Ghana – Gold mining company Golden Star Resources, which recently completed its feasibility study for its Prestea underground mine in Ghana, provides optimism for production start-up early in 2017.
Feasibility study highlights
- Post-tax Internal Rate of Return of 42% at $1 150/oz gold price
- Net Present Value, assuming 5% discount rate of US$124 million at $1 150/oz
- West Reef probable mineral reserves as of 3 November 2015 are 1.04 Mt grading 14 g/t of gold for 469 000 oz of gold
- West Reef indicated mineral resources as of 24 October 2015 of 1.14 Mt grading 18.4 g/t for 675 000 oz of gold inclusive of mineral reserves
- $63 million of capital required to commercial production which includes $20 million of capitalised operating costs
- Life of mine (LOM) of five and a half years, after 12 months of rehabilitation and seven months of development to commercial production
- LOM cash operating costs of $462/oz
- LOM all-in sustaining costs of $603/oz
- LOM all-in costs of $756/oz
- Payback period of 2.9 years from the start of project
“This feasibility study confirms our expectations from the PEA and I am very encouraged by the increase in reserves as a result of the additional drilling that was completed. The increase in mine life allows us to consider additional upside resource development going forward,” says Sam Coetzer, President and CEO of Golden Star.
“The feasibility study considers a new standalone plant, however, the company is reviewing the option of modifying its currently installed processing infrastructure to reduce capital spending. Under these conditions the feasibility study indicates a robust project with significant upside.”
“Additionally, with the current production from the Prestea South open pits, we believe there are further synergies to be unlocked by the deferral of plant modification capital without negatively impacting upon the production profile. Prestea Underground will be viable in the current gold price environment and, with the funding we have arranged, we expect to bring it into production by early 2017.”
Prestea is an underground mine which has been in existence for over 100 years and has historically produced an estimated 9 Moz of gold. It was acquired by Golden Star in 2002 and placed on care and maintenance while evaluation and exploration activities continued.
The mine, located 16 km south of the Bogoso processing plant along a dedicated haul road and adjacent to the town of Prestea, is accessible by road from Accra as well as via the port city of Takoradi 150 km to the south.
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