Aim-listed Shanta Gold has unveiled the results of its scoping study for the West Kenya project, which it recently bought from gold major Barrick Gold, setting out plans to produce an average of 105 000 oz/y of gold for nine years.
The project will require a capital investment of about $161-million. The study yielded an aftertax net present value of $340-million and an unlevered internal rate of return of 110%.
The scoping study resulted in attractive project economics, CEO Eric Zurrin said in a statement on Tuesday.
"As with all scoping studies there is a significant amount of work to be completed before the assumptions can be confirmed," he said, stating that the board was committed to making the investment to confirm the viability of a mine with a construction decision expected within three years.
Shanta Gold envisions using an openpit mining method for the first two years, followed by underground mining. It will build a carbon-in-leach processing plant, with processing capacity of 480 000 t/y.
The study confirmed the possibility of achieving an average head grade of 9.3 g/t gold.
The life-of-mine all-in costs have been estimated at $850/oz, inclusive of pre-production costs, and all-in sustaining costs at $681/oz.
West Kenya can generate about $118-million a year in earnings before interest, taxes, depreciation and amortisation.
The scoping study provides a basis on which Shanta will do infill drilling and technical studies over the next two to three years to determine the economic viability of a potential mining operation.