Axmin proposes US$69M gold mine in Sierra Leone

Vancouver – Axmin (AXM-V, AXMIF-O) received positive economics in a scoping study of its joint-venture Komahun gold project in Sierra Leone about 250 km east of Freetown.

The news gave Axmin’s share-price a 2.5¢ boost to 12.5¢.

The scoping study outlines an 350,000-tonne-per-year underground operation with a 6-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 estimate at 370,000 indicated tonnes grading 9.1 grams gold and 3.1 million inferred tonnes grading 4.7 grams gold.

Using standard gravity and carbon-in-pulp leach facilities, shrinkage-stoping and on-site 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 a NPV of US$120 million and an IRR of 32% discounted at 5%.

Axmin says it anticipates finding additional mineralized areas as the mineralization is open at depth and it has tested a nearby gold anomaly which 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 gold mineralization at greater depths 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 says the scoping study justifies drilling down to a depth of around 500 metres with the objective of increasing reserves by 100,000-200,000 ounces.

The project is currently a 60-40 joint venture between Axmin and Eldorado Gold (ELD-T). 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 private placement, 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 of properties where Axmin has calculated a resource estimate. It owns the feasibility level Passendro project in the Central African Republic and the Kofi gold project in Mali.

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

Including the November private placement Axmin has about 272 million shares outstanding.