African Gold Group (AGG) reported that a completed definitive feasibility study of its Kobada gold project in southwest Mali supports development of an open-pit project producing 50,000 oz/y of gold over a mine life of eight years. All-in sustaining costs are estimated at $788/oz. Proven and probable reserves in two pits total 12.7 million mt grading 1.25 g/mt gold and containing 511,000 oz of gold.
Total pre-production capital expenditure to develop the Kobada project is estimated at $45.4 million, with an additional $15.7 million of sustaining capex and $21 million of capitalized waste mining over the life of the project. Project economics are based on a gold price of $1,200/oz. AGG plans to use the feasibility study to support funding initiatives for development of the project.
Contract mining will be based on 40-mt trucks and 70-mt excavators. The mining schedule calls for delivery of 1.6 million mt/y of ore to the process plant. The extraction process is expected to recover an average of 82% of the gold contained in ore. Detailed design of the plant and ordering of longer-lead time items is planned to begin in July, with plant commissioning targeted for September 2017.
Kobada project proven and probable reserves are contained in measured and indicated mineral resources totaling 1.2 million oz of gold. Additional inferred resources total 1 million oz. AGG plans to fund further development and up-grading of these resources using internal cash flow generated after the start of mine production.
AGG is a Canadian company listed on the TSX Venture exchange.