An updated prefeasibility study (PFS) into Aim-, ASX- and JSE-listed mineral exploration and development company Kore Potash' Dougou Extension (DX) project has extended the life-of-mine from 18.4 years to 30 years at a production rate of 400 000 t/y of potash, based on probable ore reserves.
The recently completed and updated PFS follows the completion of a review of the production target for the company's DX project, which is situated in the Sintoukola basin, in Congo-Brazzaville.
The initial PFS was published on May 13, with the updated version being reviewed by independent consultants Agapito Incorporated.
The scheduled extraction includes 34.5% of the inferred mineral resources which contributes 20% of the life of project.
These factors mean the approximate post-tax payback period from first production is 4.3 years. This is accounting for a net present value of $412-million and an internal rate of return of 23.4%, based on a real post-tax basis at life of project average granular potash price of $422 /t.
Following a review of the strategic options within the Sintoukola district, Kore formed the view that a reduced-scale potash development at the DX project has strong potential to expedite the company’s path to cash flow generation and consequently accelerate the subsequent development of the Kola project, also in the Sintoukola basin.
In terms of project resource estimates, the original PFS mine schedule was comprised solely of declared sylvinite ore reserves of 17.7-million tonnes, at a grade of 41.7% potassium chloride. The updated PFS left these reserves unchanged, with all key assumptions and modifying factors remaining valid.
Kore notes that the process of completing the updated PFS involved applying all modifying factors to that portion of indicated resources that were not converted to ore reserves and to inferred resources. As such, the company has sufficiently advanced all modifying factors on this material such as to have a reasonable basis for the view that eventual conversion to ore reserves is likely for a significant portion of this material.
As a result, the production schedule in the updated PFS includes 2.43-million tonnes of potash from indicated mineral resources and 2.31-million tonnes of potash from inferred mineral resources that were not part of the PFS mine schedule.
However, while the company notes that each of the modifying factors was considered and applied to this additional material, it also notes that there is no certainty of eventual conversion of this material to ore reserves or that the production target in the updated PFS will be realised.