Following encouraging results from an exploration drilling campaign and sulphide metallurgical test work, TSX-V-listed gold explorer and developer African Gold Group (AGG) has received board approval to initiate an update to the July 2020 definitive feasibility study (DFS) to advance its flagship Kobada project, in Mali.
Recent commitments by the miner have focussed mainly on increasing the reserve base and enhancing the free-milling sulphide metallurgical testing of the project, with the updated DFS serving to increase the production profile and overall project economics beyond the robust results of the previous DFS.
The July 2020 DFS points to production of 100 000 oz/y of gold for the first five years of operation, with total gold production of 728 654 oz over a 9.4-year life-of-mine (LoM), based on current reserves.
That DFS also determined an average total operating cash cost of $704/oz for the LoM, and all-inclusive sustaining costs of $782/oz.
The previous DFS also held a pre-tax net present value of 5% of $283.9-million with an internal rate of return of 45.5% and a post-tax net present value of 5% of $226-million with an internal rate of return of 41.1%, at a gold price of $1 530/oz.
AGG CEO Danny Callow says the company’s target is to deliver more reserve ounces, which should show improved LoM and economics.
“The updated study requires significant work as we will need to review resources and reserves, an updated mine optimisation and schedule, additional refinements to the processing plant and a larger tailings dam. In addition, we will work through the updates to the environmental and social impact assessment.”
He adds that AGG has, during the past 19 months, undertaken a systematic process to review and clean up historical data, drill about 20 000 m, enhance oxide and sulphide test work and deliver a DFS that produces a “world-class project, with substantial economic returns to shareholders”.