SEMAFO
ASX-listed gold company Bassari Resources holds a significant +600 square kilometre exploration package along the Birimian Greenstone Gold Belt in Senegal.

The Bassari Resources development– the Makabingui gold project – is on track to begin development work with the aim of commencing selective near-surface, high-grade open-pit gold mining as soon as possible, with first gold targeted during late 2016 or early 2017 writes Chantelle Kotze.

Bassari is moving towards commencement of development in Senegal following the granting of the exploitation permit for the Makabingui gold project on 30 November 2016.

Bassari Resources executive chairman Alex MacKenzie, who believes that “grade is king”, has without a doubt attained a highly-sought after exploration package in Senegal with Makabigui taking centre stage in terms of being first to production, followed second by the Konkoutou group of prospects, which have the largest and strongest geochemical gold in-soil anomaly on the Bassari Resources leases and has recorded grades of up to 80 g/t of gold.

A closer look into the project timeline

The Makabingui project was awarded a five year renewable exploitation permit in November 2016 by the Senegal Minister of Mines, which covers both the Makabingui project plus the 8 km of strike at Makabingui South

Located within the highly prospective Kédougou-Kéniéba Inlier in eastern Senegal, which is endowed with over 60 Moz of gold, the Makabingui project currently hosts a mineral resource which comprises 11.9 Mt averaging 2.6 g/t gold for a contained 1 Moz of gold classified into the indicated and inferred resource categories.

“The project has both open pit and underground development potential, with development first focused on exploiting the high-grade gold through selective open cast mining in order to secure immediate cash flow in year 1, followed by the mining of the underground resource thereafter and the subsequent establishment of a larger scale processing plant,” MacKenzie explains.

This will be done in three-stages:

  • Stage 1 – Control drilling and the subsequent selective mining of high-grade (>5.6 g/t gold) using an open pit mining method over an expected 3.5 years life of mine;
  • Stage 2 – The mining of underground gold mineralisation, as identified by an underground scoping study; and
  • Stage 3 –The completion of drilling at Makabingui to convert most of the 1 Moz from a resource to reserves, and the construction of a 1-2 Mtpa plant in year three of the project to extend the mine life of Makabingui from 3.5 years to +15 years.

Mackenzie explains that the first step of Stage 1 is to undertake pre-production grade control drilling in which Bassari Resources will better define the ore lodes in the upper levels of the pits for accurate selective mining activity and to extend some high grade zones at depth.

In doing so Bassari Resources has commenced 4 025 m of reverse circulation (RC) infill and grade control drilling in two of the four planned pits at Makabingui, namely  in Pit 1 and Pit 2. In Pit 1 a total of 54 RC holes with an average depth of 56 m, totalling 3 025 m are planned, while in Pit 2 a total of 21 RC holes with an average depth of 48 m, totalling 1 000 m are planned.

Thereafter, the first stage of development is the mining of all four high-grade pits comprising a total 158 000 oz of ROM gold at an average grade of 5.7 g/t to produce 158 000 oz of gold at an average production rate of 50 000 oz pa over the 3.5 year mine life.

The breakdown of the gold reserves of each of the four pits is as follows:

  • Pit 1 – 111 000 oz grading at 7.5 g/t of gold
  • Pit 2 – 51 000 oz grading at 3.8 g/t of gold
  • Pit 3 – 5 000 oz grading at 3.1 g/t of gold
  • Pit 4 – 13 000 oz grading at 5.9 g/t of gold

The feasibility study into open pit mining at Makabingui, concluded in 2014, found the project produced strong cash flows, with a pre-capex free cash flow (after tax) of US$88 million at a low operating cost of $683/oz.

The prefeasibility study also concluded that the project would have a low capital cost of $12 million, owing to the use of significant existing infrastructure and equipment, repayable over a period of 12 months; an NPV (at an 8% discount rate) of $63 million and an IRR of 404%.

