Modern Mining September 2018

MINING News

Decline development for Ilunga starts early

The current mine design of Ilunga has the potential to contribute up to 25 000 tonnes per month of high grade ore with an estimated average contribu- tion of 20 000 oz per planned level of development. This will enhance the eco- nomics at NLGM but not increase overall production. The underground mining team is 100 % owner-managed, ensuring that develop- ment costs will be kept to a minimum and resources between the three active under- ground deposits are shared. “With operations performing well at New Luika, and following the cost cutting initiatives implemented since September 2017, we expect the balance sheet to con- tinue deleveraging,” comments Eric Zurrin, Shanta’s CEO. “We will shortly have three active sources of high-grade ore following the commencement of underground devel- opment at Ilunga. With mining flexibility providing operational stability, Shanta is renewing its focus on exploration. Over the next two years, Shanta is targeting high priority exploration targets on its mining licences which include down dip extensions at Shanta’s high-grade Bauhinia Creek and Ilunga deposits.”  tracted mining costs, fuel and labour. Forecast sustaining capital costs (includ- ing the cost of site rehabilitation) are included in the estimate of the AISC, and total US$31,9 million or US$29 per ounce. Edikan’s revised LOMP forecasts the generation of strong positive after-tax cash flow totalling approximately US$264 million, assuming a flat spot gold price of US$1 250 per ounce for the remaining mine life. Perseus’s Chief Executive Officer and MD, Jeff Quartermaine, said: “Having suc- cessfully brought our second operating mine, Sissingué, on stream earlier this year, we have achieved a level of operational flexibility that has enabled us to think strategically about how we execute our business at Edikan. Instead of focusing on satisfying expectations of Edikan that were created in a different market environment, we have designed a mine plan that seeks to maximise the production of profitable ounces rather than maximise ounces of gold produced at this mine.” 

The portal of the Ilunga underground mine (photo: Shanta).

In an update on its operations in Tanzania, AIM-listed Shanta Gold reports that it has commenced underground decline devel- opment at the Ilunga underground mine three months ahead of schedule with first ore expected in mid-2019. Ilunga will shortly be the third active source of high-grade ore at Shanta’s New Luika Gold Mine (NLGM) and has a JORC

mineral reserve grading 5,56 g/t, which is higher than the Luika deposit. NLGM is Shanta’s flagship operation and is located in the Lupa goldfield north of Mbeya in south-west Tanzania. The mine entered production in 2012 and produced 79 585 ounces in 2017. Shanta also owns Singida, an exploration and development stage project located in central Tanzania. grade ore does not generate superior cash flows. All other costs, recoveries and mill throughput rates and run times have been updated to reflect recent performance. Gold production averages 181 000 oz/a over Edikan’s current six-year mine life with the production profile altered relative to the previous LOMP due to the change in mining strategy, which distributes the total material movement and associated mining costs, the amount of ore mined and the grade of the ore available to be fed to the mill more evenly over the life of mine. Forecast weighted average all-in site costs including all direct production costs, royalties, waste stripping costs and sustaining capital expenditure (AISC) are US$950 per ounce over the remaining life of mine. This represents a 10 % increase in average AISC relative to the previous LOMP, resulting mainly from production of 7 % fewer ounces, cost inflation on con-

Perseus updates Edikan Life of Mine Plan Perseus Mining, listed on the ASX and TSX, has updated the Life of Mine Plan (LOMP) for its Edikan gold mine in Ghana following a re-estimation of ore reserves. Proved and probable ore reserves total 44,7 Mt of ore, grading 1,09 g/t and containing 1,57 Moz of gold as at 30 June 2018.

Estimated total gold production of 1,08 Moz over the current six-year mine life is 93 % of the amount estimated for the corresponding period in the previous LOMP. The reduction is largely a result of net changes in cost, throughput rate and run time impacting cut-off grade and pit design. The updated LOMP assumes a revised mining strategy from January 2019 involv- ing use of a single mining contractor and mining at a reduced rate of total material movement compared to the February 2017 LOMP. Mining will not be as selec- tive as past experience has indicated that selectively mining and processing high

16  MODERN MINING  September 2018