Caiman project to move to feasibility study

A preliminary economic assessment of the Camp Caiman gold project in French Guiana indicates that production of just under 100,000 oz. gold annually could be economic.

The study, done for owners Ariane Gold (AGD-T) by consulting firms CSMA Consultants and Bateman Minerals, examined a 4,000-tonne-per-day open pit and mill operation, and points to an undiscounted net present value for the project of US$80.7 million, or an internal rate of return of 24%.

The postulated design for the project was semi-autogenous grinding, followed first by gravity recovery for coarse gold and then by cyanide leaching and carbon-in-pulp recovery. Both oxidized saprolite and fresh rock would be treated in the mill.

The study used the resource figure recently calculated for the Camp Caiman project, an estimate of 7.7 million tonnes of saprolite grading 2.5 grams gold per tonne, plus 2.8 million tonnes of hard-rock material grading 4 grams per tonne. There is an inferred resource of a further 1.8 million tonnes with an average gold grade of 3.2 grams per tonne; about half of that is oxidized and about half fresh rock.

The pit design assumed an ultimate 12.2 million tonnes brought into reserves, with an average grade of 3 grams per tonne. That included 8.5 million tonnes of saprolite and transitional mineralization grading 2.5 grams gold per tonne and 3.7 million tonnes of hard rock at 4 grams per tonne.

The pit would contain 44 million tonnes of waste, for a strip ratio around 3.6. At annual production of 1.4 million tonnes, the pit would have a life of just under nine years. The call factor — the fraction of ore delivered from pit to mill — was assumed to be 95%, and mill recovery was assumed to be 79%.

The study used a gold price of US$340 per oz. and estimates put the cash production cost at US$172 per oz. Annual gold production would average 96,000 oz.

Capital costs for mine and infrastructure were pegged at US$57 million, with a further US$13 million spent on capital during operation. The result was an undiscounted net present value of US$80.7 million, or US$26.5 million when discounted at 10% annually. Payback of capital would come in just over 40 months.

Increased resources would juice the project’s economics further, as resources tend to do. Ariane’s main hopes lie with two near-surface mineralized zones, Scout and C-88, which have not been drilled off along their strike. Other structural targets where resources have not been blocked out yet, and untested areas of the Caiman soil-geochemical anomaly, are also potential areas to provide feed for the mill.

Design savings and the possibility of qualifying for tax breaks on capital expenditures available to companies investing in the French Overseas Territories may also improve the economics of the project. The French tax scheme can return up to 30% of capital costs.

Ariane Gold will be applying for the tax break and has already filed its application for a Mining Licence. Full approval of the project, from the Directorate-General for Energy and Raw Materials, generally takes between a year and 18 months.

The design used in the preliminary economic study included compliance with European Union environmental regulations, which also apply in French Guiana. The economic study included a US$6-million reclamation reserve, and the mill design included a cyanide-destruction plant and a lined tailings dam.

Ariane will shortly invite tenders for a full feasibility study, and further exploration will get under way during the period of the feasibility study, to bring further mineralization into the resource.