TSX-V-listed junior Orca Gold has announced positive results of a feasibility study for the Block 14 gold project in Sudan, unveiling an expanded project that will produce nearly 230 000 oz/y in its first seven years of operations.
The feasibility study is based on a six-million-tonne-a-year operation delivering an average of 167 000 oz/y over a 13.6 year mine life. In the first seven years of operations, production will average 228 000 oz/y at a cash cost of $697/oz.
The study calculated an indicated resource of 79.9-million tonnes at 1.30 g/t gold for 3.34-million ounces and an inferred resource of 18.5-million tonnes at 1.2 g/t for 711 000 oz.
This compares with the May 2017 revised preliminary economic assessment that worked on an in-pit mineral resource of 41-million tonnes at 1.46 g/t for 1.93-million ounces in the indicated category and 3.4-million tonnes at 1.56 g/t for 173 000 oz in the inferred category, with a mill throughput of 3.4-million tonnes.
The feasibility study improved the project economics, calculating a net present value, using a discount of 5%, and a gold price of $1 250/oz, of $403-million, an internal rate of return of 24.2% and a payback period of 3.9 years.
Preproduction capital is estimated at $328-million and sustaining capital at $181-million.
“At a production rate of almost 230 000 oz of gold per annum for the first seven years, a low production cash cost per ounce and a significant exploration upside, this project stands out not only in Africa, but on an international scale," said Orca CEO Rick Clark.
Final permitting for Block 14 is in progress.
Earlier this year, Australian miner Resolute bought a 15% interest in Orca to get a foothold in the "gold rush" in that country.
Sudan’s increasing political stability and prospective underexplored geology has seen the country rapidly emerging as one of the largest producers of gold in Africa.