Scottie Resources (TSXV: SCOT; US-OTCQB: SCTSF) announced the results of an independent preliminary economic assessment (PEA) completed by Tetra Tech Canada for the Scottie gold mine project in British Columbia.
The PEA outlines a robust direct-ship ore (DSO) development scenario for the Scottie gold mine project, with strong economics and leverage to the current gold price environment, and additional upside potential through toll milling. All dollar ($) amounts in this news release are in Canadian dollars ($) unless otherwise indicated. The base case DSO project delivers an after-tax NPV(5%) ranging from $215.8 million to $668.3 million at gold prices of US$2,600/oz and US$4,200/oz, respectively. Importantly, the PEA also presents the opportunity to utilize excess capacity at the nearby Premier mill through a toll-milling arrangement, which could significantly enhance project economics.
Under this scenario, the after-tax NPV(5%) increases to $380.1 million at US$2,600/oz and $831.7 million at US$4,200/oz (note: no toll-milling agreement is currently in place). The PEA contemplates an initial capital cost of $128.6 million and average annual production of approximately 65,400 ounces of gold over a seven-year mine life. The project demonstrates a compelling after-tax payback period of 1.7 years for the standalone DSO case, and just 0.9 years under the toll-milling opportunity at a gold price of US$2,600/oz.
Brad Rourke, CEO of Scottie Resources, commented: “The direct ship ore (DSO) PEA marks a major milestone for Scottie. It highlights a simple, low-capex project with robust economics and clear growth potential through ongoing discovery. The DSO scenario eliminates the need for a mill or tailings facility, streamlining both permitting and construction. In addition, the optionality of toll milling at a nearby facility presents a clear, low-risk development pathway with meaningful upside. As we advance engineering and permitting, our successful 2025 drilling campaign and planned 2026 program are expected to convert a substantial portion of the current resource to the Indicated category and add new ounces-extending mine life and further strengthening project economics.”
The DSO project will start with open pit mining at the Blueberry Contact zone, followed closely by underground mining at the same zone. Afterward, the project will move to the Scottie gold mine, as outlined in the production schedule shown in Figure 1. The mined material will be jaw crushed and then sorted using an XRF-based ore sorting system. The upgraded product will be transported 40 km along an existing road to the Stewart bulk shipping facility, where it will be shipped overseas. Ocean Partners will purchase the material based on the negotiated terms in the existing offtake agreement.
The preliminary economic assessment (PEA) relies on the mineral resource estimate titled “NI 43-101 2025 Maiden Mineral Resource Estimate for the Scottie Gold Mine Project,” which pertains to the Scottie Gold Mine Property in British Columbia, Canada. This estimate, effective February 2, 2025, was announced on May 7, 2025, and is referred to as the “February 2025 Mineral Resource Estimate.”
The preliminary economic assessment (PEA) shows that the most significant improvement to the project’s economics comes from toll milling the product at the nearby Premier mill. Currently, no toll milling arrangement exists with the Premier mill; however, the PEA considers this a recommendation for further study. The model assumes operating costs similar to those from Ascot’s 2020 Feasibility Study, with an added toll milling premium based on comparable projects. At US$2,600 per ounce of gold, the all-in sustaining cost (AISC) for the toll milling model is calculated at US$935, compared to US$1,452 in the base-case DSO model.
The assessments found that several opportunities could significantly enhance the project’s economic return, including but not limited to toll milling refinement, exploration potential, throughput expansion, reduction of development costs per ounce, and power supply upgrades. Refinements on the toll milling concept could involve optimizing the mine plan and resource to reduce shipping costs by including more lower-grade ounces, removing the crushing and ore sorting plant, and conducting further metallurgical testing to maximize recovery in a toll milling scenario.
The exploration upside could improve the project’s economics through further drilling success. The resource estimate for the PEA, based on the February 2025 mineral resource estimate, includes the Blueberry Zone, Scottie gold mine, and Bend vein. Additional drilling could expand these resources, leading to higher throughput, an extended mine life, and the inclusion of isolated stopes not accounted for in the current mine plan due to development cost considerations.
The mine plan for the PEA assumes a processing capacity of 900 tonnes per day (tpd), resulting in a mine life of approximately seven years. Expanding resources might justify increasing throughput; the upcoming FS will evaluate potential costs to expand the processing plant capacity to between 1,500 and 2,000 tpd. Such an expansion could lead to economies of scale, reducing unit costs for processing and general and administrative expenses.
Following the completion of the PEA, Scottie is advancing the project toward a feasibility study (FS). The company aims to complete the FS in the first half of 2027 and intends to make a production decision based on the positive results of that study. The ongoing data collection and engineering work during the FS will enable detailed assessments of metallurgy, geotechnical conditions, underground grade reconciliation with the resource model, test mining to optimize the mining method, and more precise development cost estimates. More information is posted on www.ScottieResources.com.
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