Centamin boosts Doropo gold project economics in Côte d’Ivoire

Centamin (TSX:CEE; LSE:CEY) says its definitive feasibility study (DFS) improves the Doropo gold project in Côte d’Ivoire by reducing community impacts while returning capital to investors in about two years.

The project has a post-tax net present value of US$426 million, a 34% internal rate of return and a 2.1-year payback period, according to the study issued on Thursday. The potential return jumps the company’s hurdle rate of 15% at the US$1,450 per oz. gold price used for mineral reserve estimation, Centamin said in a release. 

The mine’s new plan would resettle 500 people instead of 2,000-3,000 as envisioned in last year’s prefeasibility study, lowering execution risk, CEO Martin Horgan said. No relocations are to be required during construction and the mine’s first two operating years, he said. 

“The results of the DFS demonstrate a robust project that meets Centamin’s investment criteria,” Horgan said. “The project shows a strong first five years with production in excess of 200,000 oz. per annum at an all-in sustaining cost below US$1,000 per oz. delivering an accelerated payback on investment.”

US$373M capex

Total construction capital expenditure is estimated at US$373 million, an increase of less than 7% from the prefeasibility study. The new study keeps the former’s mining and processing operations, Centamin said.

Over the 10-year mine life, Doropo’s annual gold production is estimated at 167,000 oz. at an all-in sustaining cost of US$1,047 per oz. The production is supported by 1.88 million oz. of probable mineral reserves at an average grade of 1.53 grams gold per tonne.

The 1,850-sq.-km Doropo project comprises seven exploration permits. Centamin first began work on the project in 2016, and it eventually built a gold resource of 3.1 million oz. grading 1.26 grams.

Environmental permit

The Côte d’Ivoire government granted Centamin its environmental permit for the project last month following submission of an impact assessment. The company plans to apply for a mining licence this quarter, then make a final investment decision if it earns the licence.

Doropo would become the gold miner’s second producing asset after the Sukari mine in Egypt. It produced 456,625 oz. last year, up 4% from 2022.

Sukari is the country’s only modern gold mine, with a projected life to 2035. It holds 194 million proven and probable tonnes grading 1.23 grams per tonne for 7.7 million oz. of contained gold, the company said this year.