Name and Location
Kobada gold project, Mali.

Client
African Gold Group.

Project Description
The project has a total measured and indicated resource of 36-million tonnes grading 1.05 g/t of gold. Inferred resources are estimated at 39-million tonnes grading 1 g/t of gold.

A scoping study completed on Kobada has demonstrated robust project economics for a 1.6-million-tonne-a-year gravity concentration and concentrate leaching operation, followed by intensive leaching of the concentrates, electrowinning and smelting to produce gold doré. The mining operation is expected to be simple, as the saprolite rocks are completely weathered and free digging, which negates the need to drill and use explosives.

Initial mining will be through two starter pits before stripping to the final pit limits begins in Year 4, with a consequent increase in strip ratio. The inpit mining inventory is estimated at 24-million tonnes at a diluted grade of 1.01 g/t of gold, containing more than 778 000 oz of gold.

The processing concept is to remove most of the gangue material – the matrix of rock that does not contain gold – during the initial stage of the process. Traditional carbon-in-pulp plants rely on the crushing and grinding of 100% of the feed for the leaching process. This requires large, power-intensive crushing and milling equipment, which is expensive to buy and operate. The Kobada process flowsheet requires washing the ore and the subsequent crushing of a small percentage of the coarser quartz rocks within the saprolite. It is expected that a vertical impact crusher will have installed power of only 200 kW.

Preconcentration will involve two-stage hydrocyclones that reject the fine-size fraction of –0.2 mm.

Gravity concentration will further reduce the volume of the material from preconcentration. The concentrate will then be milled traditionally before passing to an intensive leach reactor.

Net Present Value/Internal Rate of Return
The project has a net present value at a 5% discount of $172-million and an internal rate of return of 62%, with payback within 18 months of initial production.

Value
Total preproduction capital is estimated at $46.6-million, including a contingency of $6.1-million.

Duration
Not stated.

Latest Developments
Progress on the feasibility study is significant, with about 80% of the study complete. Much of the key data and studies that support the PEA is of a very high level of confidence; however, the requirement to complete geotechnical drilling for the final pit shell design and detailed engineering for the tailings storage facility will require more time, necessitating completion of the final study in early 2015.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
African Gold Group, tel +1 647 775 8538, fax +1 647 775 8301.