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Bassari's Senegal gold project proves profitable

Bassari's Senegal gold project proves profitable

Photo by Reuters

26th June 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Junior company Bassari Resources on Thursday reported that its Makabingui gold project, in Senegal, will require a $12-million capital investment to allow for the mining of about 171 000 oz of gold, a feasibility study has found.

The study indicated that the 11.9-million-tonne resource, grading 2.6 g/t gold, could deliver 50 000 oz/y of gold over a three-and-a-half year mine life.

The study was based on a 300 000 t/y hard rock operation, with ore initially sourced from four high-grade openpit mines.

“The outstanding results of the Kakabingui feasibility study confirms that we have a high-grade, highly profitable project which will deliver significant free cash flows,” said Bassari MD Jozsef Patarica.

The feasibility study estimated that the project would have a net present value of some $63-million, an internal rate of return of 404%, and would deliver a revenue of some $205-million at a gold price of $1 200/oz.

“The considerable existing infrastructure and mobile equipment in Senegal reduces both the capital cost and lead time to gold production, which is reflected in a very quick payback,” Patarica said.

Cash costs for the project have been estimated at $683/oz, with payback scheduled within only 12 months from the start of production.

Patarica said on Thursday that the company was considering a number of funding options to develop the Makabingui gold project.

“With its low capital cost, high-grade and metallurgical recovery, strong cash flow and quick capital payback, interest from a number of funding sources has been received.”

Meanwhile, the application to convert Bassari’s Sambarabougou exploration permit to a mining production permit has been lodged with the relevant authorities, and the permits were expected shortly.

Edited by Creamer Media Reporter

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