA Ikkari open pit strip ratios

OP stage	Strip ratio (waste : ore)
1	1.6
2	2.7
3a	5
3b	5.5
Total	3.6

Metallurgy and processing

• 3.5Mtpa mill capacity with conventional flow sheet
• Testwork supports overall recovery of 95%
• P80 grind size of 175 micron and grinding energy of 15.5kwh/t indicating ore is moderately hard

A new plant was envisaged by the study to process 3.5Mtpa of run-of-mine (ROM) ore from the Ikkari open pit and underground at an average grade of 1.82g/t Au (including processing low grade stockpiles towards the end of life of mine). Testwork showed the gold at Ikkari is non-refractory and occurs in the native form or associated with pyrite. The process considered comprises crushing and grinding to reduce the RoM material to a characteristic grind (P80) of 175 microns (µ), and a gravity circuit to recover the native gold. The pyrite associated gold will be recovered by flotation and fed, with the re-pulped concentrate from Pahtavaara, into the leach circuit where lime and cyanide are added in the presence of air to…