Engineering work begins at Samira Hill gold project

With a positive feasibility study in hand, Etruscan Resources (EET-T) has initiated site preparation and engineering work at the Samira Hill gold project in Niger, West Africa.

A unit of Rand Merchant Bank of South Africa will arrange project debt financing, with the equity portion to be raised by Canadian and Australian brokerage firms.

Capital costs are estimated at US$23 million, based on the bankable feasibility study prepared by Mineral Resources Development and South Africa’s Metallurgical Design Management. This estimate includes mill and process plant construction, diesel power generation and distribution, tailings dam construction and working capital.

If all goes as planned, the first gold will be poured in July of next year. At full production, the open-pit operation is expected to churn out 67,000 oz. gold annually at a cash operating cost of US$168 per oz. over a mine life of 6.3 years.

The mining rate would be 3,000 tonnes per day, and, over the mine life, Samira Hill would produce a total of 425,000 oz. gold from oxide and transitional ores in two open pits.

Proven and probable reserves are pegged at 6.57 million tonnes grading 2.4 grams gold per tonne, with a waste-to-ore stripping ratio of 3-to-1.

Etruscan notes that project economics could be enhanced by mining additional oxide resources in the nearby region, including those at the contiguous Soura permit. The company expects to close a deal to acquire the Soura concession shortly.

Average gold recoveries are estimated at 83.9% (with 93% recoveries in oxide ores) using carbon-in-leach processing.

Samira Hill has additional sulphide resources, though these were not examined in the feasibility study.

The government of Niger has a 10% interest in Samira Hill. Total cash costs, including royalties to the government, are estimated at US$189 per oz. The new mine is entitled to a tax holiday for the first five years of production.