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Market: TSX-V
Sector: Gold Mining
Epic: SYS
News: Latest news
Web Site: Sona Resources
Other Articles: 18-05-201007-05-201007-05-2010

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Sona Resources

Sona Resources

Sona Resources Corp. is a junior resource company based in Vancouver, British Columbia, specializing in gold exploration, development and mining in North America. The Sona board of directors and management have decades of combined experience in the mineral exploration and mining industry, and in managing and financing junior exploration companies.

Since its inception in 1990, Sona has engaged in exploration activities at its 100 percent owned mineral properties in Canada and the United States, as well as small-scale gold production at its flagship property, the Blackdome Gold Mine, in south-central B.C. Since 2002 at its Elizabeth Gold Property, 220 kilometres north of Vancouver, Sona has completed four diamond drill programs that have outlined a 206,000-ounce inferred gold resource.

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Tuesday, May 18, 2010

Preliminary assessment confirms underground mining potential for Sona Resources project

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Sona Resources (TSX-V:SYS, FSE:QS7) certainly has kept shareholders on their toes in recent days.  After releasing two resource updates last week, today the company reported on a Preliminary Economic Assessment (PEA) for the Blackdome Gold Mine and Elizabeth Gold Property in British Columbia.


Blackdome currently hosts an indicated mineral resources of 144,500 tonnes, grading 11.29 grams gold per tonne (containing 52,600 ounces of gold), and the inferred resource of 90,600 tonnes, grading 8.79g Au/t. At the Elizabeth Gold Property, 30 kilometres south of the Blackdome Gold Mine, Sona has outlined an inferred gold resource of 522,900 tonnes, grading 12.3g Au/t and (containing 206,100 ounces of gold).


The PEA, completed by Micon International, considered an underground mining operation at Blackdome and Elizabeth feeding a 200 tonne per day mill.  The assessment contemplated production of 183,600 ounces of gold and 62,500 ounces of silver over an eight year mine life.


The study returned encouraging results for Sona.  Micon project an operating cash cost of $686 per ounce, or $208 per tonne over the life of the project.  Pre-production capital costs were estimated at a very modest $20.8 million for both Blackdome and Elizabeth, with sustained capital of $9.45 million.  Pre-tax cash flow was estimated to be $27 million, or $20 million post-tax.


“We’re very pleased with the results of the Preliminary Assessment,” says John P. Thompson, Sona’s President and CEO. “The report shows a very positive economic projection for mining operations at Blackdome and Elizabeth with processing at the Blackdome mill. This analysis is a baseline scenario. The project is sensitive to the price of gold and a 15% increase in the price to $1,093 generates an increase in pre-tax cash flow to about $54 million.

We also see a great deal of upside through increasing the Elizabeth gold resource and an increased mill throughput."

The financial projections assumed a gold price of $950 per ounce, total recoveries of 94.5% gold and 77.6% silver from Blackdome ore and 92.5% gold for Elizabeth ore.

Annualized gold project is estimated at 23,505 ounces of annum, generating an pre-tax net present value of $11.45 million, and internal rate of return (IRR) of 31%. Including an estimate of possible taxation, the project would be expected to yield an after-tax undiscounted cash flow of $19.93 million over eight years, resulting in an after-tax IRR of 25.7 percent.


Granted the PEA, as the name suggest is preliminary in nature, and makes quite a few assumptions which now must be firmed up through additional studies, drilling and metallurgical testwork. Nonetheless, it is equally understandable why Sona Resources is pleased with the result, as it cleary justifies the company’s commitment to the project and continued investment in further development of the two assets.

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