Name and Location
New Luika gold mine (NLGM) project, Tanzania.

Client
Shanta Gold.

Project Description
The underground feasibility study completed on the NLGM provides for the extraction of 1.57-million tonnes over six years at a grade of 6.5 g/t,
producing 310 000 oz.

The base case mine plan envisages:
– ongoing surface mining and the tailings recovery project, and incorporates the underground mining operation;
– underground operations providing an extension of high-grade ore supply to maintain an average NLGM production of 84 000 oz/y over the next five years, with potential to further optimise the schedule; and
– a separate tailings recovery project producing a further 19 000 oz.
The base case mine plan provides for the extraction from mining of 2.79-million tonnes for the production of 443 000 oz from January 2016 to 2022 – 133 000 oz from the openpit and 310 000 oz from underground.
Probable reserves for surface and underground are estimated at 2.65-million tonnes at 5.9 g/t gold.

Total resources outside of the base case amount to 6.64-million tonnes at a grade of 2.41 g/t.

These resources, which can potentially benefit from further exploration, have been prioritised for further evaluation and have the advantage that all are located within the current mining licence, enabling quick access to early production.

Net Present Value/Internal Rate of Return
The underground feasibility study has estimated a net present value (NPV), at an 8% discount rate of $72-million and a pretax internal rate of return (IRR) of 56%, with a three-year payback.

The post-tax NPV for the base case plan from January 2016, at an 8% discount rate and a gold price of $1 200/oz, is estimated at $110.4-million.

The base case tailings project has a projected NPV, at an 8% discount rate, of $5.1-million, and a pretax IRR of 49%.

Value
Preproduction capital expenditure is estimated at $38.4-million, comprising $8.2-million for surface and underground fixed infrastructure, $14.5-million for mobile equipment, $8.2-million for lateral and vertical development and $7.5-million for the power plant upgrade. The underground mining equipment includes a 5% contingency within an overall contingency for all capital purchased items of 8%.

Duration
Key milestones for the project are the start of portal development in the second quarter of 2016, with underground production scheduled from the second quarter of 2017.

Latest Developments
None stated.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Shanta Gold, tel +255 22 2601 829, fax +255 22 2112 341 or email Info@shantagold.com.