Dual-listed Avesoro Resources has recorded positive results from the prefeasibility study (PFS) for its New Liberty gold mine, in Liberia.
The PFS included an updated mineral resource and mineral reserve estimate, maiden mineral reserves at the Ndablama satellite deposit and an updated life-of-mine (LoM) plan, incorporating the transition to underground mining operations.
The decision to transition to underground mining operations and undertake an updated PFS at New Liberty reflected the significant improvement in the level of confidence in the mineral resource following an extensive drilling programme over the last 12 months.
The PFS shows a significant positive impact on the value of New Liberty and the economics of the mine.
The PFS has indicated a seven-year LoM extension to 2029, based on current proven and probable mineral reserves, with potential to extend the LoM further through the drilling of prospective satellite prospects across the company’s 1 394 km2 exploration portfolio surrounding New Liberty.
Proven and probable mineral reserves increased by 89% to 17-million tonnes, containing 1.36-million ounces of gold, grading 2.49 g/t.
The indicated, measured and indicated mineral resource of 20.47-million tonnes, is estimated to contain 1.75-million ounces of gold, grading 2.66 g/t.
New Liberty also has an indicated inferred mineral resource of three-million tonnes, containing 271 000 oz of gold, grading 2.8 g/t.
The New Liberty mineral resource remains open down dip, while the Ndablama mineral resource remains open down dip, as well as along strike.
Additional resource development drilling in these areas has the potential to increase the resource base and infill drilling has the potential to convert a further portion of the existing inferred mineral resources to the indicated mineral resource category.
The total forecast recovered gold is 1.26-million ounces over the LoM.
Average forecast yearly gold production is about 114 500 oz over an eleven-year LoM, from 2019 to 2029.
Total development capital cost is estimated at $35.9-million.
Average LoM operating cash costs are estimated at $767/oz and all-in sustaining costs (AISC) at $862 /oz.
The post-tax net present value (NPV) is estimated at $286-million at a 5% discount rate and a $1 300/oz gold price and LoM free cash generation are forecast at $370-million.
As part of the PFS, the company has revised the mining schedule at New Liberty to take into account the transition of New Liberty from a solely openpit operation to a combined openpit and underground mining operation.
As a consequence, New Liberty is now entering a period of higher waste stripping to complete the final openpit pushback and prepare the pit for the development of underground operations and, as a result, the AISC for New Liberty will temporarily increase as the company undertakes this waste stripping that will be completed during this year.
The company has held discussions with a number of openpit mining contractors and received preliminary quotations, which could enable the company to further lower its openpit mining costs in future years.
The company is also reviewing the potential for a heap leach operation at Ndablama with a view to further optimising the value of the asset, informed Avesoro CEO Serhan Umurhan in a statement on Wednesday.
PRODUCTION GUIDANCE
The company’s consolidated 2019 gold production is expected to be between 210 000 oz and 230 000 oz.
Consolidated 2019 operating cash costs are expected to be between $850/oz and $910/oz, while the consolidated AISC is expected to be between $1 110/oz and $1 190/oz, which includes a higher waste to ore strip ratio of 22:1 and preparation for underground development at New Liberty.
The company indicated that it expects to invest $45.1-million in capital expenditure, of which $43.4-million is sustaining capital and $1.7-million relates to the development of underground operations at New Liberty.