TSX-V-listed African Gold Group has published a definitive feasibility study (DFS), as well as an updated mineral resource and reserve estimate, for the Kobada gold project, in Mali.
The DFS envisions a production rate of 100 000 oz/y for the first five years of operation.
Based on current reserves, the project can deliver a total gold output of 728 654 oz over a 9.4-year mine life.
The DFS further finds the average total operating cash cost for Kobada to be $704/oz for the life-of-mine, with an all-in-sustaining cost of $782/oz.
The project has an after-tax net present value of $226-million, with an internal rate of return of 41.1% at a $1 530/oz gold price.
The study determines that Kobada requires capital expenditure of $125-million, as well as contingency of $11-million, which has a payback time of 3.82 years from start of production, assuming the sustained gold price of about $1 530/oz.
African Gold intends to purchase power from a standalone 11 MW hybrid solar/thermal power plant, which will be funded by an independent power producer, with power purchased at a competitive kWh rate.
Meanwhile, the company’s mineral reserve estimate has increased to 754 800 oz of proven and probable reserves, which is a 48% increase in ounces compared with the mineral reserve estimate stated in the company’s 2016 feasibility study on the Kobada project.
The company says that further potential remains to significantly increase the resource and reserve along strike and depth at the project.
African Gold will undertake drilling during the second half of the year to further increase the reserve and extend the mine life.
Eventually, construction of the process plant and associated infrastructure is expected to take 19 months.
African Gold has expansive holdings in West Africa’s Birimian Greenstone Belt, including more than 460 km2 across Mali and Burkina Faso, with a focus on the development of the Kobada project.
The company earlier this week promoted COO Danny Callow to president and CEO, appointed Scott Eldridge nonexecutive chairperson, Jan-Erick Back as vice-chairperson and John Begeman as lead independent director.
African Gold has also announced a planned name change to Avion2Gold.