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Sierra Rutile completes PFS for Sembehun dry mine

22nd March 2016

By: Anine Kilian

Contributing Editor Online

  

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JOHANNESBURG (miningweekly.com) – AIM-listed Sierra Rutile has concluded a prefeasibility study (PFS) for its Sembehun dry mine project, in Sierra Leone, intended to extend the life and scope of operations at its fully permitted Sembehun group of deposits.

The PFS found that the dry mine was value enhancing and capital efficient.The operation would have the flexibility to operate at either a 500 t/h or 1 000 t/h throughput rate.

Compared with the scoping study released last year, the current PFS supported reduced levels of capital expenditure, a shortened lead time and improved economic returns.

Further, the PFS was in line with the continued transition of Sierra Rutile to a market-led business model with the flexibility to align production with long-term demand.

“The PFS for the Sembehun dry mine reaffirms the robust pipeline of value-enhancing organic growth options within Sierra Rutile's existing project portfolio. If commissioned, the Sembehun dry mine would be the third dry mining operation constructed at Sierra Rutile,” said CEO John Sisay.

He added that the experience gained from the Lanti and Gangama dry mines would be leveraged in the construction of the Sembehun dry mine, which would help ensure even greater confidence that the project would be constructed on time and within budget.

“As we continue to execute our strategic plan, we will continue to prioritise sensible growth without compromising our balance sheet and sustainable shareholder returns."

The fully permitted Sembehun group of deposits, located 45 km north-west of Sierra Rutile's existing operations, represent the largest resource within Sierra Rutile's existing endowment, containing 3.6-million tons of rutile at an average in-situ rutile grade of 0.98%.

The PFS was based on a throughput of 1 000 t/h sourced from an openpit dry mining operation comprising two 500 t/h concentrator plants, an owner-operated mining fleet, product haulage vehicles and infrastructure.

The projected life-of-mine was expected to be 21 years, dependent on the size and number of units in the final configuration of the operation. Sembehun dry mine was expected to contribute an average of 71 000 t of rutile a year as a 1 000 t/h operation.

During the first five years of operation the project would mine ore at an average rutile grade of 1.43%, improving the large resource base of the Sembehun group of deposits. It would see an average mining cash cost of $285/t, comparable with Sierra Rutile's existing dry mining units.

The PFS provided a lower upfront capital cost estimate for a 1 000 t/h operation of $99-million compared with the scoping study estimate of $126-million, as a result of value engineering, outsourcing of noncore activities, a reduction in the size of the proposed earthmoving fleet, lower costs envisaged for the process plant, and lower infrastructure costs.

These cost savings had been validated not only through the PFS, but also through the construction of Gangama dry mine in 2016, which was currently on-time and within budget.

The PFS expected that Sembehun dry mine could be developed in 15 months, with production starting after 12 months. Alternatively, the PFS also demonstrated that upfront capital costs could be further staged through a two-phased approach to the construction of the two 500 t/h concentrator plants over 15 months.

At this time, additional engineering work was being done to assess the option of phasing the 1 000 t/j capacity in increments of 250 t/h to increase production flexibility.
 

Edited by Samantha Herbst
Creamer Media Deputy Editor

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