West Africa-focused gold exploration company Cora Gold says the results of an initial scoping study on its Sanankoro project, in Mali, have validated the project's future economic potential.
The study, overseen by consultants Wardell Armstrong International (WAI), investigated the potential development of the near-surface oxide resources.
"This scoping study shows Sanankoro has the potential to be a highly profitable standalone oxide mine, delivering a high internal rate of return (IRR) and short capital expenditure (capex) payback, with an annual average free cash flow of over $19-million at a $1 400 gold price," Cora CEO Bert Monro commented in a release on Thursday.
Aim-listed Cora pointed out that the scoping study had determined that a heap leach processing methodology was preferable over a carbon-in-leach methodology.
Based on a gold price of $1 400/oz and a 1.5-million-tonne-a-year heap leach mine, the project has an estimated IRR of 84% and will require about $20.6-million in pre-production capex.
The scoping study estimates a payback period of less than 18 months, average free cash flow generation of $19-million a year and a net present value of $30.9-million.
The mine is expected to deliver more than 45 000 oz/y of gold at an all-in sustaining cost of about $942/oz over an initial three-year mine life.
Cora believes there is good potential to increase the project's mineral resource as only about 25% of the total strike length of the potential mineralised zones identified on the permit area have been drilled.
"The key will be to drill out more oxide resources to extend the mine life and sustain the cash flow well beyond this maiden study. Drilling is currently ongoing and SRK's defined exploration target remains one-million to two-million ounces of gold to a depth of just 100 m," said Monro.