TIDMALS
RNS Number : 5334U
Altus Strategies PLC
02 August 2022
Altus Strategies Plc / Index (EPIC): AIM (ALS) TSX-V (ALTS)
OTCQX (ALTUF) / Sector: Mining
2 August 2022
Altus Strategies Plc
("Altus" or the "Company")
Significant Growth in Gold Resource at Diba & Lakanfla
Project, Western Mali
Updated PEA Delivers US$150 Million (After-Tax) Net Present
Value
Altus Strategies Plc (AIM: ALS, TSX-V: ALTS, OTCQX: ALTUF)
announces the publication of an updated independent Mineral
Resource Estimate ("MRE") and Preliminary Economic Assessment
("PEA") for its 100% owned Diba & Lakanfla gold project ("Diba
& Lakanfla" or "the Project") located in western Mali.
Highlights:
-- Updated MRE and PEA published for Diba & Lakanfla in western Mali
o Open pit heap leach gold mine with low capital expenditure and
strong cashflows
o After-tax Net Present Value ("NPV") of US$150 million with
payback of 5.7 months
o NPV based on 8% discount rate, US$1,700/oz gold (" Au ") price
and 95% recovery
o All-in sustaining costs of US$686/oz and a low strip (waste to
ore) ratio of 1.22:1
o 4.7 year mine life with average annual gold production of
54,380 ounces ("oz")
o Diba small scale mining licence hosts a shallow dipping
near-surface gold deposit
-- Substantial 67% increase in MRE in all categories, comprising:
o 7,800,000 tonnes at 1.24 g/t Au for 312,000 oz in the
Indicated category
o 12,700,000 tonnes at 0.87 g/t Au for 362,000 oz in the
Inferred category
o Project hosts numerous targets for further drill testing and
potential resource growth
-- Project is strategically located in a world-famous gold belt that hosts several mines
-- Altus intends to undertake a process to potentially monetise the Project and create a royalty
Steven Poulton, Chief Executive of Altus, commented:
"We are delighted to announce the significant increase in the
MRE at the Company's 100% owned Diba & Lakanfla gold project in
western Mali. The updated PEA generates an impressive US$150
million after-tax NPV8, for the oxide portion alone of the Project.
The PEA envisages a simple low-cost and low-strip ratio open-pit
gold mine, using standard heap-leach processing for oxide ores. The
MRE also identifies approximately 12 million tonnes of fresh
sulphide material which could add additional ounces to an enlarged
mine.
"With numerous prospects remaining to be adequately drill
tested, the Diba & Lakanfla project is strategically positioned
to become a potentially significant gold deposit in western Mali.
With the publication of the MRE and PEA, Altus now intends to
undertake a process to potentially monetise the Project, including
the creation of a long-term royalty on any future gold production.
We look forward to updating shareholders in due course."
Updated Preliminary Economic Assessment
The updated PEA describes the potential technical and economic
viability of establishing a conventional open-pit gold mine for
Diba & Lakanfla. The updated PEA technical report has been
prepared in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects of the Canadian Securities
Administrators ("NI 43-101") by independent consulting firm Mining
Plus UK Ltd ("Mining Plus") of Bristol, United Kingdom. The PEA
will be filed on SEDAR at www.sedar.com and on the Company's
website at www.altus-strategies.com , shortly after the issuance of
this news release. A summary of the economics is provided in Table
1 below.
Table 1: Summary of Economics
Pre-Tax NPV at 8% discount rate(1) US$213.25M
After-Tax NPV8 US$149.78M
------------
Pre-Tax Internal Rate of Return ("IRR") 1,204%
------------
After-Tax IRR 683%
------------
Life of Mine ("LOM") average gold price US$1,700/oz
------------
Average All In Sustaining Costs ("AISC") / oz US$686/oz
------------
Throughput 2.0Mtpa(2)
------------
Gold recovery (oxide heap leach) 95%
------------
Total capital expenditure US$28M
------------
Strip ratio(3) 1.22:1
------------
Average annual gold production 54,380 oz
------------
Total operating cashflow US$186M
------------
After-Tax payback 5.7 months
------------
Average grade (grams per tonne) of mined resource 0.99 g/t Au
------------
Life of Mine 4.7 years
------------
(1) Includes deduction of 3% Net Smelter Return royalty to Mali Government.
(2) Million tonnes per annum.
(3) Strip ratio is defined as tonnes of waste per tonne of
potential mineralised inventory ("PMI").
