Name of the Project
Nyanzaga gold project.

Location
The project is located in the Lake Victoria Goldfields region, in north-west Tanzania.

Client
The project is a joint venture between OreCorp and Acacia Mining.

OreCorp’s Tanzanian subsidiary has completed its earn-in obligations for the Nyanzaga gold project, and has exercised its option to gain full control of the project.

OreCorp has acquired a 25% stake in the project by spending about $14-million in completing a prefeasibility study (PFS) and additional feasibility study-related work.

The company has also acquired an additional 26% interest from project partner Acacia Mining for $3-million, taking its interest to 51%.

This agreement is subject to approval from the Tanzanian Fair Competition Commission and the newly established Mining Commission.

OreCorp has also signed a binding conditional heads of agreement with Acacia and the joint venture vehicle Nyanzaga Mining Company to gain full ownership of the project by making a further $7-milion payment.

Acacia will retain a net smelter return royalty capped at $15-million, which will be paid at 1%, with a gold price of less than $1 600/oz, and at 2% with a gold price of more than $1 600/oz.

The acquisition of the additional 49% interest in Nyanzaga is also conditional on Tanzanian regulatory approvals, on granting of a special mining licence for the project and on the parties’ entering definitive documents for the acquisition.

Project Description
A PFS on the Nyanzaga project has confirmed a robust project and has determined that a concurrent openpit and underground mine schedule represents the optimum mining sequence.

The openpit will deliver the base load of mineralised material over the life-of-mine and is expected to deliver about 1.75-million ounces of contained gold over its 12-year mine life – an increase of 25%, or 350 000 oz of gold, on the scoping study assessment.

Underground mining will start in Year 1, from a boxcut outside the openpit, and is expected to produce about 1.16-million ounces of contained gold, including underground development material. The underground will be developed to a depth of 800 m below surface, with the deposit remaining open at depth. Detailed metallurgical testwork in the PFS has confirmed gold recovery of 88% through a conventional four-million-tonne-a-year carbon-in-leach processing plant – an increase of 3% on the scoping study figure.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
Preproduction capital costs are estimated at $287-million, which includes a $33-million contingency. The change in capital from the $248-million in the April 2016 scoping study is largely because of the change in the mine schedule, resulting in an increased prestrip of 7.1-million tonnes, increasing the cost of the prestrip from $14-million to $36-million.

The process plant capital cost has increased by about $11-million, resulting from the reduced grind size (P80 of 75 μm, compared with P80 of 106 μm) and the inclusion of additional processing equipment to improve plant availability and operability. The higher initial capital cost, compared with the scoping study estimate, is offset by the increased average yearly life-of-mine (LoM) production and overall LoM ounces while retaining consistent capital intensity. Consistent with the scoping study, the capital estimate is based on a contractor mining scenario and, therefore, excludes capital for a mining fleet.

Duration
Not stated.

Latest Developments
The Tanzanian Fair Competition Commission has backed OreCorp’s plans to gain a majority interest in the Nyanzaga gold project.

OreCorp in July this year exercised its option to gain a 51% interest in the gold project after gaining an initial 25% interest in the project by spending $14-million on completing a PFS, and additional feasibility study-related work.

OreCorp was hoping to acquire a further 26% interest in the project from partner Acacia Mining for $3-million.

The transaction was still subject to the approval of the newly established Mining Commission, and the payment of $3-million to Acacia.

OreCorp has also entered into a completion agreement with Acacia to enable the company to progress to 100% ownership of the holding company for the Nyanzaga project, for a further $7-million payment. The move to full ownership is also conditional on Tanzanian regulatory approvals and the grant of the special mining licence for the project.

Following the completion of the transaction, Acacia will retain a net smelter return production royalty capped at $15-million.

OreCorp has told shareholders that a simplified ownership structure for the gold project would be beneficial to the project’s future development and will enable it to be best placed to provide significant benefits for Tanzania and all stakeholders.

A definitive feasibility study on the project is under way.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
OreCorp, CEO and MD Matthew Yates, tel +61 0 417 953 315.
Acacia Mining, tel +44 207 129 7150 or fax +44 207 129 7180.