Roxgold Inc. (TSXV:ROG), a Toronto based junior gold company focused on the Yaramoko project in Burkina Faso, has released results from its Preliminary Economic Assessment (PEA) for the 55 Zone on it's 100% owned Yaramoko permit.
The 55 Zone at Yaramoko has 850,000 ounces at 13.88 grams per tonne gold, with 250,000 ounces at 9.88 grams per tonne gold in the inferred category. Today's PEA shows robust economics for the West African gold project, where an underground operation is envisioned in the PEA that will be scheduled to run for 10 years and average 98,300 ounces of gold production for the first 5 years.
Highlights from the news release (All figures USD):
- Base case is stated assuming 100% basis and a gold price of $1,300/oz
- Pre-tax IRR of 59.2% with a 1.2 year payback on initial capital
- After-tax IRR of 47.7% with a 1.4 year payback on initial capital
- Pre-tax NPV5% of $250 million
- After-tax NPV5% of $192 million
- Estimated average annual gold production of 98,300 ounces for the first five years
- Current study mine life of 10 years
- Average metallurgical recoveries of 96% gold
- Average total cash costs of $455/oz (including royalties) for the first 5 years of production
- Average total cash costs of $530/oz (including royalties) for Life of Mine ("LOM")
- Estimated all-in sustaining costs of $681/oz for first 5 years
- Pre-Production capital of $93.8 million
The company will now embark on a Feasibility Study with SRK Consulting expected to be completed in Q2 2014.
John Dorward, Roxgold's CEO commented, "The Preliminary Economic Assessment on Yaramoko's 55 Zone marks a turning point for Roxgold from being an explorer to a development focused company. The conceptual economics outlined in the PEA, particularly for the first 5 years, are encouraging. The start-up capital costs estimated in the PEA would be manageable for a company of our size which supports our belief that Yaramoko has potential to continue towards development. We feel that the first five years provide a strong start to this project, and with the deposit still open below, the 55 Zone has the potential to increase its existing resources and improve the project economics through drilling from underground... Roxgold will now be focusing on our upcoming Feasibility Study ("FS"), which will expand upon the PEA and examine areas where there are opportunities for optimization. Additionally, we continue to pursue a targeted exploration program on areas such as Bagassi South, where we recently saw very encouraging drill results, as we search for the next resource on the Yaramoko Permit."
The company will be hosting a conference call and webcast presentation at 11:00 a.m. E.T. today September 16, 2013 to discuss these results. Instructions for listening to the call can be found in today's news release.
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