A prefeasibility study of the Tabakoto gold deposit near Kenieba in western Mali concludes that the deposit can be mined profitably as a combined open-pit and underground operation.
The study, commissioned by owner
In the base case, capital costs are estimated at US$74 million and cash costs at US$183 per oz. A gold price of US$300 indicates the internal rate of return would be 6.7%. If the average gold price over the life of the mine increased to US$325, the operation would have an IRR of 12.3%.
The study on the target case assumes that a minimum of 7.5 million tonnes will ultimately be defined as a reserve. It estimates the same preproduction capital cost as the base case, adding a life-of-mine capital cost of US$7.6 million. Cash costs fall to US$175 per oz.
At US$300-per-oz. gold, using the target case, the project’s IRR is 15.4%, increasing to 20.2% at a price of US$325.
The minable reserve of 4.4 million tonnes comes from two measured and indicated resources: a sulphide resource of 5.6 million tonnes grading an average 7.5 grams per tonne, and an oxide resource of 500,000 tonnes grading 1.8 grams per tonne. The resources, calculated by Pearson, Hofman & Associates, are based on cutoff grades of 3 grams per tonne in sulphide material and 0.5 gram in oxide.
The consultants estimate an additional inferred resource of 2.1 million tonnes at 7.6 grams per tonne, for an overall resource, in all categories, of 8.2 million tonnes grading 7.2 grams gold per tonne.
The resource estimate consists entirely of mineralized material above a 380-metre depth, but gold mineralization has been encountered in exploration drilling down to a depth of 700 metres.
The mine design, by BLM Bharti Engineering, includes a pit and underground workings accessible by a decline collared outside the pit area. The plan envisions main 50-metre levels with 25-metre sublevels, and the decline will reach a depth of 350 metres by the end of the mine’s life.
Underground, the ore zones are to be mined by longhole stoping and Alimak vein stoping, with some shrinkage stopes. The study plans paste backfill for the open stopes and recommends that a paste backfill plant be built early in the mine’s life.
Tests of direct cyanidation recovered around 92% of the gold in sulphide mineralization and about 90% of the gold in the oxide material. Slightly more than half the gold is extractable by simple gravity concentration, making it possible to get similar recoveries in a combined gravity/cyanidation process.
Nevsun has also settled a lawsuit brought in Guernsey, U.K., by its former project manager, CME Consulting, which had sued for payment of outstanding invoices amounting to US$705,000 and claimed damages of US$5 million for breach of the project management agreement covering Nevsun’s West African properties.
Nevsun counter-sued in British Columbia, claiming breach of contract and negligence. CME’s statement of defence in that suit alleged that Nevsun had released an inflated resource estimate for its Kubi property in southwestern Ghana, and that CME’s refusal to support the estimate led to Nevsun’s termination of CME’s management contract.
The two parties called off the lawyers in early November following an agreement that will see Nevsun pay the outstanding invoices plus US$750,000, and issue 1 million shares to CME. Nevsun’s management retains voting rights over those shares for three years.
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