Name of the Project
Kobada gold project.

Location
The project is located in the prolific Birimian greenstone belt, in southern Mali.

Project Owner/s
African Gold Group.

Project Description
The Kobada deposit is planned to be mined with a standard openpit mining method using articulated trucks and a hydraulic loader (hydraulic shovel or excavator). About 90% of the raw material to be mined is contained in the saprolite and laterite ores, and the vast majority will be free dig.

The openpit mining operation will last about five-and-half years, during which the lower-grade material will be stockpiled on a pad close to the primary crusher location.

The mine plan targets the higher-grade ore zone at the early phase of the project to feed into the process plant to produce 100 000 oz/y for the first five years, and thereafter lower production output as the grade drops and stockpiles are treated.

Total gold production of 728 654 oz has been estimated over the 9.4-year life-of-mine (LoM), based on current reserves.

Total proven and probable mineral reserve are estimated at 27.13-million tonnes grading 0.87 g/t gold for 754 800 oz of contained gold, a 48% increase from the mineral reserve estimate in the 2016 feasibility study.

The mining operations will be undertaken by a specialised contractor selected by African Gold. This contractor will be responsible for the management and maintenance of its own mining fleet and operators, while African Gold will oversee the mine planning and geological grade-control aspects of the operation.

The proposed process plant design is based on a proven and established gravity/carbon-in-leach technology, which comprises crushing, milling, and gravity recovery of free gold, followed by leaching/adsorption of gravity tailings, elution and gold smelting, and tailings disposal. Services to the process plant will include reagent mixing, storage and distribution, water, and air services.

The plant will treat three-million tonnes a year of saprolite ore or a blend of saprolite and laterite ore in a 90/10 split respectively to produce 100 000 oz/y of gold.

The tailings storage facility (TSF) is a high-density polyethylene-lined, full containment valley-type arrangement, with an LoM tailings storage requirement of 25.9-million tonnes at a deposition rate of three-million dry tonnes a year. The TSF infrastructure includes a slurry distribution pipeline, catchment paddocks, a toe drain system, an underdrainage system, a curtain drain system, a blanket drain system, a solution collection pipeline, collection sumps and manholes, a seepage cutoff trench, stormwater diversion trenches, emergency spillway, access roads and perimeter fence-line. A floating barge decants supernatant tailings slurry water and stormwater from the TSF back to the plant.

The TSF is to be constructed in phases over the LoM using openpit overburden material in three downstream lifts, following the construction of the initial starter embankment. The construction of Phase 1 comprises Phase 1A in the first year of construction and Phase 1B in the second year of construction.

There is no gold-refining capability in Mali and, therefore, doré produced at Kobada will be refined outside the country in either South Africa, Europe or Dubai.

The project will include the development of a hybrid solar photovoltaic, battery energy storage system and thermal power plant funded by an independent power producer

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $283.9-million and an internal rate of return of 45.5%, with a payback of 3.82 years from start of production, based on a $1 530/oz gold price.

Capital Expenditure
Total initial capital expenditure is estimated at $136.1-million, including a contingency of $11-million.

Planned Start/End Date
Construction of the process plant and associated infrastructure, including Phase 1 of the TSF, is expected to take 19 months. The process plant will be ramped up to produce nameplate capacity within the following two production months.

Latest Developments
None stated.

Key Contracts, Suppliers and Consultants
SENET (definitive feasibility study project manager); DRA/Met-Chem, a subsidiary company of DRA Americas (mine planning process); Maelgywn Mineral Services (metallurgical testwork); Epoch Resources (tailings storage facility study design); SENET and Bolloré Logistics (accessibility and transport/logistics); Africa and Business Consulting Mali ABS Africa Insuco Limited (environmental- and social-impact assessment)

Contact Details for Project Information
African Gold Group VP corporate development Daniyal Baizak, tel +1 416 861 2966 or email Daniyal.Baizak@africangoldgroup.com.