Burkina Faso – The Sanbrado feasibility study envisages an initial nine year mine life, with strong early cashflow and a rapid payback of capital.
Project owner, gold developer West African Resources notes that the construction at the newly renamed Sanbrado project (formerly Tanlouka) is expected to commence in late 2017 with an 18 month construction schedule leading to targeted gold production in the first half of 2019, after which it is forecast to produce 150 000 ozpa of gold over the first three years.
The ‘shovel ready’ Sanbrado project has already been granted its mining and environmental permits and camp construction and early site works are already under way.
The feasibility study estimated that project would have a capital expenditure of US$131 million, inclusive of pre-production mining ($6.9 million) and a $12 million contingency.
The study estimated an average cash cost of f $672/oz (including royalties) in the first three years of production and a life of mine average cash cost of $717/oz (including royalties)
A low all-in sustaining cost (AISC) of $708/oz is anticipated over the first three years and $759/oz over the LOM.
The project has a pre-tax NPV of $143 million, a 27% IRR and 2.1 year payback on initial capital.
“From high-grade discovery to delivering a robust feasibility study in less than 12 months is an outstanding achievement,” says West African Resources MD Richard Hyde.
“The recent discovery of high-grade gold at M1South (which resulted in a 124% increase in indicated resources at M1 South) is the driving force behind the new project, which currently represents a high-margin, but high strip ratio open pit.
Hyde believes it is likely to be more cost effective to mine M1South with a smaller open-pit followed by underground mining, which is the focus of current development work and will be reported in an optimised definitive feasibility study, expected by the third quarter of 2017.
“The next steps are straight-forward – with $17 million cash on hand we are well-funded to carry out work programmes, including the optimisation study, which is likely to drive mining costs significantly lower. Drilling programmes will also focus on converting existing inferred resources within and beneath reserve pit-shells, and drilling ‘open at depth’ extensions at M1 and M5.
Hyde noted that open pit feasibility study demonstrates very strong early cashflow, rapid payback of capital and will allow the company to advance discussions with project lenders while completing optimisation work and further drilling.