MONTREAL, Aug. 19, 2019 (GLOBE NEWSWIRE) -- Falco Resources (FPC:TSX-V) (“Falco” or the “Company”) is pleased to provide an update on the development of its Horne 5 project (the “Project”). During the past months, the Company has been working diligently at advancing the Project, focusing mainly on securing the necessary authorizations to proceed, optimizing its construction and operational approach, and reviewing the financial structure to fund the development of the Project.
Authorization to Proceed
Falco continues to work with various stakeholders to secure the necessary permits and authorizations required to proceed with the development of the Project.
Falco’s team is working on revising some components of its Environmental Impact Assessment (“EIA”) and meeting with various stakeholders to further mitigate the impacts of the Project.
Falco is in the process of finalizing various studies including those pertaining to its tailings management approach and closure plan in order to complete the final EIA. The Company is also benefiting from the input of its Community Advisory Committee in revising its EIA submission. Falco expects to file an updated EIA during the fourth quarter of this year, and to secure its admissibility from the Québec Government. Subsequently, the Company expects to undertake a formal public consultation process under the supervision of the Bureau d’audiences publiques sur l’environnement (“BAPE”) in accordance with Québec laws.
Dewatering Phase – Geotechnical Work Investigation
The dewatering of the old underground workings (former Horne and Quemont mines) constitutes the initial phase of the development of the Horne 5 Project and involves geotechnical challenges.
As part of the risk assessment for the dewatering phase, Falco has collaborated with its principal neighbor (the “Neighbor”), the owner of the mining concessions, on an initial geotechnical program to gather information and analyse the risks associated with the development of the Horne 5 Project.
Both parties met in July and agreed to continue collaborating by sharing information and initiate a second phase of geotechnical work which will be conducted by Falco and will include the Quemont area. The objective is to collect and analyze geotechnical information in order to assess the risks inherent to the eventual dewatering phase of the Horne 5 Project and then develop adequate mitigation measures that will protect the integrity of the Neighbor’s operation. Falco intends to complete this second phase of geotechnical work before year end 2019.
In addition to being subject to the applicable legal framework, the development of the Horne 5 Project is subject to a contractual framework whereby the obtaining of the required license to operate from its Neighbor is subordinated to the entering into a comprehensive financial guarantee arrangement with the Neighbor in order to provide adequate financial protection to this operation. Once this condition precedent will be achieved, Falco and its Neighbor will establish a work plan for the further development of the Horne 5 project, including operational parameters to be complied with by Falco in order to maintain the primacy of the Neighbor’s operation, the whole, in accordance with the agreed upon contractual framework. Based on the foregoing, Falco will not be carrying any dewatering activities prior to finalizing a satisfactory comprehensive financial guarantee framework with its Neighbor and thereafter agreeing on a mutually satisfactory work plan for the conduct of such activities.
Accordingly, Falco is currently working with its partners and specialized insurance providers to develop and provide a satisfactory comprehensive financial guarantee framework that will be submitted to its Neighbor in the coming weeks.
Construction and Operations
The construction and engineering team of Falco is reviewing various aspects of the construction to improve the execution and the operability functions. The Company continues to liaise with various suppliers and contractors to finalize its execution plan.
Falco is developing various protocols to mitigate the impact of the planned operation on its stakeholders, and is also updating its design to increase efficiency and reduce costs.
Falco continues to discuss with a number of financial partners with a view to secure the financing of the development of the Project.
The debt and equity markets remain challenging despite an improvement in the price of gold. Falco is benefiting from the strong sponsorship of Osisko Gold Royalties Ltd (“Osisko”) through its 19.9% ownership and $10 million loan facility. Osisko has also committed to fund a portion of the development costs of the Project through a silver stream facility completed in February 2019 for an amount of up to $180 million, payable in stages upon achievement of agreed upon milestones.
Luc Lessard, Falco’s President and CEO, commented: “We are confident that we will achieve key project milestones during the second semester of 2019, which will allow us to update our development schedule. We appreciate support and patience of all stakeholders in these challenging times as we pursue diligently the advancement of the Horne 5 Project.”
Falco Resources Ltd. is one of the largest mineral claim holders in the Province of Québec, with extensive land holdings in the Abitibi Greenstone Belt. Falco owns about 67,000 hectares of land in the Rouyn-Noranda mining camp, which represents approximately 70% of the entire camp and includes 13 former gold and base metal mine sites. Falco’s principal asset is the Horne 5 Project located in the former Horne mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties Ltd is the largest shareholder of the Corporation and currently owns 19.9% of the issued and outstanding shares of the Corporation. The Corporation has 207,878,736 shares issued and outstanding.
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Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information (together, "forward-looking statements") within the meaning of applicable securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. Generally, forward-looking statements can be identified by the use of terminology such as "plans", "expects', "estimates", "intends", "anticipates", "believes" or variations of such words, or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved" and includes, that all required permits and authorizations to proceed will be secured in a timely manner and on terms and conditions satisfactory to Falco, that the EIA study will be completed in a timely manner and that a formal public consultation process will be held afterwards, that risks inherent to the eventual dewatering phase will be satisfactory identified and mitigated, that a financial guarantee arrangement can be concluded with the Neighbor in a timely manner, that a work plan can thereafter be established for further development of the Horne 5 Project, that operational aspect of the Project can be improved and that impacts can be mitigated, that financing for the development of the Project can be secured on terms and conditions satisfactory to Falco. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include the delays in obtaining the required permits and authorizations to proceed or to complete the EIA, geotechnical risks and inability to adequately manage such risks, inability to provide and conclude a financial guarantee arrangement in a timely manner and on terms and conditions satisfactory to Falco, inability to develop and conclude a work plan for further development of the Horne 5 Project, inability to improve the operational aspects of the Project or to adequately mitigate its impacts, inability to secure financing for the development of the Project on terms and conditions satisfactory to Falco and those risks set out in Falco's public documents, including in each management discussion and analysis, filed on SEDAR at www.sedar.com. Although Falco believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed times frames or at all. Except where required by applicable law, Falco disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Cautionary Note Concerning Mineral Resources
This press release uses the term "inferred mineral resources” and “indicated mineral resources”, we advise investors that while this term is recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize it. "Inferred mineral resources” and “indicated mineral resources” have a great amount of uncertainty as to their existence and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.