ASX-listed Mozambique gold explorer Auroch Minerals is looking to produce first gold from its Manica project in the first quarter of 2015.This is an exciting announcement and development for the company considering study and evaluation work on the project has been ongoing for years, well before Auroch was even established and the project belonged to Pan African Resources, who still owns a 46% stake in the project. “The development of Manica will give us a first mover advantage and allow us to accelerate our consolidation strategy in the area, giving the company momentum and critical mass. This will provide a stable platform from which the company can create cash flow and operate at the lower end of the total cash cost curve. These are exciting times for all stakeholders as we make the transition from exploration to development,” highlights MD Dean Cunningham. Independent advisers JP Mining Consulting, which recently completed a scoping study on its existing non-refractory and Fair Bride transitional resources, has revealed that there are viable simple shell open pits for the Fair Bride and Dot’s Luck deposits and shallow depth underground open stoping potential on the Guy Fawkes deposit. Mining from these three deposits (initially opencast progressing to shallow underground) would be processed from a centralised processing plant on the mining concession with a throughput rate of 720 000 tpa (or 60 000 tpm) at an average head grade of 2.23 g/t gold to produce about 40 000 ozpa. This will require an initial capital expenditure of A$31.6 million in May 2013. While the three deposits are only a small portion of Manica’s longer-term potential, it already translates to an estimated 273 469 oz of gold production over an operating life of mine (LOM) of seven years with an average total operating cost of A$39.29/t milled or US$641.92/oz produced (excluding capex and before tax, depreciation and royalties). The study has assumed a long term gold price of US$1 200/oz. In order to achieve its “near term route to production” target, the company will immediately commission a definitive feasibility study (DFS) focused on its existing free-milling, non-refractory and transitional resources within the Fair Bride, Guy Fawkes and Dot’s Luck project sectors. Cunningham says it will take about nine months to complete. By generating cash quickly, the funds will be used to generate cash flow to fund future exploration activities.
Near Term Route to ProductionAuroch will now only focus on activities to complete the DFS from its existing cash resources. Basil Read Matomo has been appointed to the DFS contract and will be responsible for the plant. The following activities going forward are priority and include: 1. Complete the environmental license requirements on the Manica concession. This entails collectively finalising and submitting the following by 1 February 2014:
- Environmental Impact Assessment report (EIA) – SLR Consulting (Africa) has been appointed by Explorator Limitada, the company’s wholly-owned Mozambican subsidiary.
- DUAT – The DUAT (Direito de uso e aproveitamento de Terra) is a land use licence which allows the holder to use a portion of land with exclusivity in Mozambique.
- Completion of infill drilling at the Guy Fawkes and Dot’s Luck deposits to upgrade the confidence categories of existing resources (cost US$360 000); and
- Metallurgical test work at the Fair Bride, Guy Fawkes and Dot’s Luck project deposits to confirm the amenability of the non-refractory resources to traditional carbon in leach processing (cost US$60K).