Tanzania’s Ministry of Energy and Mineral Resources has granted partners Barrick Gold (ABX-T) and Northern Mining Explorations (MDN.T) a special mining license for the Tulawaka gold project.
The two already have an approved environmental impact assessment in hand; negotiations for the remaining project permits and agreements are well underway. The special licence allows for commercial development of the Tulawaka East zone gold deposit.
The East zone is home to an indicated resource totalling 1.7 million tonnes grading 14.19 grams gold per tonne. Mineralization is hosted by three gold-bearing quartz veins, which combined have a strike length of about 1.3 km. At last report, the zone extended no deeper than 150 metres below surface.
A recently completed feasibility study of the East zone envisages a single, 50-hectare open-pit mine running at a rate of 21,000 tonnes per day, with the waste-ore ratio pegged at 18.3 to 1. The operation would run 24 hours a day, seven days a week.
At a gold price of US$325 per oz., the contractor-operated open-pit operation is expected to produce 500,000 oz. of gold by targeting 1.4 million tonnes of ore grading 11.54 grams gold over four years. The final pit depth rests at 135 metes below surface.
Under a pit design completed by Montreal-based Met-Chem Canada, mining cost are pegged at US$1.50 per tonne, milling costs ring in at US$12 per tonne, and administration cost at US30 per tonne. The estimates are based on a gold price of US$ 300 per oz., and recovery rate of 90%.
The partners have retained Met-Chem to prepare a preliminary study considering the underground mining of the non open-pittable resources. At an economic cut-off grade of 1.6 grams gold, Met-Chem put diluted resources in the East Zone at 2.64 million tonnes averaging 9.27 grams gold.
Tailings at Tulawaka will be contained in a free-standing storage facility north of the open pit, and will not obstruct local watercourses. An estimated 1,200 cubic metres of fresh water will be required for processing, dust control, domestic consumption, and gold room usage each day. Plans call for the water to be supplied form both underground and surface sources.
The proposed processing circuit includes run-of-mine stockpiling, primary crushing, single stage semi-autogenous-grinding, gravity recovery followed by intensive leaching and carbon-in-leach (CIL) gold extraction. A cyanide detoxification process will reduce cyanide concentrations in the tailings slurry.
Barrick, the operator, holds a 70% interest in the property. Northern Mining holds the remainder.
News of the license sent shares in MDN 11, or 14%, higher to 90 in Toronto on Nov. 13. For their part, Barrick’s shares slipped 32 to $27.38.
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