JOHANNESBURG (miningweekly.com) – A preliminary economic assessment (PEA) has revealed that the Mozambique-based Fair Bride gold deposit could be developed at an initial $28.4-million, to produce 46 700 oz/y for the next seven years, ASX-listed Auroch Minerals has reported.

The study, which confirmed the technical and economic viability of the deposit within the Manica gold project, showed total gold production of 331 000 oz from openpit and shallow underground mining over seven years, including a further year of treating low-grade stockpiles.

“I am excited with the results of this PEA that showed a low-cost route to gold production for Fair Bride with little technical risk,” said Auroch CEO Dr Andrew Tunks in an update to shareholders.

The group would initially target output of 25 000 oz of gold for the first year of full production after ramp-up, with the high-grade ores processed as a priority. The low-grade ores would be stockpiled for processing at a later stage.

The PEA showed an all-in sustaining cash cost of $769/oz from a 500 000-tonne-a-year plant, an $82.4-million post-tax cumulative net cash flow over the life of the mine at a gold price of $1 250/oz and payback of three years from first ore, with the $14.8-million underground development, starting in year four, funded from cash flows.

Net present value was expected to be $50.3-million, while the internal rate of return was tagged at 57.5%.

The PEA was based on the measured and indicated mineral resource estimates of 9.5-million tonnes at 3 g/t for a contained 923 000 oz of gold at a cutoff grade of 1 g/t of gold.

“Beyond the immediate results, I am also excited by the high-quality exploration opportunities offered on the virtually unexplored Mozambique half of the Greenstone belt.

“Over two-million ounces of gold have been produced on the Zimbabwean side of the border and there are wonderful opportunities ahead for Auroch as the first mover on the gold belt in Mozambique,” Tunks concluded.