PRODUCTION INCREASE
The revised mine plan is expected to result in a 39% increase in forecast gold production from 2017 to 2023, from 359 000 oz to 500 000 oz
Photo by: Bloomberg
East Africa-focused gold producer, developer and explorer Shanta Gold has announced a revised mine plan for its New Luika gold mine, in Tanzania, for January 2017 to December 2023, as well as an updated reserve plan for the mine.
“The revised mine plan highlights the true prospectivity and future long life of New Luika . . . The plan provides for a longer mine life, increased production and, most importantly, greater returns for all Shanta stakeholders,” Shanta CEO Toby Bradbury said in a statement issued last month.
The revised mine plan is expected to result in a 39% increase in forecast gold production from 2017 to 2023, from 359 000 oz to 500 000 oz, as well as a four-year extension of the use of the New Luika gold mine plant based on current reserves. Production is expected to average 85 200 oz/y of gold from 2017 to 2020.
Under the revised plan, average cash costs and all-in sustaining costs (AISCs) are estimated at $577/oz and $736/oz respectively. The project’s net present value (NPV) has also been revised to $123- million, at an 8% discount rate, based on a gold price of $1 200/oz.
Meanwhile, the updated New Luika gold mine reserves include 3.64-million tonnes at 4.4 g/t for 515 500 oz, including openpit reserves of 1.26-million tonnes at 1.8 g/t for 71 000 oz, and underground reserves of 2.39-million tonnes at 5.8 g/t for 444 500 oz.
Gold production for the first quarter of 2017 has been in line with expectations and Shanta remains on track to achieve full-year guidance of 80 000 oz to 85 000 oz at an AISC of $800/oz to $850/oz, the company reports.
New Luika exceeded its 2016 guided production of 82 000 oz to 87 000 oz, producing 87 713 oz.
This year, the New Luika gold mine’s production will comprise a blend of underground-mined, high-grade ores and smaller- scale, surface-mined lower- grade resources.
The plan provides for the extraction of 3.64-million tonnes for the production of 515 500 oz from 2017 to 2023, with 71 000 oz produced from openpit operations and 444 500 oz from underground operations.
The balance of process feed ore is derived from 11 500 oz of stockpiles, gravels and mineralised waste.
Underground mining is under way at Bauhinia Creek, Luika and Ilunga to depths of 350 m, 315 m and 250 m below surface respectively, with the mining methods being predominantly longhole openstoping, with backfill where warranted.
Surface mining is under way at Ilunga, Jamhuri, Shamba and Elizabeth Hill. At this stage, the Black Tree Hill deposit is not included in the plan.
Underground operations accessing high-grade orebodies provide most of the plant feed, with 2.4-million tonnes at 5.8 g/t for 444 500 oz over the life of the mine.
Further, a separate tailings recovery project, scheduled from 2019, will produce a further 14 600 oz, with a standalone project NPV of $2.8-million at an 8% discount rate and a pretax internal rate of return of 39%.
Under the new mining plan, the process plant achieves full capacity use up 2022. It is expected that additional resources from the existing portfolio of opportunities within the mining licence and Shanta’s surrounding exploration licences will provide further mine life and optionality for New Luika.
The potential remains to further enhance the mine schedule, with the addition of the high-grade Ilunga underground reserve an option, Shanta reports.
Continuing Prospects
Bradbury noted in the statement that “considerable depth” had been added to an already robust business case, owing to the company’s delivery over the past 18 months, with the company looking to extend the planning horizon for the New Luika operation again in future.
“We will continue to explore on-mine to bring existing indicated and inferred resources into the future mine plan and also on surrounding prospects to define new resources,” he said.
Since the base case mine plan was published in September 2015, the Elizabeth Hill and Ilunga reserves had been successfully proven and incorporated into the revised mine plan, Bradbury added. He noted that Shanta would take the same approach following positive results recently announced at the Nkuluwisi prospect and given the highly prospective ground Shanta holds in the Lupa goldfield.