Preliminary Economic Assessment filed on SEDAR for Colt's 100% Boa Fé and Montemor Projects, Southern Portugal

May 07, 2013, 12:23 ET from COLT RESOURCES INC.

Trading Symbols:           GTP - (TSX-V)


MONTREAL, May 7, 2013 /PRNewswire/ - Colt Resources Inc. ("Colt" or the "Company") (TSXV: GTP) (FRA: P01) (OTCQX: COLTF) is pleased to announce the filing on SEDAR today of a positive Preliminary Economic Assessment ("PEA") prepared by SRK Consulting (UK) Ltd ("SRK") for the Boa Fe/Montemor gold projects, located in Portugal.  The full report will also be available on Colt's website.  The PEA covers the Chaminé, Casas Novas, Banhos, Bracos and Ligeiro gold deposits located within the Company's 100% owned (47km2) Boa Fé Experimental Mining License ("EML") and the Monfurado gold deposit located within the Company's 100% owned (728km2) Montemor exploration license that completely surrounds the Boa Fé EML.

Nikolas Perrault, CEO and President of Colt stated; "We are very pleased with the results of this first PEA prepared by SRK that reflects the work performed on our 100% owned Boa Fé and Montemor gold projects that we acquired in November 2011.  Our strategy of focusing on areas that were drill tested primarily during the 1990's has resulted in the rapid development of these assets.  Our aggressive drilling campaign that commenced shortly after being awarded the EML has significantly increased our confidence in the potential of these assets while our regional exploration work has indicated the potential to expand upon the previously announced NI43-101 compliant mineral resources (March 4, 2013).  Our decision to prepare the PEA on what we believe to be a portion of a potentially larger deposit is based on our resolve to move the project to production and to ultimately aim towards financing the exploration of this very prospective area from revenue.  We therefore remain focused on completing our feasibility study by year end which will support a production decision shortly thereafter.  In parallel, as part of our ongoing Environmental Impact Assessment (EIA), a scheduled public review took place during April paving the way for final approval. The EIA will be used as a blueprint designed to mitigate the impact of mining while generating value in an economically depressed region of Portugal."

Preliminary Economic Assessment Summary

A Preliminary Economic Assessment ("PEA") was prepared by SRK Consulting (UK) Limited for the Boa Fé - Montemor gold project in Portugal owned by Colt Resources Inc. The PEA relied on Indicated and Inferred classified resources as announced by Colt on March 4, 2013. The PEA evaluated four processing options for the open pit mining of six separate deposits at a total annual ore production rate of 720 ktpa.  The four options are reported in Table 1.

Table 1: Boa Fé/Montemor Processing Options

Scenarios Description
Option A Conventional Off-Site
Option B Conventional On-Site
Option C Drinkard Heap Leach
Option D Drinkard Halogen

The main conclusions from the PEA are shown in Table 2. All values are in USD and the study assumes a USD 1.30/EUR exchange rate. A flat gold price of USD 1,425/oz was used in the economic assessment. Capital and operating costs were derived from a combination of first principles and experience based on similar projects.

The conclusions and recommendations of the PEA are that the Project may be economically viable and that further studies and field work for this project are justified.

SRK notes that the economic assessment is preliminary in nature and the production schedules are inclusive of Inferred classified Mineral Resources that are considered too geologically speculative to have economic considerations applied to them that would enable them to be classified as Mineral Reserves. There is no certainty that the preliminary economic assessment will be realized.

Table 2:  Summary of Preliminary Economic Assessment results for Boa Fé/Montemor deposits

Alentejo Region, Portugal:  SRK Consulting (UK) Ltd.

  Units Option A Option B Option C Option D
Processing Method   Conventional
Heap Leach
  Recovery (%) 85.5 85.5 73 95
  Rock Mined (kt) 18,735 20,923 20,028 24,425
  Ore Processed (kt) 3,501 4,437 4,624 5,045
     (g/t Au) 2.7 2.4 2.3 2.2
  Recovered Metal (koz Au) 262 291 249 339
  Mine Life (years) 5.0 6.3 6.5 7.1
  Revenue (USDm) 373 415 355 482
  Operating Expenditure (USDm) (175) (180) (156) (206)
  Royalty (USDm) (15) (17) (14) (19)
  Operating Profit (USDm) 184 219 185 257
  Net Profit (USDm) 164 193 159 220
  Capital Expenditure (USDm) (119) (123) (92) (124)
  Cashflow (USDm) 44 69 68 97
Post-Tax Reporting          
  NPV @ 5% (USDm) 24.4 42.4 45.5 64.3
  IRR (%) 15.6 21.4 32.7 30.2
Cash Cost          
  Cash Cost (USD/tore) 54.11 44.22 36.82 44.68
  (USD/oz) 724 674 683 666

Metal Price Sensitivity Analysis

The impact of a range of gold prices on the NPV5% for the project has been studied in the PEA and the results are reported in Table 3.

