The four scenarios reviewed were, a conventional gold operation producing a flotation concentrate with the concentrate further processed off-site, a similar option with the concentrate processed on site, a heap leach operation using ammonium thiosulphate and a halogen leach. The key aspect that came out of this review is that this region does not have a simple metallurgy and did not give particularly good results. Flotation was needed to get total recoveries above 90%. Unfortunately, the concentrate recovered most of the arsenic, with the float concentrate running 11% arsenic. This problem was overcome by using an ultra-fine grind of 10 microns which yielded overall gold recoveries of between 75.5% and 87.1%. Tests using nitric acid as the lixiviant gave recoveries of over 98% but it is our view that the higher capital and operating costs for a nitric acid extraction plant would rule it out. Further, we know of no company using nitric acid leaching.
However, the initial work has shown that the existing ore resources could support a mining operation over seven years and producing around 340koz of gold with cash costs between US$666 and US$683/oz. Given that not all the strike length has been explored and very little drilling has gone beyond a depth of 200m, there is ample opportunity to extend the mine life and potentially expand production. The way forward would be to complete a bankable feasibility study as soon as possible and get into production, funding the further exploration needed from cash flow. We also believe that a 5% discount rate is too low, preferring 10%. Whilst this reduces the npv, we believe that the additional exploration will extend the mine life and more than compensate for the higher discount rate.
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