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Liberian gold miner driving near-mine satellite exploration

14th April 2017

     

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TSX- and Aim-listed West African gold producer Avesoro Resources forecasts a strong outlook for 2017, with its main aim for the year being the discovery of additional mineable satellite resources within close proximity to its New Liberty gold mine, in Liberia.

With numerous high potential targets having been identified within a prospective 1 059 km² licence portfolio, the company plans to intensify its exploration programmes, budgeting $5-million over 2017 for this purpose.

Drilling programmes are planned for the Cape Mount and Silver Hills satellite targets, as is an ongoing evaluation programme ranking all 30 previously identified exploration targets, according to a corporate presentation made in February at this year’s Investing in African Mining Indaba, in Cape Town.

The start of generative fieldwork at the Ndablama target in preparation for a drill programme to test extensions and increase the existing resource was also discussed.

Avesoro CEO Serhan Umurhan said in January that the company remained committed to a disciplined approach to capital allocation and enhancing the mine life of New Liberty through a near-mine exploration programme, scheduled to start during the first quarter of 2017.

The company emphasised in its corporate presentation that it had recapitalised under a new management team with the operating experience to “deliver a high-margin mine”.

Capital expenditure in 2017 is forecast to be about $24-million, comprising $10-million in nonsustaining capital allocated to enhance operations and $14-million in sustaining capital, a significant portion of which is nonrecurring and relates to expenditure deferred from previous years.

By the second half of the year, Avesoro expects a revised life-of-mine plan for New Liberty, where, as of February, operations stabilised over the last six months and significant improvements were expected in 2017 as further upgrades were completed.

Processing operations at New Liberty stabilised, with plant use in the fourth quarter of 2016 at 91% from 73% in the third quarter. Processing unit costs also declined and gold production reached 18 872 oz in the fourth quarter, increasing 34%, compared with third-quarter output.

These improvements were achieved through the recruitment of additional, experienced process plant and mining operations staff and supervisors, proactive preventive maintenance schedules and infrastructure improvements, and the undertaking of incremental improvements to the processing plant and detoxification circuit.

The ongoing plant optimisation and upgrade activities at New Liberty include the installation of new pressure swing adsorption oxygen plants to further boost gold recovery in 2017.

During the year, Avesoro further plans to significantly increase its production profile while reducing the cost thereof. The 2017 gold production target for New Liberty is between 90 000 oz and 100 000 oz at cash costs of between $750/oz and $800/oz and all-in sustaining costs of $925/oz to $975/oz.

In terms of commercial and legal improvements, Avesoro explains that onerous contracts have been exited and key outsourced operations brought in-house, a revised environmental operating permit has been granted, a civil and earthworks arbitration claim was successfully dismissed on January 23, and lender credit approval has been obtained for revised, improved finance facility terms as of January 30.

Aversoro highlighted that it had successfully transitioned to an owner-operator mining operation, improving equipment availabilities and increasing mining rates, while also reducing mining unit costs in the second half of 2016, and will continue to bring outsourced activities in-house in 2017.

During the year, it also plans to review its ultimate pit shell and increase contained gold ounces.

More about Liberty
New Liberty has an estimated proven and probable mineral reserve of 8.5-million tons containing 924 000 oz of gold, grading 3.4 g/t, and an estimated measured and indicated mineral resource of 9.7-million tons containing 1 143 000 oz of gold, grading 3.63 g/t. Its estimated inferred mineral resource is 5.7-million tons containing 593 000 oz of gold, grading 3.2 g/t. A definitive feasibility study has been completed, the first gold pour has taken place and commercial production has been declared.

New Liberty is located within the southern block of the 100%-owned Bea Mountain mining licence. This licence, which hosts the Ndablama, Gondoja, Weaju and Leopard Rock gold projects, covers 478 km² and has a 25-year renewable mineral development agreement.

Ndablama has an indicated mineral resource of 386 000 oz of gold, grading 1.6 g/t, and an inferred mineral resource of 515 000 oz of gold, grading 1.7 g/t.

Weaju has an inferred mineral resource of 178 000 oz of gold, grading 2.1 g/t. The 473 km² Yambesei, 56 km² Archean West, 36.6 km² Mabong and 15.6 km² Mafa West licences will also be subject to preliminary reconnaissance geological work.

Avesoro plans to become a premier midtier African gold producer and developer by further stabilising and growing production at New Liberty, in addition to pursuing selective accretive merger and acquisition opportunities.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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