Senegal – The Bassari/WATIC joint venture development was approved and signed by the Minister of Mines on 30 November 2016.
A Presidential Decree will now be issued to formalise the terms, which incorporates the basis for proceeding to the operational phase of the Makabingui gold project.
Bassari Resources has a strategic portfolio of exploration permits focused on the Birimian Gold Belt in Senegal. The permits cover an area of 790 km2 with 80 km of strike along the combined three contiguous permits. The permits are located within the Kenieba Inlier which is a +60 Moz gold region.
The 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 exploitation permit area includes the 1 Moz Makabingui gold deposit plus the 8 km of strike at Makabingui South.
The exploitation permit is granted for five years renewable for one or more periods not exceeding five years each, up to the exhaustion of the deposit, with the right to transform the granted permit to a mining concession as additional reserves are discovered.
The granting of the permit also requires the formation of an exploitation (mining) company in which the Republic of Senegal will be issued a 10% non-contributory interest.
The project will be required to pay a royalty to the Senegal government of 5% of gold sold quarterly and will also be required to invest US$100 000 on social development in the region during the period of pre-development and thereafter, 0.5% of gold sales, as well as contribute US$150 000 annually for the training and development of Senegalese in the mining sector, mining promotion, logistical support and technical services of the Ministry of Mining.
The permit for the project, whilst attracting corporate tax, has been granted a number of tax exemptions for an initial period of 3 years, including:
- export tax production;
- value added taxes, property and services;
- minimum basic tax;
- basic tax payable by the employer;
- professional, built or not built, property taxes, except for buildings used for habitation; and
- rights and fees for the constitution of companies and the raising of capital.
As per the permit, the project may freely export mined mineral substances, their concentrates and primary or other derivatives subject to complying with the formalities for the export of such substances and is not restricted on the transfer of dividends or repatriation of capital, or on investments financed with foreign currency.
Makabingui development plan
The first stage of development is the mining of high grade pits comprising 180 000mined ounces of which 158 000 oz are from ore reserves at an average grade of 5.7 g/t within the Makabingui gold resource.
The initial stage development is an open pit mining phase which will be extended to mine deeper resources by open pit or underground methods and further open pits are expected to be developed within the tenements and along an 8 km strike at Makabingui South.
The Makabingui gold project ore is free milling, accordingly ore treatment will be a low cost, conventional gravity and carbon-in-leach (CIL) processing circuit. The existing gravity plant at the Douta site is to be upgraded at low cost to include a CIL plant.
The initial development will mine high grade (>5.6g/t gold) open-cut pits, using existing infrastructure, equipment and a 300ktpa gravity processing plant. The high grade open-cut pits have been identified, designed, and material movement schedules completed within the 1 Moz gold resource.
The Senegal Government recognises the excellent potential to extend the resource base of the Makabingui project.
An underground scoping study has provided an assessment of the potential for mining the deeper resource from access declines within the pits to commence on completion of the initial phase of open-cut mining operations.
The study assumed that the existing infrastructure and 300 ktpa processing plant would be utilised, however a larger facility is expected as the project scope grows.
With the issuance of the permit and the favourable permit duration and tax exemptions, Bassari can proceed to finalise project finance with a number of banks and financiers already identified.