PERTH (miningweekly.com) – A scoping study into the Diamba Sud gold project, in Senegal, has proven positive for ASX-listed Chesser Resources.

The study estimated that the project would produce 704 000 oz of gold over a seven-and-a-half-year mine life, at an average all-in sustaining cost of $820/oz, with 244 000 oz to be delivered over the first two years of production.

The scoping study estimated a post-tax net present value of A$419-million and an internal rate of return of 59%, and estimated a pre-production capital cost of $159-million, which included a $23-million contingency.

The scoping study is based on the 781 000 oz gold maiden mineral resource inventory covering Area A and Area D deposits, and a standard two-million-tonne-a-year carbon-in-leach operation.

“These excellent scoping study results clearly demonstrate that there is a low risk and very robust potential future gold mine at Diamba Sud,” said Chesser MD and CEO Andrew Grove.

“The project economics are expected to improve with future growth in mineral resources associated with the current drilling campaign which is focussed on defining the new discovery at Karakara and extending the resources at Areas A and D, as well as exploration leading to new discoveries. Relative to the company’s current market capitalisation of some A$50-million, the scoping study net present value of approximately A$560-million and resource growth potential at the project highlights the potential for significant future value creation for Chesser shareholders.”

An extensive 15 000 m to 20 000 m drill programme has commenced to aggressively target resource definition and expansion at Areas A, D and H and to systematically explore other prospective targets on the Diamba Sud exploration tenement, with an updated mineral resource estimate expected in the second half of the year.

Chesser will also advance a definitive feasibility study on the Diamba Sud project, and a final investment decision is planned within the next 18 to 24 months.