The project has a gold ore reserve of 5.1 million ounces (138.6 million tonnes at 1.13 g/t; 0.5 g/t cut‐off), inclusive of 400,000 ounces in the proved category and 4.7 million ounces in the probable category.
A feasibility study released in late 2019 concluded the project has strong economic returns with a post‐tax net present value of $590 million and an internal rate of return of 33.2% at a conservative gold price of $1,350 per ounce.
Progressing towards development
With the release of the study and accompanying technical report, additional banks, financiers and corporates have shown interest in project finance participation and have subsequently been granted access to the data room.
The company is also concurrently evaluating strategic alternatives to bring the project into production with a view to maximising economic outcomes.
The front-end engineering design (FEED) work for the project is progressing on schedule and the board has recommended progressing the project to construction pending successful completion of financing activities.
In conjunction with moving the Namdini project toward a financial investment decision, work continues on further optimising the project utilising Cardinal’s strong cash at bank of around $20 million.
The company is exploring the following options to enhance project economics:
- FEED and PEP programs incorporating a mine and schedule optimisation plan;
- OPEX savings by evaluating a flotation cleaner circuit with the potential to reduce required regrind power; and
- Additional mineral resources that are not part of the current ore reserves which represent lateral strike and depth extensions to the current life-of-mine pit design at US$1,235/ounce
Possible satellite pits
Cardinal has around 900 square kilometres of prospective exploration tenure within hauling distance of the proposed Namdini production plant, which remains a short‐term opportunity for enhancing project economics.
Recent results from exploration at Ndongo East defined seven prospects totalling around 70 kilometres in strike length and a detailed assessment of auger geochemical data using 1,306 auger soil samples was analysed for gold and multi-element results.
The results encourage further carefully measured investment into establishing viable shallow high‐grade mineralised zones, which could develop into possible satellite pits for the Namdini project.
Cardinal aims to execute a drill program through quarter one 2020 to test drill these high‐priority targets.
Exploration results from the Bongo licence area of 779 holes totalling 3,106 metres on a grid of 200-metre by 50-metre spacing is under review.
Corporate and financial outlook
In October, the company raised A$17.6 million through the exercise of listed options.
A total of more than 117 million options were exercised, being 99.84% of the listed options on issue.
Share in the company, which has a market cap of approximately $177.8 million, last traded at 36 cents, up from 29 cents on December 30, 2019.
Company directors Archie Koimtsidis, Malik Easah and Kevin Tomlinson exercised all their listed options in the company, totalling approximately A$1.67 million.
During the December quarter, the company also appointed David Anthony to the position of chief operating officer for the project.
Anthony’s extensive global experience includes the design, construction, optimisation and operation of 12 mines of which six gold mining projects were with Barrick Gold, including four in Africa.
His global experience and industry contacts will be valuable assets for Cardinal’s goal constructing the proposed 9.5 million tonnes per annum mine for the Namdini open pit gold deposit.