Int’l Gold banks on Bibiani deposit

A feasibility study on the Bibiani gold deposit in Ghana has concluded that the project is “robust and economically viable.”

The deposit, owned 45% by International Gold Resources (TSE) and 55% by the government of Ghana, is a former producer with 2.5 million oz. to its credit. Production in colonial times was from quartz veins and shear zones. International Gold, which has been operating the project since early 1994, is looking at a larger, open-pit operation that would exploit low-grade mineralization in the wall rocks.

Australian consulting firm Minproc Engineers, which performed the feasibility study, used a reserve figure of 19.7 million tonnes grading 2.76 grams gold per tonne. An inferred reserve of 4.9 million tonnes of 2.71 grams, and indicated tailings resources of 4.3 million tonnes of 1.16 grams, were also included in the feasibility calculation. The study assumes 18.4 million tonnes will be mined, and that recovery will be 85%.

The deposit can be mined by open-pit methods, with a stripping ratio of 5-to-1. The tailings will be reclaimed using hydraulic monitors, with a tailings slurry delivered to the plant by pipeline.

Current resources will support six and a half years of production, with 300,000 oz. produced in the first full year and lower production rates thereafter. Total capital costs are estimated at US$94 million and production costs at US$10.50 per tonne (US$151 per oz.). Minproc expects production to cover capital costs in the second year of operation, provided gold remains above US$375 per oz.

International Gold expects to acquire an additional 18% interest in the project from the government, which would bring its total stake to 63%. It is looking for ways to increase its capital base, perhaps by equity financing or by combining with a larger gold mining company that can supply capital and production expertise.

Other prospects exist on the Bibiani ground, and International Gold plans to drill reverse-circulation holes on some of these targets. It also manages an exploration program on its other land packages in Ghana. Echo Bay Mines (TSE) is financing the program to earn a 50% interest in International Gold’s holdings, excluding the Bibiani.