An updated feasibility study envisages an initial 11-year mine life including 4.5 years of underground mining, with average annual production of 211,000 ounces over the first five years.
Strong early cashflow
The study, which is based on a gold price of US$1,300 per ounce, outlines strong early cashflow and rapid payback of capital.
Managing director Richard Hyde said: “The updated feasibility study confirms that Sanbrado is robust, generating an after-tax IRR of 49% and paying back capital in less than 16 months.”
He said that the AISC put forward for the initial five years of mine life was US$551 per ounce.
Updated ore reserves
The study has updated ore reserves with the probable reserve up 76% to 20.4 million tonnes at 2.4 g/t gold for 1.574 million ounces.
Sanbrado is expected to comprise several open pits within 1-2 kilometres of the plant site and an underground mine accessed through a portal at the southeast end of the M1 South open pit.
Sanbrado Gold Project resources and site layout.
The plant will comprise a conventional SABC milling circuit, gravity and carbon in leach processing with a nominal annual throughput capacity of 2 million tonnes.
Scope to further improve value
Hyde said: “Recent intercepts including 11 metres at 10.5 g/t gold and 6 metres at 24.4 g/t, 70 metres beneath current resources and reserves, provide scope to improve project value further.
“A scoping study has also commenced focusing on the underground potential of M5.
“Drilling at M1 South and M5 is ongoing, with further resource and reserve updates expected by year-end.
“Discussions with project financiers are underway and the company expects to be in a position to appoint a banking syndicate by quarter four of 2018.”