Updated Mineral Resource Estimate
The updated MRE (as detailed in Table 2) comprises 7,800,000
tonnes grading 1.24 g/t Au for 312,000 oz of contained gold in the
Indicated category and a further 12,700,000 tonnes grading 0.87 g/t
Au for 362,000 oz of contained gold in the Inferred category,
representing a 67% increase in both categories when compared to the
previous MRE with an effective date of 18 November 2020. This MRE
update follows an 11,832 metre ("m") programme of infill drilling
completed by the Company in Q1 2022 across Diba & Lakanfla,
with results reported on 17 March 2022 (see news release entitled
Further Significant Intercepts from Diba & Lakanfla Gold
Project in Western Mali), 15 February 2022 (see news release
entitled Altus Intersect 1.23 g/t over 127m at Lakanfla Central
Prospect in Western Mali) and 21 January 2022 (see news release
entitled Excellent Gold Grades from Drilling at Diba NW Prospect in
Western Mali).
Table 2: Updated Mineral Resource Estimate
Domain Indicated Inferred
Tonnes Grade Contained gold (koz) Tonnes Grade Contained gold (koz)
(Mt) (g/t) (Mt) (g/t)
------- ------- --------------------- ------- ------- ---------------------
Oxide 4.1 1.52 199 2.7 0.86 75
------- ------- --------------------- ------- ------- ---------------------
Transitional 0.7 1.18 25 1.2 0.83 33
------- ------- --------------------- ------- ------- ---------------------
Fresh 3.1 0.88 88 8.8 0.90 255
------- ------- --------------------- ------- ------- ---------------------
Total 7.8 1.24 312 12.7 0.87 362
------- ------- --------------------- ------- ------- ---------------------
(1) Cut-off grade is 0.5 g/t Au; Mt is million tonnes; and koz is thousand ounces.
(2) Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability. There is no certainty that all or
any part of the Mineral Resources estimated will be converted into
Mineral Reserves. The estimate of Mineral Resources may be
materially affected by environmental, permitting, legal, title,
taxation, socio-political, marketing, or other relevant issues.
(3) The CIM definitions were followed for the classification of
Measured, Indicated, and Inferred Mineral Resources.
(4) The quantity and grade of reported Inferred Resources in
this estimation are uncertain in nature and there has been
insufficient exploration to define these Inferred Resources as an
Indicated or Measured Mineral Resource and it is uncertain if
further exploration will result in upgrading them to an Indicated
or Measured Mineral Resource category.
(5) Altus is the operator of, and has a 100% interest in, Diba & Lakanfla.
Cautionary Statement Regarding Preliminary Nature of the PEA
Readers are cautioned that the PEA summarized in this press
release is preliminary in nature and is intended to provide an
initial, high-level review of the Project's economic potential and
design options. The PEA mine plan and economic model includes
numerous assumptions and the use of Indicated and Inferred
Resources. Indicated and Inferred Resources are too speculative
geologically to have economic considerations applied to them that
would enable them to be categorized as Mineral Reserves and as
such, there is no certainty that the PEA will be realized. Actual
results may vary, perhaps materially. The projections, forecasts
and estimates presented in the PEA constitute forward-looking
statements and readers are urged not to place undue reliance on
such forward-looking statements. Additional cautionary and
forward-looking statement information is detailed at the end of
this news release.
Illustrations
The following figures have been prepared and relate to the
disclosures in this announcement and are visible in the version of
this announcement on the Company's website (
www.altus-strategies.com ) or in PDF format by following this link:
https://altus-strategies.com/site/assets/files/5769/altus_nr_-_diba_pea-_2_august_2022.pdf
-- Location of Diba & Lakanfla in western Mali is shown in Figure 1.
-- Main prospects on Diba & Lakanfla are shown in Figure 2.
-- Location of Diba & Diba NW Mineral Resource is shown in Figure 3.
-- Location of Lakanfla Central Mineral Resource and additional targets is shown in Figure 4.
-- 3D Model of MRE and conceptual open pit is shown in Figure 5.
Diba & Lakanfla: Location
The 81km(2) Diba licence (Korali Sud) and the 24km(2) Lakanfla
licence are located 5km apart in the Kayes region of western Mali,
approximately 450km northwest of the capital city of Bamako. Diba
& Lakanfla is located adjacent to the multi-million ounce
Sadiola gold mine licence and 35km south of the multi-million ounce
Yatela former gold mine, both acquired by Allied Gold Corporation
from the previous operators AngloGold Ashanti (JSE: ANG, NYSE: AU
and ASX: AGG) and IAMGOLD Corporation (TSX: IMG and NYSE: IAG).
