Burkina Faso – An updated scoping study into Gryphon Minerals’ flagship 3.6 Moz Banfora gold project in Burkina Faso has significantly increased the projects economics.

The study increases the projects net present value by 233% to A$210 million with an internal rate of return of 42% at an all-in sustaining cost of US$800/oz.

The Banfora gold project, located in the south-west of Burkina Faso, is a significant undeveloped gold resource in West Africa
The Banfora gold project, located in the south-west of Burkina Faso, is a significant undeveloped gold resource in West Africa

The study considers the development of an initial start-up 2 Mtpa heap leach operation, and upside potential with the expansion of the facility through the addition of a conventional 1Mtpa carbon-in-leach (CIL) processing plant.

The 1 Mtpa CIL has the flexibility to be added onto the 2 Mtpa heap leach operation either at the commencement of development or at a later date using cash flows from the heap leach operation.

The optionality to develop the heap leach project as a standalone operation is retained given the benefits of lower up-front capex and quicker development time-frame.

“Retaining this optionality gives Gryphon the flexibility to upscale the project using a low-cost staged approach, potentially from cash flows of the initial start-up heap leach operation at the Banfora gold project,” Gryphon Minerals MD Steve Parsons adds.

The company is undertaking due diligence with Macquarie Bank for project debt funding to support construction of the initial 2 Mtpa start-up heap leach operation, expected to be completes within the second half of 2015.

The study estimates a capital spend of US$85 million for the start-up of the 2 Mtpa heap leach operation including all infrastructure, working capital and contingencies and a capital outlay of US$45 million for a 1Mtpa CIL add-on.

“With the optimisation and additional capacity studies completed and a granted mining permit in place, Gryphon can now move to completion of debt funding due diligence which is one of the final hurdles to commencing development at Banfora,” says Parsons.

The Banfora gold project, located in the south-west of Burkina Faso in a major gold producing district, also host to Randgold Resource’s Tongon Mine, is a significant undeveloped gold resource in West Africa and is one of only a few new large scale greenfields discoveries in the world. The mineral resources are shallow with 90% above 150 meters vertical depth and they remain open at depth and along strike.

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