Noting the excellent potential to extend the resource base of the Makabingui project, the company undertook an underground scoping study in 2014 to provide an assessment of the potential for mining the deeper resource. It was identified that this would be done through access declines within the pits upon completion of the initial phase of open-cut mining operations. The scoping study identified significant underground potential beneath Pit 1 in the order of 120 000 oz grading at 7 g/t of gold.

The scoping study also found that  further exploration and mine life upside exists within the highly prospective area to the south, the so called Makabingui South deposit, located within the Makabingui exploitation permit, which has an 8 km strike within the deposit.

Unlocking the full potential of the project

In terms of the infrastructure needed to unlock the Makabingui project, the study assumed the use of the existing infrastructure and equipment, namely an established haul road linking the mine to the process plant; an existing fleet of heavy mobile equipment for pre-development work; a 500 Mℓ raw water dam and 85 000 ℓ diesel fuel storage tank and a 120 person camp.

It also assumed the use of the existing 300 000 tpa gravity processing plant, with a larger facility is expected to be established as the project scope grows.

Commenting on the processing of the Makabingui ore, MacKenzie explains that the existing 300 000 tpa processing plant would be upgraded to treat hard rock.

The rock crushers and ball mills will be located at the mine site and the crushed rock will then be trucked 10 km to the plant for processing where a carbon-in-leach (CIL) tank will be installed at the backend of the plant to ensure a +90% gold recovery.

In the run up to development of the mine, Bassari Resources has finalised the civil, mechanical, piping and structural plant design and secured the engineering plan through Australia-based engineering firm Mincore.

The process flow sheet and plant layout has been determined and the procurement packages for the supply of processing equipment have been issued to suppliers through an equipment procurement alliance which Bassari has in place with China’s Vanture International.

Moreover, a gold refining agreement has been secured with international refining group TCA SPA.

Funding

Bassari Resources is in the process of putting into place the finance needed to bring Makabingui into production.

The company is in discussion with South Africa-based banking firm Nedbank Corporate and Investment Banking and pan-African banking conglomerate Ecobank (in which Nedbank has a 20% stake) regarding the $12 million ($6 million equipment and $6 million working capital) needed for the project. Nedbank has started a due diligence on the project.

In addition a second South African financier, Auramet, has also expressed their interest in funding the project and has also commenced a due diligence review.

Additional priority projects in Senegal

In addition to Makabingui, Bassari Resources plans to develop its Konkoutou prospects, located 35 km north of the Makabingui gold project on the Moura permit.

The Moura permit covers a very prospective part of the Diale Formation of the Birimian greenstone belt adjacent to the Senegal Mali Shear Zone (SMSZ) which hosts the large Loulo and Sadiola gold operations, respectively owned by Randgold Resources and IAMGOLD in Mali.

The company undertook exploration drilling on the Konkouto Hill and Konkouto North deposits within the permit at the end of 2016 and start of 2017.

The drilling undertaken in January 2017 confirmed the continuity of the gold mineralised structures at depth and along strike with excellent assay returns from the RC and diamond drilling (DD) programme at Konkoutou Hill.

Gold intersections included:

  • 21 m at 3.5 g/t gold from 54 m including 6 m at 9.6 g/t gold
  • 11 m at 5.7 g/t gold from 21 m including 1 m at 44.2 g/t gold and 5 m at 1.4 g/t gold
  • 10 m at 5.1 g/t gold from 96 m including 4 m at 9.3 g/t gold
  • 5 m at 4.9 g/t gold from 23 m including 1 m at 22.2 g/t gold and 4 m at 2 g/t gold

At Konkoutou North, the maiden RC drilling programme which comprised 16 holes for 1 179 m, was completed in November 2016.

Konkoutou North maiden RC drilling results include:

  • 6 m at 6.3 g/t gold from 21 m
  • 1 m at 25 g/t gold from 48 m
  • 4 m at 2.3 g/t from 29 m and 3 m at 5.1 g/t gold from 53 m

Mackenzie believes that various facts point to the Konkoutou target being potentially a large mineable gold deposit.