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GOLD
30
MODERN MINING
April 2016
A
ccording to African Gold Group,
Inc, which is listed on the
TSX‑V, the FS demonstrates
the robust nature of the project,
with the highlights including an
‘All In Sustaining Cost’ (AISC) of US$788 per
ounce and free cash flow of US$122 million
net of all capital expenditure, operating costs,
royalties and taxation in Mali, at a gold price
of US$1 200 per ounce. Mining and processing
supports gold production exceeding 50 000
ounces per annum over an eight-year mine life.
The low capital and operating costs of the
project reflect the fact that the deposit is eas-
ily mined and that the process plant will be
a relatively simple modular facility with only
modest milling requirements. The total power
requirements for the project are estimated at
just 1,9 MW, to be supplied by diesel gensets.
Located 125 km south-west of Mali’s capital,
Bamako, Kobada – acquired by African Gold
in 2005 from French company Cominor – has
its permitting in place, with the environmental
permit having been granted in June last year
and the mining licence shortly thereafter in
July. A community development plan (essen-
tial in Mali’s permitting process) has also been
completed.
The total measured and indicated mineral
resource at Kobada contains 1,21 Moz of gold,
with a further 1,02 Moz in the inferred category.
The FS only considers the processing of oxide
ore types. The proved and probable mineral
reserve is estimated to be 12,7 Mt at 1,25 g/t
containing 511 000 ounces of gold. The reserve
was reported within the optimised pit design
and above a cutoff grade of 0,53 g/t Au.
While the mineral reserve comprised only
material from the M&I resource, there remains
Mali’s Kobada open-pit gold
African Gold’s pilot plant at the Kobada site. It has a
throughput capacity of up to 2 t/h and is specifically
designed for metallurgical research.
Mali has a host of gold projects currently at various stages
of development, including B2Gold’s Fekola project, already
under construction and destined to be a plus 300 000 ounce
a year producer, Hummingbird’s Yanfolila and Avnel Gold’s
Kalana. Perhaps less well publicised than these is African
Gold Group, Inc’s Kobada gold project. Compared to Fekola,
it will be a relatively small mine but the recently completed
Feasibility Study (FS) demonstrates that it has attractive
economics, with the payback period on the estimated pre-
production capex of US$45,4 million being 31 months.
an important opportunity to improve the
resource category of the large inferred mineral
resource immediately to the north and south of
the reserve pits. African Gold plans to fund the
development of this resource upgrade from the
internal cash flow of a producing mine.
Contract mining is planned to be undertaken
using 40-t dump trucks and 70-t excavators.
This type of equipment is relatively common
in Mali, which allows significant flexibility in
scheduling the mining programme. The min-
ing schedule aims to deliver 1,6 Mt/a of ore for
processing. The saprolite to be mined is free
digging although it is anticipated that minor
use of blasting might be required for some parts
of the overlying laterite cap.
The life of mine strip ratio is estimated to be
3,28 to 1 (waste tonnes to ore tonnes). The strip
ratio during the first two years is maintained
at less than 2 to 1 with the mining of starter
pits. The final cut back is then initiated, with
the mining rate increasing to 11 Mt/a.
Further metallurgical test work was com-
pleted as part of the FS. A 305 kg sample of
saprolite ore was obtained from 64 m below
surface to examine the metallurgical response