Val-d'Or, Quebec--(Newsfile Corp. - April 5, 2021) - Abitibi Royalties Inc. (TSXV: RZZ) (OTC: ATBYF) ("Abitibi Royalties" or the "Company") announces the receipt of the year-end 2020 gold Reserve and Resource Estimate completed by the Canadian Malartic Mine, operated by Agnico Eagle Mines Limited ("Agnico Eagle") and Yamana Gold Inc. ("Yamana"), in respect of the Company's net smelter return ("NSR") interests. These areas include portions of the Odyssey, East Malartic, Barnat, Jeffrey and Gouldie zones (Fig. 1). In addition, Canadian Malartic has provided a 3 year gold and silver production guidance schedule for areas covered by the Company's NSR interests during the years 2021-2023.
Information regarding the updated Reserve and Resource Estimates for the areas where Abitibi Royalties holds an NSR interest was provided by Canadian Malartic by way of a "Mineral Resources and Mineral Reserves Annual Reporting Letter to Abitibi Royalties". The following Reserve and Resource Estimates were extracted from such letter and without independent investigation. Proven and Probable Reserves have been calculated at a gold price of US$1,250 per ounce. Stated Reserves are in addition to Resources.
Table 1 - Reserve Estimate for Barnat (3% NSR)
| Category | Area | Tonnes (Metric) | Gold Grade (g/t) | Contained Ounces |
| Proven | BA Stockpile | 1,108,000 | 0.80 | 28,000 |
| Probable | BA | 1,442,000 | 1.02 | 47,000 |
| Total Proven & Probable | BA | 2,550,000 | 0.92 | 75,000 |
BA = Barnat
Table 2 - Resource Estimate for Odyssey, East Malartic, Barnat & Jeffrey (3% NSR)
| Category | Area | Tonnes (Metric) | Gold Grade (g/t) | Contained Ounces |
| Measured | BA | 5,500 | 0.74 | 130 |
| Indicated | BA-JF-ODY-EM | 4,985,000 | 2.15 | 344,000 |
| Total Measured & Indicated | BA-JF-ODY-EM | 4,990,000 | 2.14 | 344,000 |
| Inferred | BA-JF-ODY-EM | 65,599,000 | 2.02 | 4,254,000 |
BA = Barnat, Jeffrey = JF, Odyssey = ODY, East Malartic = EM
Table 3 - Resource Estimate for Gouldie (2% NSR)
| Category | Area | Tonnes (Metric) | Gold Grade (g/t) | Contained Ounces |
| Measured | Gouldie | - | - | - |
| Indicated | Gouldie | 1,290,000 | 1.59 | 65,900 |
| Total Measured and Indicated | Gouldie | 1,290,000 | 1.59 | 65,900 |
| Inferred | Gouldie | 15,000 | 1.26 | 600 |
An updated Resource Estimate for Midway (Fig. 1), where the Company acquired a 1.5% NSR in 2018 (see news release dated July 9, 2018) has not been completed. A Resource Estimate for the New Alger Project, where Abitibi Royalties holds a 1% NSR, is contained in the Company's news release dated May 13, 2020.
Canadian Malartic is budgeting approximately USD$4 million to test for possible extensions of the East Gouldie Zone. The East Gouldie mineralization remains open for expansion, especially at depth to the east. Exploration drilling suggests that East Gouldie may potentially trend onto the Company's 3% NSR at depth. However, the Company believes additional drilling and information is required to make this determination. As outlined in the recent Canadian Malartic Mine NI 43-101 Technical Report, significant drill intercepts have been encountered at the Chert Zone, where follow-up drilling has been recommended and where the zone could be integrated into the Odyssey Project. The Chert Zone, which was historically part of the East Malartic Mine, is believed to be located on Abitibi Royalties 3% NSR royalty based on available information. Also, the Technical Report states that in 2020, Regional Exploration on the Radium-Nord property returned significant gold values from the Radium gold zone and confirmed the modelled geometry. The zone remains open for expansion. Abitibi Royalties owns a 15% Net Profits Interest ("NPI) on the Radium-Nord property (Fig 1.).
