GBS Gold provides feasibility results

GBS Gold International Inc has released the feasibility results and initial mineral reserve estimate for the Cosmo Deeps underground gold mining project within its Union Reefs Operations Centre in the Northern Territory of Australia.

- Production is expected to commence in the first half of 2010 and to build to an average rate of 75,000-100,000 ounces per year for an initial reserve life of approximately 4.5 years. The ore is free-milling and will be hauled and processed through the existing 2.5 million-tonne-per-annum Union Reefs processing plant.

- Initial project capital is estimated at approximately US$30 million comprising removal of the water and historic tailings from the existing open pit, underground development and initial mining activities from the base of the pit, and site establishment.

- Average life-of-mine cash operating costs are estimated to be in the range US$400-450/oz (A$450-500/oz).

- At the gold price of US$675/oz (A$750/oz at an exchange rate of A$1.00:US$0.90) used to calculate the reserve estimate, the project has an internal rate of return of 42%. At the current spot gold price of approximately A$1000/oz, the project has an internal rate of return of approximately 90% and estimated payback period of less than two years.

- Feasibility work on the Cosmo Deeps underground gold mining project has been completed supporting an initial probable reserve of 2.2 million tonnes at 5.0 grams per tonne for 350,000 ounces of contained gold. Metallurgical testwork indicates that 95% processing recoveries are expected through the existing Union Reefs plant.