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Scoping Study Demonstrates Robust Economics for a Joint Venture Heap Leach Project with Desert Gold
Alecto Minerals (LSE:ALO), the AIM quoted mineral exploration company, has announced that further to the co-operation agreement entered into with Desert Gold Ventures Inc. (TSX.V:DAU), as announced on 9 March 2015, to assess the potential for jointly developing their respective neighbouring gold deposits in Mali, the Company and Desert Gold have completed a joint internal scoping study which highlights the robust economics associated with developing a potential 400,000 tonnes per annum low-cost gold heap leach operation combining Alecto’s Kossanto East Gold Project and Desert Gold’s Farabantourou Gold Project.
The Scoping Study is based on the known gold deposits on the respective permits, namely Gourbassi East (JORC) and Gourbassi West (JORC) within Alecto’s Farikounda Gold Permit which contains the Kossanto East Gold Project and Barani East (NI 43-101) within Desert Gold’s Farabantourou Gold Permit, and demonstrates that significant cost savings can be generated by jointly developing these deposits through heap leaching with a shared mining fleet and mobile crusher with a central gold recovery plant.
Highlights: Low capital and operating costs for scalable near term gold production
· Scoping Study suggests that an annual production rate of approximately 27,000 oz Au would generate approximately US$97.5 million in gross revenue over an estimated life of mine of just over three years
· Estimated low cash costs of approximately US$582 per oz Au over the initial life of mine
· Low total capital expenditure of approximately US$14.3 million with payback anticipated within 12 months of initial production
· Project NPV (10% discount rate) of US$27.4 million with an IRR of 107% at a gold price of US$1,200 per troy ounce
· Potential to extend the life of mine through further exploration of the permits to be funded from project cash flows
· Combined, Farabantourou and Kossanto East have a total estimated resource of over 365,000 oz Au (at a 0.5g/t Au cut-off) – both projects fall within a potential 10km trucking radius from a central location
· This project is subject to the completion of a mining joint venture agreement between the two parties
Alecto’s CEO, Mark Jones, commented:
“Through our collaboration with Desert Gold since March, we have been able to demonstrate the potential for the joint development of Farabantourou and Kossanto East in line with our stated strategy of becoming a gold producer in the near to mid-term. We look forward to progressing this exciting opportunity through the creation of a joint venture company that will see the Farikounda and Farabantourou permits combined prior to making a single application for a mining licence across the two permits to the Ministry of Mines in Mali. It is our belief that the combined venture, with its positive economics and clear path to gold production, will not only benefit our own shareholders but will also provide much needed economic growth in Mali where we maintain an excellent relationship with the Ministry of Mines. We look forward to providing further updates regarding our progress in due course.”
