Overview
The Kobada Gold Project (“Kobada”) is an advanced stage gold development project located in Mali, Africa`s 3rd largest gold producing nation. The Company owns a 90% interest in the Kobada gold project with the Government of Mali retaining a 10% carried interest.
The Project is located approximately 126 km south-west of Bamako, the capital city of Mali, in the Birimian Greenstone belt, with excellent transportation links to the capital and excellent logistics routes via other West African ports.
Southern Mali is considered a politically stable jurisdiction and a home to a number of gold producers. These include Endeavour Mining, Barrick, AngloGold Ashanti and Resolute Mining.
Economically Attractive Project
- Pre-tax IRR of 45% and NPV5% of US$506 mln
- Post-tax IRR of 38% and NPV5% of US$355 mln
Near Term Gold Producer
- DFS completed to high engineering standard with firm quotes from equipment providers
- 3 Mtpa plant with an average annual gold production of 100,000 ounces for first 10 years and a total mine life of 16 years
Low construction cost and cost profile
- Simple contractor driven mine plan and Gravity + Carbon-in-Leaching (“CIL”) processing plant with a total capital cost of US$152mln (excluding contingency)
- Predominantly a “free-dig” mining operation
- Once in production, AGG will be one of the lowest-cost producers in West Africa
Large and Growing Mineral Resource
- Measured & Indicated: 1.7 Moz Au @ 0.86 g/t
- Inferred: 1.4 Moz Au @ 1.06 g/t
- Proven & Probable: 1.3 oz Au @ 0.87 g/t
Fully Licensed and Permitted
- Mining license is valid until July 31, 2045
Significant Upside Potential
- Only 5 km within a larger 55 km shear zone has been drilled to date
Definitive Feasibility Study
| Mine Model Summary (After-tax) | ||
|---|---|---|
| LOM Tonnage Ore Processed | t(000) | 45,028 |
| LOM Feed Grade Processed | g/t | 0.868 |
| Production Period | Years | 16 |
| LOM Gold Recovery | % | 95.6% |
| LOM Gold Production | OZ(000) | 1,202 |
| Gold Price | US$/oz | 1,750 |
| Revenue | US$mln | 2,102 |
| Total Initial Capital Cost (Including Contingency) | US$mln | 166.7 |
| LOM Operating Costs | US$/oz | 881 |
| Discount Rate | % | 5% |
| Discounted Payback Period | Years | 3.82 |
| Project Net Cash | US$mln | 325.7 |
| AISC | US$/oz | 972 |
| NPV | US$mln | 355 |
| IRR | % | 37.6% |
The mine plan targets higher grade ore zone at the early phase of the project to feed into the process plant in order to produce 100,000 oz per annum for the first 10 years, and thereafter lower production output as the grade drops and stockpiles are treated. Over the life of the project, 45 Mt of ore will be mined and delivered to the processing facility. Stripping ratio of 3.5:1 over LOM
| Key Project Metrics Sensitivities to Gold Price | ||||||
|---|---|---|---|---|---|---|
| Average Gold Price (US$/oz) | ||||||
| 1,488 | 1,575 | 1,750 | 1,925 | 2,013 | ||
| NPV @ 5% (After Tax) | US$mln | 191 | 246 | 355 | 465 | 520 |
| IRR | % | 23% | 28% | 38% | 47% | 52% |
| Cash Flow Payback | Years | 3.87 | 3.22 | 2.33 | 1.76 | 1.55 |
Mineral Resource & Reserve Estimates
| Resource Classification | Tonnage (Mt) |
Grade (g/t) |
Contained Gold (kg) |
Contained Gold (koz) |
|---|---|---|---|---|
| Measured | 21.40 | 0.83 | 17,784 | 572 |
| Indicated | 40.15 | 0.88 | 35,425 | 1,139 |
| Measured & Indicated | 61.54 | 0.86 | 53,209 | 1,711 |
| Inferred | 42.03 | 1.06 | 44,564 | 1,433 |
Notes:
- Pit constrained mineral resources were estimated at a cut-off grade of 0.35 g/t Au
- Mineral resources were estimated using long-term gold price of US$1,800 per ounce of gold
- Geological losses have been applied
- MIneral Resources are stated as inclusive of Mineral Reserves
- Mineral Resources are reported as total Mineral Resources and are not attributed
- Numbers may not add due to rounding
| Reserve Classification | Tonnage 1 (Mt) |
Grade (g/t) |
Contained Gold (kg) |
Contained Gold (oz) |
|---|---|---|---|---|
| Proven2 | 20.26 | 0.91 | 14,963 | 527,800 |
| Probable2 | 24.77 | 0.87 | 20,545 | 724,700 |
| Proven & Probable2,3,4 | 45.03 | 0.87 | 35,508 | 1,252,522 |
Notes:
- Numbers may not add due to rounding
- Mineral reserves were estimated using a gold price of US$1,610 per ounce of gold
- The cut-off grade used to estimate the Mineral Reserves was 0.35 g/t, with a dilution of 5% and mining recovery of 95%
- Only laterite, saprolite, transition and sulphide material from the Measured and Indicated Resource categories were considered for the Reserve Estimate
Exploration Potential
With only a limited amount of additional drilling, the Company expects to convert further ounces from the inferred oxide resource category to the indicated category. With a resource to reserve conversion of 84%, and a total of 574,850 oz of oxide resource in the inferred category, it is expected that the overall reserve could increase significantly.
The drill results of Phase 1 and 2 (2019 – 2020) indicate that the deposit remains open at depth and along strike, with a significant extension being delineated to the north of the main mineralized shear zone.
While only 4 km of the main shear zone at the Kobada project were considered for the DFS, a further 26 km of shear zones have been identified on the concessions with high-grade satellite deposits at the Gosso target and Faraba. These targets represent an attractive potential for the future sources of production.
The Company is confident that with limited drilling and a high resource to reserve conversion rate, the inferred oxide resources can be converted into additional reserves. This will be a priority during 2020 and will result in mine life being extended. Additional exploration on the highly prospective northern main shear zone and the Gosso target is expected to further increase the probability of additional resources, and this will be a target during 2020-2021.
