VANCOUVER (miningweekly.com) – A new feasibility study on Roxgold's Bagassi South project, which is located on the TSX-quoted company's Yaramoko concession, in the Houndé greenstone region of Burkina Faso, has outlined the potential to lift the Yaramoko project's expected gold output by 150 000 oz/y.
The 40% increase in output is attributed to a satellite underground operation at Bagassi South and an expanded processing facility at Yaramoko.
Based on a price assumption of $1 300/oz of gold, the Bagassi South project has an after-tax net present value, applying a 5% discount rate, of $50-million, with the after-tax internal rate of return (IRR) coming in at a whopping 53.2%. An IRR of 35% is usually considered extremely attractive to investors.
Preproduction capital is calculated at $29.6-million to build the operation, which will produce 40 000 oz/y over a 4.2-year mine life.
The Bagassi South project has compliant proven and probable mineral reserves of 170 000 oz of gold grading 11.54 g/t gold, representing an increase of reserves of 26% for the Yaramoko gold project (55 Zone plus Bagassi South), Roxgold advised.
Like the neighbouring 55 Zone, the economics of this additional high-grade feed source are highly accretive and generate increased cash flow from a modest capital outlay.
Ongoing infill drilling at Bagassi South has the potential to increase mine life which could further improve future economics, the company advised.