PERTH (miningweekly.com) – An updated mineral resource estimate for the Karakara and Bougouda deposits, at ASX-listed Chesser Resource’s Diamba Sud gold project, in Senegal, has seen the company update the project’s economics.
A March scoping study into the Diamba Sud project estimated a project life of 7.5 years producing 704 000 oz of gold, including 244 000 oz in the first two years of production. The study estimated an initial capital outlay of $159-million, generating a net present value (NPV) of $301-million at a gold price of $1 800/oz, and an internal rate of return (IRR) of 59%, with a pay-back period of 15 months.
Average all-in sustaining costs (AISC) for the project were estimated at $820/oz.
Chesser on Monday told shareholders that total project mining inventory had now increased by 17%, to 13.9-million tonnes at 1.7 g/t gold for 762 000 oz of contained gold. The project is now expected to produce 715 000 oz of gold over the 7.5-year mine life, averaging around 100 000 oz/y at an AISC of $849/oz.
During the first two years of production, Diamba Sud is now expected to produce 223 000 oz at an average AISC of $612/oz.
The project’s NPV, at a gold price of $1 800/oz, has now been estimated at $296-million while its IRR is estimated 55%, with the pay-back period now estimated at 17 months from commercial production.
Capital cost estimates for the project decreased by $11-million to 149-million.
“The updated scoping study results further demonstrate that there is a low risk and a very valuable potential future gold mine at Diamba Sud,” said Chesser MD and CEO Andrew Grove.
“The project economics continue to improve as we refine the project and discover then convert additional mineralisation into higher confidence mineral resources. Based on the drilling underway at Area D and other numerous prospective targets, we expect resource growth to continue at Diamba Sud and also on the adjacent Bondala tenement. Mineral resources have grown at Area D with the extension of mineralisation to the west which remains open in that direction.”