The studies confirm the cost estimates in Yaouré’s October 2017 definitive feasibility study (DFS) that demonstrated the quality and strength of Yaouré, Perseus’s planned third mine. The Yaouré DFS reported that the project is:
- Economically attractive – IRR of 27% with a 32-month payback period at a US$1 250/ounce gold price;
- Technically robust – 3.3 Mtpa plant with average annual gold production of 215 000 oz at an AISC of $734/oz for the first five years of production;
- Readily financeable – capital cost estimate of $263 million and robust cash flows to service debt; and
- Able to be extended beyond its initial 8.5-year mine life – through near mine opportunities to expand mineral resources and ore reserves mineable using both open pit and underground mining techniques.
Independent consultant Lycopodium Minerals started the value engineering assessment (VEA) and front-end engineering and design (FEED) study in June 2018 and completed on time and on budget on 6 October 2018.
Lycopodium is well qualified to undertake the studies having played a critical role in the successful engineering, procurement and construction of several high-profile West African gold mines in the last three years, including Perseus’ Sissingué gold mine that was successfully developed and commissioned in early 2018.
The scope of the VEA included the evaluation of opportunities to improve plant design and optimise the estimated capital expenditure.
The FEED study focused on progressing the design of the processing plant and infrastructure to enable a detailed capital cost estimate to be prepared to a level of accuracy of +/-10%.
Based on the FEED study, the total capital cost estimate for the development of Yaouré is $264 million (including a contingency allowance of approximately 8%) which is within 0.5% of the DFS estimate.
The FEED study assumes that the process plant is developed under an engineering, procurement and construction (EPC) contract. Based on Perseus Mining’s current plans, first gold is expected to be produced at Yaouré in December 2020.
“The completion of the FEED study is an important milestone on the path to delivering Yaouré, our third gold mine. The FEED study was completed on schedule and on budget and has delivered a satisfactory outcome with the capital cost less than 0.5% greater than the cost originally estimated in the Yaouré DFS,” says Perseus Mining MD Jeff Quartermaine.
“With this estimate now in hand we can confidently advance the implementation of our finance plan which involves the deployment of a debt funding package to complement a combination of existing cash reserves and expected future cash flow from our two existing operations – both of which are performing in line with internal expectations and contributing to a steady build in our net cash reserves.”