Mineralisation hosted at these mines is not necessarily indicative
of mineralisation hosted at Diba & Lakanfla.
Diba & Lakanfla: Geology and Mineralisation
Diba Licence
Mineralisation at the Diba Deposit on the Diba licence is
sediment-hosted within a series of stacked quartz lenses, typically
between 20m and 40m thick. The lenses are shallow-dipping at
approximately 30 degrees angled to the east/east-southeast. The
Diba Deposit is considered to be controlled by a number of
northwest and northeast orientated structures, with gold occurring
as fine-grained disseminations in localised high-grade,
calcite-quartz veinlets. Alteration at the Diba Deposit is
typically albite-hematite+/-pyrite, although pyrite content is
generally very low (<1%). The weathering profile at the Diba
Deposit is estimated to be up to 70m vertical depth, resulting in
extensive oxidation from surface. The oxide gold mineralisation at
the Diba Deposit is predominantly found in saprolite within 50m of
surface and across a compact 700m x 700m area.
Lakanfla Licence
The Lakanfla licence hosts a significant number of active and
historic artisanal gold workings coincident with significant
geochemical and gravity anomalies. The workings surround the
Kantela granodiorite intrusion and cover an area of approximately
900m x 500m. The gold mineralisation at Lakanfla is typically
hosted within breccia zones which cut the granodiorite and
surrounding carbonate metasediments. Drilling by the Company has
intersected 1.23 g/t Au over 127m (not true widths) at the Lakanfla
Central prospect, while historic intersections by previous
operators include 9.78 g/t Au over 12m and 5.20 g/t Au over 16m
(not true widths) as well as having intersected voids and
unconsolidated sand from 165-171m depth. The Company has not
verified the historic drilling data at the Lakanfla licence.
Sensitivities
Diba & Lakanfla is expected to be a robust mining operation
that is profitable at a variety of gold prices. The PEA modelled
sensitivities to the NPV8, with gold prices and metallurgical
recoveries shown to be the two most sensitive inputs. A summary of
the results of this sensitivity analysis is presented in Table 3
and Table 4.
Table 3: Gold Price Sensitivity (pre-tax)
2.0 Mtpa(1) operation
---------------------
Gold Price (US$/oz) NPV8 ( US $000) IRR%
--------------------- ---------------- -------
US$1,600 190,545 962%
---------------- -------
US$1,650 201,895 1,077%
---------------- -------
US$1,700 213,245 1,204%
---------------- -------
US$1,750 224,595 1,343%
---------------- -------
US$1,800 235,945 1,494%
---------------- -------
Table 4: Metallurgical Recovery Sensitivity (pre-tax)
2.0 Mtpa(1) operation
-----------------------
Metallurgical recovery NPV8 ( US $000) IRR%
----------------------- ---------------- -------
80% 162,230 715%
---------------- -------
85% 183,018 891%
---------------- -------
90% 203,807 1,098%
---------------- -------
95% (Base Case) 224,595 1,343%
---------------- -------
100% 245,383 1,631%
---------------- -------
(1) million tonnes per annum
Mine Plan
Oxide and transitional ore from Diba & Lakanfla is proposed
to be mined by a contractor in a phased sequence of open pits which
prioritises extraction of higher grade ore. The mine plan could
deliver an annual production rate of 2.0Mtpa over a mine life of
4.7 years. Approximately 85% of the oxide ore is expected to be
free digging although some localised blasting may be required where
there is harder material (e.g. ferrocrete/duricrust) and has been
included in operating costs. At Diba, a total of four open pits is
proposed while at Lakanfla a total of two open pits is
proposed.
From the open pits, ore would be loaded and hauled to the leach
pad using excavators and dump trucks. Ore is proposed to be mined
at a rate of 167,000 tonnes per month. From the second month of
mining and following advanced clearing and preliminary waste
stripping, sufficient ore is expected to be exposed within the open
pits in order to maintain the required production levels. Waste
would be hauled to a Waste Rock Storage Facility ("WRSF") located
adjacent the open pits. Over the life of mine, the strip ratio is
expected to average 1.22 tonnes of waste per tonne of ore.
Metallurgy and Processing
Heap Leach
In the PEA, the gold extraction method envisaged is heap
leaching with gold recovery via Carbon-in-Column processing. A
recovery rate of 95% is estimated based on two key studies
undertaken by Grinding Solutions Limited of Truro (United
Kingdom).
