On 21 January 2014, the Company announced results of the PEA for development of the Karouni project (Project). The PEA considers a combination of two open cut and one underground mine feeding a conventional carbon-in-leach gold plant with a nominal capacity of 750,000tpa. The PEA assumes a total of 5.2 million tonnes of material will be processed with an average grade of 4.13g/t with recovered gold production of 633,000 ounces over a 7 year mine life.
Highlights from the PEA*, assuming a gold price for the base case of US$1250/oz, are as follows (all figures in US$ unless otherwise stated):
Seven year mine life with annual average gold production of 90,000 ounces, with production in the first 12 months of 102,000 ounces gold.
Conventional CIL plant augmented with gravity gold recovery treating a nominal 750,000tpa configured to allow easy low cost expansion at a later date.
A Production Target of approximately 5.2 million tonnes of material to be processed with an average grade of 4.13g/t. The sources in terms of tonnes are: Smarts Open Cut (42%), Hicks Open Cut (25%) and Smarts Underground (33%).
In terms of contained gold, the sources are: Smarts Open Cut (45%), Hicks Open Cut (15%) and Smarts Underground (40%).
The Smarts pit would produce 2,175,000 tonnes of plant feed at 4.5g/t, have a mining strip ratio of 9.9:1 and be mined to a depth of 140m.
The Hicks pit would produce 1,300,000 tonnes of plant feed at 2.4g/t, have a mining strip ratio of 5.5:1 and be mined to a maximum depth of 90m.
The Smarts underground would produce 1,713,000 tonnes of plant feed at a grade of 5.0g/t and extend for a vertical depth of 400m below natural surface.
Initial capital of $86.8 million (including pre-production mining costs of $9.3 million and contingency of $7.0 million) and sustaining capital over the life of mine of $8.6 million.
Underground development costs of $21.6 million and underground mining fleet $10.3 million (including contingency).
Assumed metallurgical recovery of 92%.
LOM average C1 Cash Costs (excluding royalties) of $653/oz.
LOM All in Cash Costs of $805/oz.
After tax payback of 1.8 years.
After tax NPV at 6% of $101.5 million.
After tax IRR of 44.2%.
TRY Price at posting:
72.5¢ Sentiment: Buy Disclosure: Held