Table 3:  Gold Price Sensitivity Analysis Results

Metal Price USD/oz 1,100 1,200 1,300 1,425 1,500 1,600 1,700 1,800
  Option A USDm (25) (9) 6 25 37 52 67 82
  Option B USDm (10) 7 24 44 56 72 88 105
  Option C USDm 1 15 30 47 57 71 85 99
  Option D USDm 4 24 43 66 81 99 118 137

Colt is aware that several areas of improvement may be made to capital and operating costs which will be addressed during the Feasibility Study.

Project Timeline and Optimization Efforts

The completion of this positive PEA is an important milestone in the continued development of Boa Fé/Montemor.

Colt's projected timeline to advance the project includes the following milestones:

Q4 2013 - Resource Update
Q4 2013 - Completion of Feasibility Study
Q4 2013 - Receipt of Full Mine Permit
Q1 2014 - Detailed engineering and procurement
Q2 2014 - Commence construction activities
Q1 2015 - Commence Production

Colt intends to address several areas during the Feasibility Study so as to improve results included in the PEA.  These will include:

Mineral Resources  - Colt will focus on upgrading of Inferred Resources to Indicated Resources and the identification of additional resources in close proximity to the known deposits.  Colt is also confident that the potential to increase resources through regional exploration is good.  Exploration work will be directed toward identifying additional deposits that will benefit the future mining operation.

Processing - Colt will complete ongoing testwork so as to finalize and optimize process flowsheets leading to final plant design.  The several approaches studied have provided several options that will be further evaluated and finalized.

Pit Slope - Colt will perform additional geotechnical investigations designed to optimize pit slope angles.

Environmental - Work will continue to address the need to minimize the impact of the future mining project.

Mining - Capital and operating costs will be addressed in detail to identify areas where improvements can be made so as to benefit the future economics of the project.

About Colt Resources Inc.

Colt Resources Inc. is a Canadian junior exploration and mining company engaged in acquiring, exploring, and developing mineral properties with an emphasis on gold and tungsten. It is currently focused on advanced stage exploration projects in Portugal, where it is the largest lease holder of mineral concessions.

Jurgen Fuykschot MSc MBA MAusIMM (CP), Principal Consultant (Mining Engineering), SRK Consulting (UK) Limited, is the independent qualified person, as defined in NI 43‐101, for the Boa Fé/Montemor Preliminary Economic Assessment.   Mr Fuykschot has reviewed the content of this press release and consents to the information provided in the form and context in which it appears.

The Company's shares trade on the TSX‐V, symbol: GTP; the Frankfurt Stock Exchange, symbol: P01; and, the OTCQX, symbol: COLTF.

FORWARD-LOOKING STATEMENTS: Certain of the information contained in this news release may contain "forward-looking information". Forward-looking information and statements may include, among others, statements regarding the future plans, costs, objectives or performance of Colt Resources Inc. (the "Company"), or the assumptions underlying any of the foregoing. In this news release, words such as "may", "would", "could", "will", "likely", "believe", "expect", "anticipate", "intend", "plan", "estimate" and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking statements and information are based on information available at the time and/or management's good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company's control. These risks, uncertainties and assumptions include, but are not limited to, those described under "Risk Factors" in the Company's annual information form available on SEDAR at and could cause actual events or results to differ materially from those projected in any forward-looking statements. The Company does not intend, nor does the Company undertake any obligation, to update or revise any forward-looking information or statements contained in this news release to reflect subsequent information, events or circumstances or otherwise, except if required by applicable laws.

This note regarding the preliminary economic assessment (PEA) is in addition to cautionary language already included within the news release as required under NI 43-101. The PEA is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA based on these mineral resources will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


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