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Mali gold project earthworks completed

6th November 2015

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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Following the completion of the planned earthworks at its 1.8-million-ounce Yanfolila gold project, in Mali, the key focus for gold miner Hummingbird Resources will be on finalising the debt drawdown from West African gold exploration and mining company Taurus Gold to start full-scale construction of the mine in the near future.

The project will be funded through the company’s $75-million agreement with Taurus, combined with the funds from a recent $9.5-million fundraise.

“Taurus further extended the bridge facility by $5-million to $15-million for continued development work ahead of a full $75-million drawdown,” notes Hummingbird head of business development Robert Monro, adding that these proceeds would be used to start the initial pit dewatering and to acquire the land around the mine site.

This facility forms part of the two-phase debt facility announced in August 2014 that will enable Hummingbird Resources to fund the construction of the Yanfolila project through to first gold production.

He further reaffirms that Yanfolila’s first gold pour remains on track for 2016.

“Hummingbird expects to produce 100 000 oz in its first full year of production at full capacity, which is currently estimated to be 2017, after a ramp-up period post first gold pour,” Monro says, adding that the plant would have a one-million-tonne-a-year processing capacity.

The Yanfolila gold project has an indicated and inferred mineral resource of 20.1-million tonnes, grading 2.8 g/t of gold. It has a 6.5-year life-of-mine production at 79 000 oz/y of gold production.

“Further, Hummingbird Resources is completing a series of significant updates to the existing optimisation study, based on the technical improvements the company announced in July,” Monro explains. These updates, also comprising an updated mine plan and financial model, will be published in the near future, he adds.

Creamer Media’s Research Channel Africa in September reported that, the initial mine plan for the project was expanded in the recent optimisation study, “which highlighted robust economics for a . . . low-cost, high-grade gold project and the defined path to production”.

Despite the difficulties faced by the gold industry, led by the drop in gold prices from the market high prices in 2012, Monro believes Yanfolila would be fairly insulated from the market, at a production cost of $733/oz, even in an environment where gold is around $1 150/oz.

Monro therefore stresses that the company looks forward to building a robust mine, which will turn a good operating profit in a variable gold price environment.

The Dugbe Project
Meanwhile, Monro points out that the feasibility study for a hydroelectric power plant at its 4.2-million-ounce Dugbe gold project, in Liberia, is in its second phase, following the success of the first phase, which was completed in September.

Hummingbird notes that the preliminary assessment “demonstrated a range of options for the development of a sustainable and low-cost source of hydroelectric power for Dugbe and the south-east Liberian region”. Four run-of-river hydropower options, ranging from 15 MW to 30 MW, with varying intakes were assessed.

Hummingbird in April signed a hydroelectric collaboration agreement with project development fund IFC InfraVentures and energy company Aldwych International for development of the plant.

Consulting engineering company Knight Piesold has been contracted to conduct a prefeasibility assessment of the potential hydropower development on the Dugbe river and its major tributaries. The feasibility assessment will be finalised on completion of additional hydrological studies and topographic mapping in the second quarter of 2016.

Hummingbird stresses that this “hydropower development on the Dugbe river represents a legacy asset that will benefit the region by providing low-cost renewable energy long after mine closure to the communities in the region”.

A previous desktop scoping study for the plant considered an operational mine power demand of 30 MW. However, the updated average power demand for the Dugbe gold project is forecast at 16 MW, but with additional capacity for the local region to address the expected peak demands of 20 MW to 30 MW.

Further, Monro believes that the signing in July of a 25-year mineral development agreement with the government of Liberia for development of Dugbe has been a significant achievement in progressing the gold project.

New Frontier
The Dugbe gold project is located within the Birimian basin, the world’s second-largest gold producing region, which is characterised by exceptionally large, homogenous grade deposits.

Hummingbird completed a preliminary economic assessment for the project in April 2013, which demonstrated the viable economics of developing a 20-year gold mining project with initial gold production of 125 000 oz.

“Liberia is a virgin country for gold exploration. Since Hummingbird was able to find a material resource in a short timeframe, the company not only believes it has a world-class asset, but that it would also be able to discover significantly more ounces,” Monro concludes.

Edited by Leandi Kolver
Creamer Media Deputy Editor

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