ASX- and TSX-listed West Africa-focused gold explorer, developer and producer Perseus Mining reports that its revis-ing and optimising of the life-of-mine plan (LoMP) at its flagship Edikan gold mine (EGM), in Ghana, has resulted an increase in the mine life by 0.6 years to 2024.

The revised LoMP is based on the Abnabna, Fobinso, Fetish, Chirawewa, Bokitsi, Esuajah North and Esuajah South openpits and designed using $1 200/oz pit shells.

While the pits currently contain 6% less gold than outlined the previous LoMP for EGM, which was based on the mines 2012 ore reserve, the updated LoMP results indicate a 15% decrease in the tons of ore and waste moved, a 16% decrease in the life-of-mine strip ratio and a steady head grade, which will all result in material cash-flow benefits.

EGM, formerly known as the Central Ashanti Gold Project, comprises a group of large gold deposits located in the Ashanti gold belt.

The current measured and indicated mineral resource estimate for EGM, undertaken by mining consultancy RungePincockMinarco (RPM) in accordance with the Joint Ore Reserves Committee Code and taking into account mining depletion as at April 30, 2013, is 162.5-million tons grading at 1.1 g/t of gold and containing 5.7-million ounces of gold.

A total of 77.4-million tons of material grading 1.0 g/t of gold and containing 2.4-mil-lion ounces of gold has been classified as an inferred mineral resource.

An independent estimate of the ore reserves for EGM, as of July 1, 2013, also undertaken by RPM, indicates proved and probable ore reserves of 82.7-million tons of ore grading 1.1 g/t of gold and containing 2.925-million ounces of gold.

The Bokitsi deposit, which is part of EGM, has an indicated resource of 212 000 oz and an inferred resource containing 89 000 oz of gold, while the measured and indicated resource at the Esuajah North deposit, also at EGM, is 920 000 oz.

The revised LoMP for EGM indicates that while the production and cost guidance – about 200 000 oz at an all-in site cash cost of about $1 100/oz – remains unchanged for the 2014 financial year, plans are in place for increased production for the 2015 to 2018 financial years to 240 000 oz/y at an average all-in site cash costs of $1 050/oz.

Based on the revised mineral resource estimate, Perseus Mining has examined a range of development scenarios to identify the scenario that will maximise the net present value of EGM.

This exercise involved varying key parameters, including the pit development sequence, applying technical assumptions that reflected actual operating parameters and working within known constraints such as the expected timing of access to new mining areas.

The mine design philosophy included minimising investment in the 2014 financial year without compromising future mining by mining ore from the existing pits and reclaiming ore from existing ore stockpiles; resuming development of the Eastern pits from July 2014, including the new Chirawewa and Bokitsi pits, not previously included in the ore reserves; prioritising cash generation rather than marginal gold production; and preserving the capacity to expand the pits in higher gold price environments.

Perseus Mining MD Jeff Quartermaine says the revised LoMP for EGM represents a robust and financially attractive way forward for the operation, as the plan “clearly indicates that, at a gold price of $1 200/oz, a significant amount of cash low can be generated at Edikan and, even at lower gold prices, the operation remains viable, based on our assumptions”

.

“Going forward, our financial performance will continue to be highly leveraged to the gold price and operational improvements, and the revised LoMP represents an important element in our ongoing efforts to improve our operating performance on the EGM site,” he says.