Modern Mining April 2016

MINING News

Avnel Gold completes DFS on Kalana Main project in Mali

eralised zones that will be extracted by selective mining using 5 m benches. Bulk mining of the waste zones will be con- ducted on 10 m benches. The mine area consists of a weathered zone to an average depth of 60 m below surface which is amenable to free digging. The mining schedule targets the areas of saprolite that will generate higher cash flow early in the mine life. The pre-strip of six months will provide ore stockpiles to enable higher grade ore to be processed in the early years of the mine life. Mining will be conducted by the owner whilst maintenance of the open-pit min- ing machinery will initially be carried out by the original equipment manufacturer to ensure fleet availability. The maintenance plan provides for a five-year handover period to the owner after completion of the initial capital purchase of the full fleet component. ROM ore will be delivered from the mine to the processing plant, which con- sists of a conventional two-stage crushing circuit and a single-stage milling circuit to achieve a target grind size of 80 % passing 75 microns. The processing plant design is based on annual throughput rates of

Avnel Gold Mining, listed on the TSX-V, has announced the results of a Definitive Feasibility Study for its Kalana Main project in south-western Mali. The company is reporting a maiden mineral reserve of 1,96 million ounces (Moz) of gold and an updated measured plus indicated mineral resource estimate of 3,06 Moz of gold for the project. Highlights of the study (at a base case gold price of US$1 200 per ounce) include an after-tax 8 % NPV of US$196 million and an after-tax IRR of 38 % with a payback period of 1,2 years from the start of commercial production. The ini- tial net capital expenditure is estimated at US$163 million. During the first five years of operation, it is envisaged that Kalana would have an average annual throughput of 1,35 Mt milled and an average annual produc- tion of 148 000 ounces at a total cash cost of US$507/oz and an average on-site all-in-sustaining cost (AISC) of US$595/ oz. Average mill head grade would be 3,6 g/t Au with a gold recovery of 94,6 %. Total production over an 18-year life of mine (LOM) is estimated at 1,82 Moz with gold recovery of 92,7 %. Average

LOM annual production would be 101 000 ounces at a total cash cost of US$695/oz and an on-site AISC of US$784/oz. The Kalana project is owned by SOMIKA. Avnel has an 80%equity interest in SOMIKA and the Malian government holds a benefi- cial interest in the remaining 20 %, which has anti-dilution and free-carry rights. SOMIKA owns and operates the Kalana gold mine, a small, Soviet-era, under- ground gold mine, and holds the rights to the Kalana Exploitation Permit, a com- bined exploitation and exploration permit covering a surface area of 387,4 km 2 . The permit is host to 29 exploration targets, including the Kalana Main deposit. The DFS was led by Snowden Mining Consultants with the support of several leading consulting firms, all of whom have extensive experience in Mali, including Ivor Jones of Denny Jones (Pty) Ltd, DRA Projects and Epoch Resources. The DFS mine plan provides for 18 years of production from the Kalana Main deposit from a single open pit with 12 stages. A total of 228 Mt will be mined with a LOMwaste-to-ore ratio of 9,9:1 including the pre-strip. The deposit contains high grade min-

The processing flowsheet for the Kalana Main gold project.

18  MODERN MINING  April 2016