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  | |  Feasibility Study HighlightsThe 2010 Feasibility Study was published on February 2 2010 and revised on January 10 2011. The following is a top line summary taken from the Feasibility Study:
The Base Case is on an After Tax basis, with future cash flows discounted to present. Key Base Case assumptions from the Feasibility Study include:
This financial analysis has been estimated based on the diluted Proven and Probable Mineral Reserves which are derived from only the Measured and Indicated Mineral Resources. See Resources and Feasibility Study for further information. The cost estimates are based on contract mining and processing of the flotation concentrates at off-site processing facilities located in the southwestern United States. The Feasibility Study report and associated documentation are filed on SEDAR. Capital Cost Estimates The Feasibility Study results estimated a total Capital Cost of $17.74 million. This included direct costs for procurement and construction totalling $9.8 million, which includes the processing plant, including purchase and installation of the crushing and grinding circuits, the gravity and flotation recovery circuits, and buildings, communications, etc with an estimated cost of $5.2 million, and direct costs also include $2.7 million for pre-production underground mine development, and lastly, direct costs include $1.7 million for tailings management and reclaim systems. Indirect costs included in the Capital Cost estimate are: $2.9 million for working capital, $1.1 million for reclamation bonding, $0.4 million for owner's costs, $2.3 million for other indirect costs, and finally, a contingency budget of $1.3 million. On-going capital required for further tailings impoundment expansion, bonding, reclamation, and demobilization of the contractor are estimated at $1.6 million. These costs are budgeted to be derived from operating cash flow after mine operations have commenced. The Capital Cost estimates in the Feasibility Study report represent a total estimated preproduction cost to design, procure, construct, and commission the various facilities described in this study to bring the Copperstone Mine back into gold production. According to the authors of the report, the estimate is categorized as Feasibility level with an expected accuracy range of ±7.5% at the bottom line. All costs are expressed in first quarter 2009 US dollars, with no allowance for escalation or interest during construction. The estimate covers the direct field costs of completing the project, plus the indirect costs associated with design, construction and commissioning of the facilities. The Copperstone Mine produced nearly one-half million ounces of gold between 1987 and 1993 through open pit mining. Existing infrastructure which remains from this time or which has been subsequently installed by Bonanza is considerable, and serves to reduce the current capital requirements for the mine. Existing infrastructure includes a 69 KV power line and substation and three water wells, all sufficient for the new mine at Copperstone. Additional infrastructure on site includes offices, maintenance shops and a laboratory building. Operating Cost Estimates The Feasibility Study results estimate a total Mine Operating Cost of US$95.64 per ton of ore processed. This includes a mining cost of US$60.64 per ton of ore and waste mined, a gold recovery cost of US$21.75 per ton of ore processed, and US$13.25 per ton of ore processed for G&A and corporate costs. The Mine Operating Cost estimates in the Feasibility Study report represent the total estimated mining and gold production costs, and total corporate costs to accomplish gold production as designed in the new underground mine planned at Copperstone. According to the authors of the report, the estimate is categorized as Feasibility level with an expected accuracy range of ±7.5% at the bottom line. All costs are expressed in first quarter 2009 US dollars. The estimate covers the costs of mining, processing and administering operations to produce gold. Stated another way, the cash production cost of producing one ounce of gold at Copperstone is calculated in the Feasibility Study results to be US$415 per ounce of gold produced. The total production cost of producing one ounce of gold at Copperstone is similarly calculated to be US$624 per ounce of gold produced. Technical information regarding the Copperstone project required to be disclosed under NI 43-101 can be found in the Feasibility Study. Information regarding risks and uncertainties relating to the Copperstone project development can be found in our annual information form, filed on SEDAR, and specific risks related to the results of the Feasibility Study can be found in our news release dated February 3, 2010, also available on SEDAR. Qualified Person The resource estimate was prepared by Jonathan Brown., M.B.A., C.P.G., a qualified person. The reserve estimate was prepared by Tom Buchholz, B.S. Eng - MMSA QPM, a qualified person. The estimates are effective as of February 2, 2010. Details of the key assumptions, parameters, and methods used to estimate the mineral reserves and resources, and information regarding the extent to which the mineral resources and reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues is contained in a technical report entitled "NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.. To review this report in its entirety, follow this link. Mineral resources that are not mineral reserves to not have demonstrated economic viabililty.The resource estimate was prepared by Jonathan Brown., M.B.A., C.P.G., a qualified person. The reserve estimate was prepared by Tom Buchholz, B.S. Eng - MMSA QPM, a qualified person. The estimates are effective as of February 2, 2010. Details of the key assumptions, parameters, and methods used to estimate the mineral reserves and resources, and information regarding the extent to which the mineral resources and reserves may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues is contained in a technical report entitled "NI 43-101 Technical Feasibility Report Copperstone Project, La Paz County, Arizona" effective February 2, 2010 and revised January 10, 2011, prepared for American Bonanza Gold Corp. by Dr. Corby Anders, Allihies Inc., MMSA QP, C. Eng FlChemE, Tom Buchholz, BS Eng. MMSA, Chris Pratt, LPG and Jonathan Brown, M.B.A., C.P.G.. To review this report in its entirety, follow this link. | |
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