On 28 October 2020, the Company announced the results of a
comprehensive PEA level metallurgical analysis completed by
Grinding Solutions on 130kg of drill core collected from
representative oxide and fresh zones within the envelope of the
Diba MRE. The results indicate a recovery of 95.8 % of gold from
oxide material at a coarse (6.3 mm) crush size for the heap leach
scenario.
On 29 June 2022, the Company received results of a second
comprehensive PEA level metallurgical analysis completed by
Grinding Solutions on 143kg of drill core collected from
representative oxide and fresh zones within the envelope of the
Lakanfla MRE. The results indicate a recovery of between 92.75 %
and 98.49 % of gold from oxide material at coarse crush sizes (6.7
mm and 12.5 mm) for the heap leach scenario.
The following key factors have been considered in the decision
to assume heap leaching rather than agitated leaching:
-- Lower capital and operating costs
-- Reduced Project complexity and shorter time required for
Project construction and implementation
At this preliminary stage, no detailed design for the heap
leaching has been prepared. The proposed mining system must
therefore be considered as only conceptual at this point. The
proposed heap leaching system is similar to existing and operating
heap leach mines processing similar material under comparable
conditions. The processing facilities proposed for Diba &
Lakanfla would include:
-- Two-stage crushing, screening, and agglomeration
-- Heap stacking and leaching using a lined 3,000,000m(3) heap leach facility with berms
-- Gold recovery by Carbon-in-Column processing.
Waste
Waste rock would be hauled to a designated area to form the WRSF
located west of the open pit. The locations of the WRSF will
require detailed geotechnical investigation during the next phases
of Diba & Lakanfla to determine the suitability of the proposed
area.
Access
Access roads and haul roads will be required around the site.
These are planned to be maintained laterite roads. The locations
and specification of the roads will require further investigation
during the next phases of Diba & Lakanfla.
Tailings
The Project envisions utilising a heap leach processing
operation and as such no tailings would be produced from the
operation. Therefore, a tailings containment and storage facility
would not be required.
Operating Costs
Estimated life of mine operating costs (per tonne processed)
inclusive of ore, overburden and waste rock are summarised in Table
5. The average Total Operating Cost over the life of the mine has
been estimated at US$20.50/tonne per tonne of ore processed. Total
Operating Costs include mine operations, process plant operations,
general and administrative costs ("G&A"), selling costs and
royalties.
Table 5: Operating Cost Assumptions
Cost item for 2.0Mtpa US$ per tonne ore
Mining US$8.55
------------------
Processing US$6.94
------------------
G&A US$3.13
------------------
Selling, Refining and Royalties US$1.88
------------------
Total Operating Cost US$20.50
------------------
Risks
As with all mining ventures, a large number of risks and
opportunities can affect the outcome of the Project. Most of these
risks and opportunities are based on uncertainty, such as lack of
scientific information (test results, drill results, etc.) or the
lack of control over external factors (metal prices, exchange
rates, etc.). Subsequent higher-level engineering studies would be
required to further refine these risks and opportunities, identify
new risks and opportunities, and define strategies for risk
mitigation or opportunity implementation.
Qualified Persons
Matthew Field, Pr.Sci.Nat., Principal Geology Consultant, Mining
Plus UK Ltd is the main author of the PEA and is responsible for
the technical part of this press release and is a Qualified Person
under the terms of NI 43-101.
Adriano Carmensi Carneiro, FAusIMM, Principal Mining Consultant,
Mining Plus UK Ltd is a contributing author of the PEA, and is a
Qualified Person under the terms of NI 43-101.
Nick Wilshaw, FIMMM, Principal Consultant, Grinding Solutions
Ltd is a contributing author of the PEA, and is a Qualified Person
under the terms of NI 43-101.
The technical disclosure in this announcement has been approved
by Steven Poulton, Chief Executive of Altus. A graduate of the
University of Southampton in Geology (Hons), he also holds a
Master's degree from the Camborne School of Mines (Exeter
University) in Mining Geology. He is a Fellow of the Institute of
Materials, Minerals and Mining and has over 20 years of experience
in mineral exploration and is a Qualified Person under the AIM
rules and NI 43-101.
