Papillon shares climb as Fekola proves its worth
PERTH (miningweekly.com) – The share price of junior Papillon Resources surged on Wednesday, on news that a prefeasibility study (PFS) on the Fekola project had confirmed the project’s viability.
Over an initial nine-year life-of-mine, the project would produce some 306 000 oz/y of gold, at an average operating cost of $580/oz. The capital cost at the project has been estimated at $292-million.
“The completion of the PFS for the Fekola project confirms that the project is large-scale, low-cost and extremely robust. In fact, our sensitivities show that, using our current mining schedule, Fekola will still produce average pre-tax operating cash flows in excess of $130-million a year, using a flat $1 100/oz gold price,” said Papillon MD and CEO Mark Connelly.
He noted that the scale of the planned production would also elevate Papillon into the mid-tier gold producers, while operating with low all-in sustaining cash costs of production.
The Fekola project currently hosts an estimated mineral resource of 54.97-million tonnes, averaging 2.38 g/t gold for some 4.21-million ounces.
The PFS was based on an openpit mining operation and a conventional carbon-in-leach processing circuit. Connelly noted that Papillon would use contract miners, which removed the requirement for further capital expenditure.
Papillon would now move to undertake a review process prior to the award of the definitive feasibility study (DFS), to investigate opportunities to further enhance the project economics through capital and operating cost reductions. These would be incorporated during the final scope of the DFS.
Papillon shares were trading at a high of 71c on Wednesday, up 14.53% from the opening price.
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