THE BOURSE WHISPERER: Golden Rim Resources (ASX: GMR) has received the final results of a Scoping Study on the Netiana Lodes at the company’s Balogo project, in Burkina Faso.
The Scoping Study was undertaken by Coffey Mining to assess the viability of an open cut mining and processing operation to mine the project’s Inferred Resource of 850,000 tonnes at 6.8 grams per tonne gold.
Golden Rim said the Coffey Mining study had provided a concept mining and processing strategy that, over two years, could recover 133,000 ounces of gold.
“The final Scoping Study results from Coffey Mining are positive,” Golden Rim Resources managing director Craig Mackay said in the company’s announcement to the Australian Securities Exchange.
“They suggest that should Golden Rim proceed to develop a mine on the Netiana Lodes there is the potential for the company to have $40 million to $50 million in the bank after only two years of operation.”
The conceptual operation consists of a contractor mined open pit delivering 440,000 tonnes of ore to a modularised processing plant at an average grade of 9.3g/t gold.
Several processing options were considered with a small 30 tonnes per hour modularised plant emerging as the preferred option.
A smaller 20tph plant was deemed to be an alternate, lower capital, higher operating cost solution.
A recent metallurgical testing program determined overall processing recovery (non-optimised) of 95.4 per cent.
At the Scoping Study level of accuracy (±40 per cent) the capital cost for a new modularised 30tph plant is estimated at $39 million.
“The company is confident that the mine life of an operation can be extended with the discovery of satellite resources along strike from the Netiana Lodes,” Mackay said.
“A program of auger drilling is currently underway to identify satellite targets for reverse circulation drilling”
The Study estimated total CAPEX for the project at $46 million with the operating cost (OPEX) of $600 per ounce delivering a total cost for the project of approximately $950 per ounce.
Golden Rim indicated that although the Netiana Lodes is a short term project, its development appears robust in the form of a starter pit, with an estimated NPV of $46 million (after tax and royalties) and an IRR of greater than 100 per cent giving a CAPEX payback of less than 6 months at the 30tph processing option.
At the 30tph processing option and a gold price of $1,550 per ounce the Study suggested the mine would generate gross revenue of $104 million/year.
“Golden Rim will now conduct a detailed review of the results of the Coffey Mining Scoping Study and will seek proposals, including costings, from contractors to conduct a Definitive Feasibility Study on the Netiana Lodes,” Mackay said.
“It is also seeking proposals for the completion of the environmental impact study that will be conducted concurrently with the DFS.
“The path forward for a development on the Netiana Lodes will be determined once this process has been completed.”