African mining royalty generator Altus Strategies reports positive results from a preliminary economic assessment (PEA) for its 100%-owned Diba gold project, in western Mali.
The PEA is based on an openpit oxide gold mine with a life of 3.25 years, an average production of 52 000 oz/y and a low strip ratio.
The 81 km2 Diba project is located in the Kayes region of western Mali, about 450 km northwest of the capital city of Bamako.
The project sits 5 km west of the company’s Lakanfla gold project, which is under a joint venture with ASX-listed Graphex Mining. It is also located about 13 km south of the multimillion-ounce Sadiola gold mine and 35 km south of the multimillion-ounce Yatela former gold mine.
Based on the assumption that the leach pad will be located to the south of the pit, the Diba project life-of-mine plan will comprise the simultaneous exploitation of three openpit deposits. Pit phasing and exits will be independent of each other.
The overall strategy is to achieve an average life-of-mine production rate of 4 000 t/d, with a strip ratio expected to average 1.37:1.
The PEA sets out two financial scenarios, the first accounting for a 10% discount rate and a gold price of $1 500/oz, showing that the Diba project will have a pre-tax net present value (NPV) of $115-million and an internal rate of return (IRR) of 728%, with payback in 6.2 months.
The after-tax NPV is estimated to be $81-million, with an IRR of 469% and payback within 6.9 months.
Alternatively, the second scenario applies a 5% discount rate and is based on a gold price of $1 800/oz, which results in the PEA pointing to the project having a pre-tax NPV of $167-million and an after-tax NPV of $118-million.
In addition, the PEA also suggests further growth potential for the Diba project, as seven more oxide gold targets are due for systematic drill testing and a metallurgical study is to be conducted to test potential sulphide ores to be processed through carbon in leach.
Mineralisation at the Diba project is sediment-hosted within a series of eight stacked lenses, typically between 20 m and 40 m thick. The lenses are shallow-dipping at about 30° angled to the east/east-southeast.
The weathering profile at the property is estimated to be up to 70 m vertical depth, resulting in extensive oxidation from surface.
The sulphide content of the mineralised lenses is typically less than 10% by volume and commonly as little as 1%. Disseminated sulphides are fine to very-fine grained and consist of pyrite, with a minor amount of arsenopyrite, chalcopyrite, tellurides and native gold.
Altus CE Steven Poulton says that while the preliminary economics are compelling, the company believes Diba has considerable growth potential.
He adds that Altus will also undertake metallurgical test work to determine if the sulphide material, which is not modelled in the current PEA and which represents about 50% of the current mineral resource, is amenable to conventional carbon-in-leach processing.
The next phase of drilling on the project will focus on the potential to convert inferred resources into indicated resources, as well as the down-dip potential of the deposit.
In parallel, systematic drilling will be undertaken over seven priority prospects that have been discovered within 7 km of the current mineral resource. These targets include the Diba Southwest, Diba Northwest, Diba East, Diba West-Northwest and Plateau targets.