Projected Gold & Silver Production 3% NSR 2021-2023
The tables below summarize the expected gold and silver production from 2021-2023 from the Barnat open pit. The Company also expects to generate additional cash from project payments under mining option agreements, option premiums, dividends, capital gains and interest in 2021. The Company intends to use its cash to make additional investments, including other royalties that meet the Company's investment criteria, pay dividends to shareholders and repurchase the Company's shares under its Normal Course Issuer Bid. In 2020, the Company's cash generation (before tax) totaled approximately CDN$30.4 million* that consisted of royalties CDN$0.7 million, dividends CDN$0.6 million, option premiums CDN$3.5 million and capital gains CDN$25.7 million.
Table 4 - Gold Estimated Production 3% NSR (2021)
| Year | Area | Tonnes Mined | Gold Grade | Mined Ounces | Processed Ounces | Recovered Ounces | Stockpiled Ounces |
| January | BA | 10,000 | 0.93 | 300 | 360 | 320 | -60 |
| February | BA | 34,000 | 0.87 | 940 | 940 | 850 | 0 |
| March | BA | 32,000 | 1.06 | 1,090 | 1,420 | 1,280 | -330 |
| April | BA | 51,000 | 0.91 | 1,500 | 1,890 | 1,690 | -390 |
| May | BA | 0 | - | 0 | 300 | 260 | -300 |
| June | BA | 80,000 | 0.74 | 1,920 | 1,810 | 1,640 | 100 |
| July | BA | 0 | - | 0 | 90 | 80 | -90 |
| August | BA | 51,000 | 0.99 | 1,640 | 1,690 | 1,530 | -50 |
| September | BA | 21,000 | 0.82 | 540 | 540 | 490 | 0 |
| October | BA | 0 | - | 0 | 190 | 160 | -190 |
| November | BA | 57,000 | 0.84 | 1,530 | 1,370 | 1,250 | 150 |
| December | BA | 72,000 | 0.61 | 1,400 | 1,130 | 1,010 | 270 |
| Total | BA | 407,000 | 0.83 | 10,850 | 11,730 | 10,550 | -880 |
BA = Barnat
Table 5 - Silver Estimated Production 3% NSR (2021)
| Year | Area | Tonnes Mined | Silver Grade | Mined Ounces | Processed Ounces | Recovered Ounces | Stockpiled Ounces |
| January | BA | 10,000 | 1.18 | 380 | 450 | 330 | -80 |
| February | BA | 34,000 | 1.10 | 1,190 | 1,190 | 870 | 0 |
| March | BA | 32,000 | 1.35 | 1,380 | 1,800 | 1,310 | -420 |
| April | BA | 51,000 | 1.16 | 1,900 | 2,390 | 1,740 | -490 |
| May | BA | 0 | - | 0 | 380 | 270 | -380 |
| June | BA | 80,000 | 0.94 | 2,420 | 2,290 | 1,670 | 130 |
| July | BA | 0 | - | 0 | 120 | 90 | -120 |
| August | BA | 51,000 | 1.26 | 2,080 | 2,140 | 1,560 | -70 |
| September | BA | 21,000 | 1.03 | 680 | 680 | 500 | 0 |
| October | BA | 0 | - | 0 | 240 | 170 | -240 |
| November | BA | 57,000 | 1.06 | 1,930 | 1,740 | 1,270 | 200 |
| December | BA | 72,000 | 0.77 | 1,770 | 1,430 | 1,040 | 340 |
| Total | BA | 407,000 | 1.05 | 13,730 | 14,840 | 10,810 | -1,120 |
BA = Barnat
Table 6 - Gold Estimated Production 3% NSR (2022-2023)
| Year | Area | Tonnes Mined | Gold Grade | Mined Ounces | Processed Ounces | Recovered Ounces | Stockpiled Ounces |
| 2022 | BA | 505,000 | 0.93 | 15,100 | 16,300 | 14,600 | 1,209 |
| 2023 | BA | 1,133,000 | 0.99 | 36,100 | 37,700 | 34,000 | -1,600 |
BA = Barnat
Table 7 - Silver Estimated Production 3% NSR (2022-2023)
| Year | Area | Tonnes Mined | Gold Grade | Mined Ounces | Processed Ounces | Recovered Ounces | Stockpiled Ounces |
| 2022 | BA | 505,000 | 1.05 | 17,000 | 18,400 | 13,400 | -1,400 |
| 2023 | BA | 1,133,000 | 0.99 | 36,100 | 37,600 | 27,400 | -1,600 |
BA = Barnat
The Company will notify shareholders if royalty production is materially different than the estimated amounts shown above for 2021.
