Etruscan advances Samira to feasibility

By commissioning an independent feasibility study, Etruscan Resources (EET-T) has paved the way for its Samira gold deposit to become the first significant gold producer in Niger.

The Halifax, N.S.-based company owns a 90% interest in the 1,241-sq.-km Tiawa property, which hosts the deposit. The remaining interest is held on a carried basis by the government.

Mineral Resources Development Inc. (MRDI) will manage the study, while receiving assistance from several firms that will focus on metallurgical, design and environmental aspects. Metallurgical tests and cost analyses are scheduled for completion by mid-December.

“This is a pretty significant step, as it is the first mine Etruscan will put into production,” says the company’s president, Rick Van Nieuwenhuyse.

“It will also be the first gold mine for Niger, outside of artisanal mining.” Etruscan envisages a 3,300-tonne-per-day open-pit, heap-leach operation capable of producing 70,000-80,000 oz. gold per year. Cash costs are expected to average US$150 per oz. over a mine life of eight years, with startup costs pegged at US$12 million.

The project is expected to generate an internal rate of return of 44%, based on a gold price of US$300 per oz. Capital costs are expected to be recovered within 18 months of startup.

Construction is to begin in the second quarter of next year, with production slated for the fourth quarter

Drill-indicated and inferred resources are pegged at 27.8 million tonnes averaging 2.02 grams gold per tonne. The study, however, is focused solely on the Main zone’s weathered portion, which is estimated to contain 6.4 million tonnes averaging 2.49 grams, based on a cutoff grade of 1 gram gold.

At

a 0.5-gram cutoff, that resource jumps to 14.6 million tonnes grading 1.41 grams.

“We think we can realistically process 0.5 gram, or perhaps even a bit lower,” says Nieuwenhuyse. “This depends, of course, on factors such as cyanide consumption, of which we have a pretty good idea.”

Gold mineralization is structurally controlled and occurs as disseminations in a sedimentary horizon, dubbed Samira, that is sandwiched between greenstones. Rocks are oxidized and altered to saprolite to a depth exceeding 100 metres, below which they are fresh. Within the unweathered material, gold is associated with sulphide minerals predominantly in the form of pyrite and arsenopyrite.

Within the Main zone, mineralization is known to be continuous over a strike length of 300 metres and to a depth of 250 metres, where it remains open.

The economics of processing the primary material in a carbon-in-leach plant are being studied, though this remains a longer-term goal.

As part of the feasibility study, the company will sink 6,000 metres in the targeted resource to boost it to the measured category. Holes will be collared on 25-metre centres to tighten previous spacings of 50 metres.

Another 9,000 metres will be drilled in two separate areas that form part of the deposit’s overall resource. Both are situated along strike, and within 2 km, of the Main zone.

The Samira deposit was discovered in the early 1990s during a government-sponsored program of regional mapping and prospecting. Etruscan acquired the property in 1996 and, shortly thereafter, enlisted the help of Placer Dome (PDG-T), which, until its departure earlier this summer, managed and operated exploration.

Since then, Etruscan has been discussing a possible joint venture with South African mining house Anglo American, which is carrying out a due diligence review. Such an agreement could include all of the company’s West African properties.