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Explorer Reaches Milestone in PEA Completion, Positive Outcome
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Based on the results, this Canadian company will continue advancing this project in Idaho.

Otis Gold Corp. (OOO:TSX; OGLDF:OTCMKTS) announced in a news release the preliminary economic assessment (PEA) on its Kilgore gold project in Idaho is done and shows "highly attractive economics."

The report outlines an open-pit, heap-leach operation producing 112,500 ounces of gold per year over a 4.9-year mine life.

Using a gold price of $1,300 per ounce, the projected after-tax net present value (5% discount rate) is $97.6 million and the internal rate of return, 32.4%. The payback period is 3.1 years, and the life-of-mine net cash flow is $135.1 million.

As for costs, pre-production initial capex is estimated at $81 million, using contract mining. The life-of-mine sustaining capital cost is forecasted to be $97 million.

The PEA notes that potential exists to expand Kilgore's scope and scale by adding to the resource base via ongoing drilling, specifically stepout drilling adjacent to the deposit and exploration drilling at well-defined targets throughout and beyond the project area.

The assessment is based on Otis' August 2018 resource estimate that was developed from 381 drill holes and 93,000 meters of drilling. In that estimate, 85% of the resource was the Indicated category.

Otis Gold intends to keep advancing Kilgore and continuing to show economic viability through additional drilling along with metallurgical, geochemical and engineering work.


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