Reserves/Resource Estimate Information
Mineral Resources are in addition to the Mineral Reserves and are determined by Ordinary Kriging in exception to Odyssey and East Malartic underground estimates, which are determined by Ordinary Kriging or Inverse Distance Squared. A cutoff grade 0.39 gpt gold is used for material located inside the pit design for the Barnat area. For Gouldie, Jeffrey, Odyssey and East Malartic underground estimates, Mineral Resources have been constrained in optimized mining shape ("MSO") at variable stope cutoff grades ranging from 1.00 to 1.40 gpt gold (depending on the area and depth) and include internal dilution. It can be noted that material below Barnat pit design is now assigned to the East Malartic deposit. The use of MSO for underground resources reporting ensures that Mineral Resources reported herein have a reasonable prospect for economic extraction and therefore comply with the most recent Canadian Institute of Mining ("CIM") best practices guidelines for Mineral Resource reporting.
A Proven Mineral Reserve is the economically minable part of a Measured Mineral Resource. It includes diluting materials and allowances for losses which occur when the material is mined. A Proven Mineral Reserve represents the highest confidence category of reserve estimate.
A Probable Mineral Reserve is the economically minable part of an Indicated Mineral Resource. It includes diluting material and allowances for losses which may occur when the material is mined. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve but is of sufficient quality to serve as the basis for decision on the development of the deposit.
Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit.
Indicated Mineral Resources is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation.
Inferred Mineral Resource is that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade continuity. It is based on the information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be of limited or uncertain quality and reliability.
* Non-IFRS Measure: The Company has calculated the measure "cash generation" as royalties earned in the quarter and cash received from option premiums and dividends. This is a non- IFRS measure as IFRS requires the Company's cash in its financial statements to be recognized using the accrual basis of accounting. The Company believes that this measure, while not a substitute for measures of performance prepared in accordance with IFRS, provides investors an improved ability to evaluate the underlying performance of the Company.
Technical Information
Any discrepancies in totals shown in the above Tables are due to rounding effects. Also, there can be no assurance at all or any of the drilling at the Chert or Radium zones is contained within Abitibi Royalties 3% NSR and 15% NPI.
QUALIFIED PERSON
Glenn J. Mullan, Chairman, is the Qualified Person (as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects) who has reviewed this news release based solely on the data provided and without independent verification, and is responsible for the technical information reported herein.
About Abitibi Royalties
Abitibi Royalties owns various royalties at the Canadian Malartic Mine near Val-d'Or Québec. In addition, the Company is building a portfolio of royalties on early stage properties near producing mines and generating mineral projects for sale or option. The Company is unique among its peers due to its strong treasury, no debt, monthly dividend, share buyback program and limited number of shares.
For additional information, please contact:
Ian Ball - President & CEO
2864 chemin Sullivan
Val-d'Or, Québec J9P 0B9
Tel.: 1-888-392-3857
Email:
Forward-Looking Statements:
This news release contains certain statements that may be deemed "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or realities may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. Except as required by law, the Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.
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 news release.
Fig. 1 - Abitibi Royalties Royalty Interest at Canadian Malartic Mine
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