Axmin Sees Potential Gold Mine In Sierra Leone

VANCOUVER — A scoping study on Axmin’s (AXM-V, AXMIF-O) Komahun joint-venture gold project in Sierra Leone, about 250 km east of Freetown, has indicated it would be economic to develop.

The scoping study outlines a 350,000-tonne-per-year underground operation with a six-year mine life.

The proposed mine would exploit 1.77 million tonnes ore grading 5.2 grams gold per tonne over its life and produce about 50,000 oz. gold per year.

Axmin has pegged Komahun’s resource at 370,000 indicated tonnes grading 9.1 grams gold and 3.1 million inferred tonnes at 4.7 grams gold.

Using standard gravity and carbon- in-pulp leach facilities, shrinkage- stoping and onsite power generation (based on US$80-per-barrel oil) the scoping study estimates cash costs at US$459 per oz. gold and capital costs of US$69 million.

The base-case scenario in the scoping study gave the project a net present value (NPV) of US$11 million and an internal rate of return (IRR) of 10% using a gold price of US$750 per oz. and a 5% discount rate.

A rosier case, with a gold price of US$900 per oz. and an additional yet-to-be-found 200,000 oz. gold, returned an NPV of US$120 million and an IRR of 32% discounted at 5%.

Axmin says it anticipates finding additional mineralized areas as the known mineralization is open at depth. The company has also tested a nearby gold anomaly that it intends to further explore.

So far, Axmin has extended mineralization to 350 metres below surface in three subvertical structures between about 1 and 12 metres wide along a strike length of 300 metres.

In support of the potential to find deeper gold mineralization, Axmin notes that in August it drilled as much as 24 metres grading 5.6 grams gold in hole 161 starting at a depth below 250 metres.

In a statement, Axmin president and CEO Mario Caron said the scoping study justifies drilling to a depth of around 500 metres with the objective of increasing reserves by 100,000-200,000 oz.

The project is currently a 60-40 joint venture between Axmin and Eldorado Gold (ELD-T, EGO-X). Axmin can increase its stake to 80% upon completion of a feasibility study.

To fund its exploration projects, in November Axmin closed a $4- million private placement. Prior to closing the financing, and as of Sept. 30, it reported US$2.4 million in cash on hand.

The Komahun project is one of three gold projects in its portfolio for which Axmin has calculated a resource estimate. It owns the feasibility level Passendro project in the Central African Republic and the Kofigold project in Mali.

In terms of resource size, Passendro is its largest project with a measured and indicated resource of 23.2 million tonnes grading 2.4 grams gold.

Including the November private placement, Axmin has about 272 million shares outstanding. News of the scoping study boosting the junior’s share price by 2.5¢ to 12.5¢. The stock has traded in a 52-week range of 3-67¢.