Gold exploration company Akobo Minerals has completed a scoping study for the Segele deposit in Ethiopia and the company highlights encouraging results that exceed previous expectations.
The study follows ten years of exploration work, which culminated in a Joint Ore Reserves Committee-compliant maiden resource estimate earlier this year.
This was followed more recently by the granting of a large-scale gold mining licence at Segele.
The scoping study includes key contributions from third parties and was peer reviewed by mining consultants SRK Consulting.
The estimated limited capital expenditure and very low production cost is expected to lead to Segele becoming an “exceptionally high-margin operation”, the company posits.
The study indicates that the current mine plant can double capacity or extend the life-of-mine (LoM) over time as more resources are discovered.
Mining operations are expected to start at the end of 2022.
The study confirms that the mineralisation at Segele can be mined and processed at an estimated all-in sustaining cost (AISC) of $243/oz, while the total LoM operational expenditure, excluding royalties, is estimated at $137/oz.
Total capital expenditure for setting up the mine plant to start production is estimated at $8-million, equalling an average of $153/oz for the current resource estimate of 52 410 oz.
This average will go down as more resources are added over time.
Akobo is planning to mine the gold mineralisation using methods such as shrinkage stoping or similar.
These rocks will be brought to surface using an incline shaft that will take 11 months to build. At peak production, just under 6 000 t of rock monthly will be mined and this material will be passed into an industry standard crushing and gravity circuit, with cyanidation where necessary.
The company plans to buy a plant capable of processing 20 t/h, but operated at 10 t/h initially – allowing for expansion.
The plant is expected to extract 90% of all gold in the mineralisation. This is expected to be confirmed by the ongoing metallurgical testwork.
The scoping study has focused only on the mineralisation covered in the SRK mineral resource estimate, allowing for an anticipated mine life of 27 months.
Ongoing exploration has identified additional mineralisation at depth which leaves open the opportunity to extend mine life.
As with all anticipated underground mining operations, not all ore can be mined or exploited and, as such, the scoping study estimates an extraction percentage of 81%, the grade will be diluted by 5% and ore loss is expected to be 8%.
These figures are in line with or better than industry standards, Akobo points out.
A sustainable natural resources management plan is planned alongside mining. Such a plan may allow Akobo to contribute to meeting the United Nations Sustainable Development Goals, the company notes.
The scoping study is the first phase in the process of developing a business plan for mining at Segele and has an accuracy of between 30% and 50%.
Akobo has already begun a prefeasibility study (PFS), which typically has an accuracy of about 25%. The PFS will involve a resource upgrade, the selection of mining method, detailed plant design and it allows for publication of cash flow models and ore reserves.