For further information you are invited to visit the Company's
website www.altus-strategies.com or contact:
Altus Strategies Plc Tel: +44 (0) 1235 511 767
Steven Poulton, Chief Executive E-mail: info@altus-strategies.com
SP Angel (Nominated Adviser)
Richard Morrison / Adam Cowl Tel: +44 (0) 20 3470 0470
SP Angel (Broker)
Grant Barker Tel: +44 (0) 20 3470 0471
Rob Rees Tel: +44 (0) 20 3470 0535
Shard Capital (Broker)
Isabella Pierre / Damon Heath Tel: +44 (0) 20 7186 9927
Yellow Jersey PR (Financial PR & Tel: +44 (0) 20 3004 9512
IR) E-mail: altus@yellowjerseypr.com
Charles Goodwin / Henry Wilkinson
About Altus Strategies Plc
Altus Strategies (AIM: ALS, TSX-V: ALTS & OTCQX: ALTUF) is
an income generating mining royalty company, with a diversified
portfolio of production, pre-production and discovery stage assets.
The Company's differentiated approach of generating royalties on
its own discoveries in Africa and acquiring royalties globally
through financings and acquisitions with third parties has
attracted key institutional investor backing. Altus has established
a global portfolio comprising 33 royalty interests and 26 project
interests across nine countries and nine metals. The Company
engages constructively with all stakeholders, working diligently to
minimise its environmental impact and to promote positive economic
and social outcomes in the communities where it operates. For
further information, please visit www.altus-strategies.com .
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this announcement, including
information relating to future financial or operating performance
and other statements that express the expectations of the Directors
or estimates of future performance constitute "forward-looking
statements". These statements address future events and conditions
and, as such, involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the statements.
Such factors include without limitation the completion of planned
expenditures, the ability to complete exploration programmes on
schedule and the success of exploration programmes. Readers are
cautioned not to place undue reliance on the forward-looking
information, which speak only as of the date of this announcement
and the forward-looking statements contained in this announcement
are expressly qualified in their entirety by this cautionary
statement.
All of the results of the Diba & Lakanfla Preliminary
Economic Assessment constitute forward-looking information,
including estimates of internal rates of return, net present value,
future production, estimates of cash cost, assumed long term price
for gold of US$1,750 per ounce, proposed mining plans and methods,
mine life estimates, cash flow forecasts, metal recoveries, and
estimates of capital and operating costs. Furthermore, with respect
to this specific forward-looking information concerning the
development of the Diba & Lakanfla Project, the Company has
based its assumptions and analysis on certain factors that are
inherently uncertain. Uncertainties include among others: (i) the
adequacy of infrastructure; (ii) unforeseen changes in geological
characteristics; (iii) changes in the metallurgical characteristics
of the mineralisation; (iv) the ability to develop adequate
processing capacity; (v) the price of gold; (vi) the availability
of equipment and facilities necessary to complete development;
(vii) the size of future processing plants and future mining rates,
(viii) the cost of consumables and mining and processing equipment;
(ix) unforeseen technological and engineering problems; (x)
accidents or acts of sabotage or terrorism; (xi) currency
fluctuations; (xii) changes in laws or regulations; (xiii) the
availability and productivity of skilled labour; (xiv) the
regulation of the mining industry by various governmental agencies;
(xv) political factors, including political stability.
Where the Company expresses or implies an expectation or belief
as to future events or results, such expectation or belief is based
on assumptions made in good faith and believed to have a reasonable
basis. The forward-looking statements contained in this
announcement are made as at the date hereof and the Company assumes
no obligation to publicly update or revise any forward-looking
information or any forward-looking statements contained in any
other announcements whether as a result of new information, future
events or otherwise, except as required under applicable law and
regulations.
TSX Venture Exchange Disclaimer
Neither the TSX Venture Exchange nor the Investment Industry
Regulatory Organization of Canada accepts responsibility for the
adequacy or accuracy of this release.
Glossary of Terms
The following is a glossary of technical terms:
"AISC" means All-In Sustaining Cost
"Au" means gold
"CIM" means the Canadian Institute of Mining, Metallurgy and
Petroleum
"g" means grams
"g/t" means grams per tonne
"grade(s)" means the quantity of ore or metal in a specified
quantity of rock
"IRR" means internal rate of return
"km" means kilometres
"LOM" means life of mine
"m" means metres
"MRE" means Mineral Resource Estimate
"NI 43-101" means National Instrument 43-101 "Standards of
Disclosure for Mineral Projects" of the Canadian Securities
Administrators
"NPV8" means net present value using an 8% discount rate
"PEA" means Preliminary Economic Assessment, as a study that
includes a preliminary economic analysis of the potential viability
of a project's mineral resources
"PMI" means potential mineralised inventory
"Qualified Person" means a person that has the education, skills
and professional credentials to qualify as a qualified person under
NI 43-101
"RC" means Reverse Circulation drilling
"RL" means Reduced Level (a level once it has been reduced to a
datum)
"t" means tonne (metric ton)
**END**
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