West Africa-focused emerging gold producer Papillon Resources has revealed that the Fekola gold project‘s Pre-Feasibility Study (PFS) yielded positive results.The company explained that the flagship Fekola gold project in Mali, West Africa, has confirmed the project’s technical viability, robust economics and capacity to operate with significant positive cash margins. “The completion of the PFS for the Fekola project confirms that the project is large scale, low cost and extremely robust. In fact, our sensitivities show that, using our current mining schedules, Fekola will still produce average pre-tax (post royalty) operating cash flows in excess of US$130 million per annum using a flat US$1,100 per ounce gold price. “During the initial nine year mine life, gold production averages in excess of 306 000 oz per annum, with all-in-sustaining cash costs of approximately US$725/oz. This scale of planned production will elevate Papillon into the mid-tier of gold producers, while operating with low all-insustaining cash costs of production,” stated Papillon’s MD and CEO, Mark Connelly. Papillon says the project currently hosts a mineral resource estimate (MRE), which comprises 54.97 Mt averaging 2.38 g/t gold for a contained 4.21 million oz of gold at a lower cut-off grade of 1.0 g/t gold, including 3.50 million oz of gold classified into the measured and indicated (M&I) resource categories. The PFS, which incorporates only the M&I resources, is based on opencast mining and a conventional carbon in leach (CIL) processing circuit, designed to process 4 million Mtpa during steady state operation. The Company will utilise contract miners thus removing the requirement for capital expenditure on fleet.
The company notes that the capital cost for the project is about US$292 million, including a 15% contingency, which comprises US$104 million for the processing plant, US$129 million for project infrastructure and US$21 million for indirect costs.Key operating results of the PFS include: Total gold production – 2.8 million ounces
Average gold production (LOM) – approx. 306,000 ounces per annum
Years 1 – 8 gold production – approx. 320,000 ounces per annum
Mine Life – 9 years
Cash operating cost (LOM) – approx. US$580 per ounce
Stripping ratio (LOM) – 3.0 : 1 (assumes low grade ore is processed)
Cut-off grade – 1.1 g/t The PFS production profile of nine years at approximately 306 000 oz per annum represents a solid base case for Papillon. Recent exploration results, which have demonstrated continuation of the high grade shoot down plunge and along strike to the north of the current pit, highlight the exploration potential of the project. It is expected that these results, and continuing exploration, will add significantly to the current base case production profile and mine life. Papillon said it will now undertake a review process prior to the award of the Definitive Feasibility Study (DFS), adding that opportunities to further enhance the project economics through capital and operating cost reductions identified during the review phase will be incorporated into the final scope of the DFS.