TSX/AIM-listed Avesoro Resources has announced positive results from the pre-feasibility study for its New Liberty gold mine which includes transitioning the mine from surface to underground.
Liberia – The PFS further includes an updated mineral resource and mineral reserve estimate, maiden mineral reserves at the Ndablama satellite deposit and an updated life of mine.
The decision to transition to underground mining operations and undertake an updated PFS at New Liberty reflected the significant improvement in the level of confidence in the mineral resource following an extensive drilling programme over the last 12 months.
The PFS shows a significant positive impact on the value of New Liberty and the economics of the mine.
Seven year LOM extension to 2029, based on current proven and probable mineral reserves, with potential to extend further via the drilling of prospective satellite prospects across the company’s 1 394 km² exploration portfolio surrounding New Liberty;
Proven and probable mineral reserves increased by 89% to 17 Mt containing 1 355 000 oz of gold grading 2.49g/t;
Measured and indicated mineral resource of 20.47 Mt containing 1 748 200 oz of gold grading 2.66g/t;
Inferred mineral resource of 3 Mt containing 271 000 oz of gold grading 2.8g/t;
The New Liberty mineral resource remains open down dip, whilst the Ndablama mineral resource remains open down dip, as well as along strike. Additional resource development drilling in these areas has the potential to increase the resource base and infill drilling has the potential to convert a further portion of the existing Inferred Mineral Resources to the Indicated Mineral Resource category;
Total forecast recovered gold of 1 259 446 oz over LOM;
Average forecast annual gold production of approximately 114 500 oz over an 11 year LOM (2019 to 2029);
Total development capital cost of US$35.9 million;
Average LOM operating cash costs of $767/oz and all in sustaining cash costs $862/oz; and
Post Tax NPV of US$286 million at a 5% discount rate and $1 300/oz gold price (after debt repayment and associated finance charges) and LOM free cash generation of US$370 million1.
As part of the PFS, Avesoro has revised the mining schedule at New Liberty to take into account the transition of New Liberty from a solely open-pit operation to a combined open-pit and underground mining operation.
As a consequence, New Liberty is now entering a period of higher waste stripping to complete the final open pit pushback and prepare the pit for the development of underground operations and as a result the AISC for New Liberty will temporarily increase as the company undertakes this waste stripping that will be completed during 2019.
Avesoro has held discussions with a number of open-pit mining contractors and received preliminary quotations which could enable the Company to further lower its open pit mining costs in future years.
Serhan Umurhan, CEO of Avesoro, comments:
“I am very pleased that we have been able to add substantially to the value of the New Liberty gold mine by increasing the NPV to $286 million via the addition of maiden mineral reserves at Ndablama and the planned transition to underground mining operations at New Liberty. We are also reviewing the potential for a heap leach operation at Ndabalama with a view to further optimising the value of the asset.”
“As part of the plan to unlock the increasing value of New Liberty as outlined in the PFS, 2019 will see a substantially higher level of waste stripping and as a result, higher all-in-sustaining costs.”
“In 2019 we expect production of 210 000 to 230 000 ozs of gold at an operating cash cost of $850 to $910/oz sold and all-in sustaining cost of $1 110 to US$1 190/oz sold.”