STREAMS & ROYALTIES

- GOLD AND SILVER -

San Albino Gold Stream

Operator: Golden Reign Resources Ltd. ("Golden Reign")

Metal(s): Gold

The San Albino gold deposit is part of the San Albino-Murra concession (8,700 hectares) within a larger contiguous land package of 13,771 hectares. San Albino is located approximately 173 kilometers north of Managua, the nation's capital, and approximately 15 kilometers southeast of the northern border of Nicaragua with Honduras.

 

The deposit consists of a series of shallow dipping quartz sulphide veins hosted by graphitic argillaceous schist. The San Albino resource model consists of three high-grade, vein systems - the San Albino, Naranjo, and Arras veins - over a strike length of 850 meters, a down dip extension of 925 meters, with a minimum true width of one meter and average true width of 2.6 meters.

 

Only 60 hectares of the 200 hectares of the historic San Albino Mine area have been drill tested. All mineralized zones remain open at depth and along strike in both directions.

 

Marlin, through its wholly-owned subsidiary Sailfish Royalty Corp., has committed to fund US$15 million in development capital at San Albino. In exchange, Sailfish is entitled to purchase 40% of gold production at US$700 per troy ounce (1) until the first US$19.6 million is recovered (2) by Sailfish, and 20% of gold production at US$700 per troy ounce (3) thereafter. Prior to commercial production, Sailfish will be entitled to receive an 8% semi-annual coupon payment on the amount funded to Golden Reign.

 

A table summarizing the cash flow potential to Sailfish under the gold stream on San Albino gold deposit is as follows:

US$1,250/oz gold price

500 tpd

350 tpd

250 tpd

After-tax NPV 5% discount

$174.6

$144.4

$105.8

After-tax IRR (%)

54.3%

46.5%

37.5%

Payback (years)

1.7 years

1.8 years

2.2 years

Initial capital expenditures (with 20% contingency)

$21.1

$17.0

$13.9

All-in sustaining costs AuEq (US$/oz)

$391

$418

$460

Cash costs AuEq (US$/oz)

$355

$383

$424

Average annual gold payable production AuEq (oz)

42,300

30,800

21,800

Average annual after-tax free cash flow

$19.4

$13.8

$9.4

Life of mine

16 years

22 years

31 years

Potential average annual cash flow to Sailfish (40%) (4)

$9.3

$6.8

$4.8

Potential average annual cash flow to Sailfish (20%) (4)

$4.7

$3.4

$2.4

1.     Subject to a 1% per year cost escalation beginning three years from commercial production.

2.     Golden Reign will be required to make minimum monthly payments of US$282,800 per month when commercial production commences.

3.     Subject to a 1% per year cost escalation beginning three years from commercial production, plus 50% of the price differential above US$1,200 per troy ounce subject to certain adjustments.

4.     Assumes price paid of US$700/oz. Actual life of mine average cash flow will differ due to cost escalator and 50% split above US$1,200/oz.

 

More information on San Albino can be found on Golden Reign's website by copying and pasting the following URL into your web browser:

 

http://goldenreignresources.com/projects/san-albino-gold-deposit/

 

 

 

MINING GOLD AND SILVER

IN  THE AMERICAS

© Copyright 2016 Marlin Gold Mining Ltd. All Rights Reserved.

US$1,250/oz gold price

500 tpd

350 tpd

250 tpd

After-tax NPV 5% discount

$174.6

$144.4

$105.8

After-tax IRR (%)

54.3%

46.5%

37.5%

Payback (years)

1.7 years

1.8 years

2.2 years

Initial capital expenditures (with 20% contingency)

$21.1

$17.0

$13.9

All-in sustaining costs AuEq (US$/oz)

$391

$418

$460

Cash costs AuEq (US$/oz)

$355

$383

$424

Average annual gold payable production AuEq (oz)

42,300

30,800

21,800

Average annual after-tax free cash flow

$19.4

$13.8

$9.4

Life of mine

16 years

22 years

31 years

Potential average annual cash flow to Sailfish (40%) (4)

$9.3

$6.8

$4.8

Potential average annual cash flow to Sailfish (20%) (4)

$4.7

$3.4

$2.4

US$1,250/oz gold price

500 tpd

350 tpd

250 tpd

After-tax NPV 5% discount

$174.6

$144.4

$105.8

After-tax IRR (%)

54.3%

46.5%

37.5%

Payback (years)

1.7 years

1.8 years

2.2 years

Initial capital expenditures (with 20% contingency)

$21.1

$17.0

$13.9

All-in sustaining costs AuEq (US$/oz)

$391

$418

$460

Cash costs AuEq (US$/oz)

$355

$383

$424

Average annual gold payable production AuEq (oz)

42,300

30,800

21,800

Average annual after-tax free cash flow

$19.4

$13.8

$9.4

Life of mine

16 years

22 years

31 years

Potential average annual cash flow to Sailfish (40%) (4)

$9.3

$6.8

$4.8

Potential average annual cash flow to Sailfish (20%) (4)

$4.7

$3.4

$2.4

US$1,250/oz gold price

500 tpd

350 tpd

250 tpd

After-tax NPV 5% discount

$174.6

$144.4

$105.8

After-tax IRR (%)

54.3%

46.5%

37.5%

Payback (years)

1.7 years

1.8 years

2.2 years

Initial capital expenditures (with 20% contingency)

$21.1

$17.0

$13.9

All-in sustaining costs AuEq (US$/oz)

$391

$418

$460

Cash costs AuEq (US$/oz)

$355

$383

$424

Average annual gold payable production AuEq (oz)

42,300

30,800

21,800

Average annual after-tax free cash flow

$19.4

$13.8

$9.4

Life of mine

16 years

22 years

31 years

Potential average annual cash flow to Sailfish (40%) (4)

$9.3

$6.8

$4.8

Potential average annual cash flow to Sailfish (20%) (4)

$4.7

$3.4

$2.4