Name of the Project
Kalana Main gold project.

Location
Mali.

Client
Avnel Gold, through its 80% ownership in Société d’Exploitation des Mines d’Or de Kalana. The government of Mali holds a beneficial interest in the remaining 20%, which has antidilution and free-carry rights.

Project Description
Kalana Main has a maiden mineral reserve of 1.96-million ounces of gold and an updated measured and an indicated mineral resource estimate of 3.06-million ounces of gold.

A definitive feasibility study (DFS) completed on the project provides for 18 years of production from the Kalana Main deposit from a single openpit. A total of 228-million tonnes will be mined with a life-of-mine waste-to-ore ratio of 9.9:1, including the prestrip.

The deposit contains high-grade mineralised zones that will be extracted using selective mining using 5 m benches. Bulk mining of the waste zones will be conducted on 10 m benches.

The mine area consists of a weathered zone to an average depth of 60 m below surface, which is amenable to free digging. The mining schedule targets the areas of saprolite that will generate higher cash flow early in the mine life. The prestrip of six months will provide ore stockpiles to allow for the processing of higher-grade in the early years of the mine life.

Mining will be conducted by the owner, while maintenance of the openpit mining machinery will initially be undertaken by the original-equipment manufacturer to ensure fleet availability. The maintenance plan provides for a five-year handover period to the owner after completion of the initial capital purchase of the full fleet component.

Run-of-mine ore will be delivered from the mine to the processing plant, which consists of a conventional two-stage crushing circuit and a single-stage milling circuit to achieve a target grind size of 80% passing 75 µ. The processing plant design is based on yearly throughput rates of 1.5 million tonnes-a-year for saprolite and 1.2-million tonnes a year for saprock and fresh rock material.

Gold will be extracted by gravity concentration and a carbon-in-leach (CIL) plant to produce a gold doré using elution, electrowinning and smelting. Gold is recovered from the loaded carbon in an elution and electrowinning circuit and will be poured into doré bars on site.

Life-of-mine (LoM) average recovery is projected to be 92.7% (including tailings), resulting in LoM production of 1.82-million ounces.

The plant design philosophy incorporates a requirement that the processing plant be built in such a way that it expedites the construction of the leaching and adsorption circuit to process historic tailings from the underground Kalana gold mine before the hot commissioning of the mill.

These tailings are intended to be recovered using hydraulic mining and processed through the CIL circuit over five months and then for three months during the hot commissioning of the mill. This represents an opportunity to generate precommercial production cash flow that will partially offset development capital requirements.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $196-million and an internal rate of return of 38% using a base case gold price of $1 200/oz, with a payback of 1.2 years from the start of commercial production.

Value
The initial cost to achieve commercial production is estimated at $196.3-million.

Major capital items are the processing plant and plant infrastructure, buying the mining fleet, construction of the tailings storage facility, initial phases of the resettlement action plan, and owner’s costs.

Duration
Not stated.

Latest Developments
None stated.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Avnel Gold, tel + 44 1481 755 860 or fax + 44 1481 713369.