Perseus Mining, listed on the ASX and TSX, has its updated Life of Mine Plan (LOMP) for its Edikan gold mine in Ghana, following a re-estimation of mineral resources and ore reserves. Independently estimated proved and probable ore reserves for Edikan total 56,5 Mt of ore, grading 1,14 g/t gold and containing 2 078 koz of gold as at 31 December 2016.
Aerial view of the Fetish open pit, one of several pits at Edikan (photo: Perseus Mining).
Comparisons of the updated Edikan mineral resource models against ore delineated by grade control during the last three months of 2016 and in January 2017 indicate that the updated resource estimates on which the ore reserves are based are likely to be more reliable predictors of ore tonnes and grades than the resource models used previously, resulting in a closer correlation between forecasts and actual gold production and improved reliability of the LOMP.
Consistent with the revised ore reserve that contains 15 % more tonnes, 8 % lower grade and 5 % more contained gold than previously estimated, the life of mine production profile is slightly flatter but extends for longer than the previous LOMP published in April 2016.
The estimated remaining life of mine gold production of 1 388 koz is 96,6 % of the amount estimated for the corresponding period in the previous LOMP. Gold production averages 214 000 ounces/annum over Edikan’s remaining 6,5 year mine life (from 1 July 2017) including production of approximately 240 000 ounces/annum for the next five years.
The forecast weighted average all-in site costs including all direct production costs, royalties, waste stripping costs and sustaining capital expenditure (AISC) are estimated at US$875 per ounce in the five-year period from 1 July 2017 to 30 June 2022 and US$864 per ounce over the full remaining life of mine.
The forecast sustaining capital costs (including the cost of site rehabilitation) which are included in the estimate of the AISC total US$34,5 million.
The Edikan LOMP forecasts strong positive after tax cash flow totalling approximately US$403 million, assuming a flat spot gold price of US$1 200 per ounce for the remaining mine life from 1 January 2017.
Perseus says the LOMP should be considered in conjunction with previously provided production and cost guidance for the June 2017 half year. With 25 % of the half year elapsed, Perseus is on track to achieve in the middle of the production guidance range of 90 koz to 100 koz of gold and is currently positioned towards the middle of the cost guidance range of US$1 000 to US$1 220 per ounce.
The updated LOMP for Edikan involves mining and processing of ore from six open pits based on optimisation, design and scheduling using a gold price of US$1 200 per ounce and input parameters based on Perseus’s operating experience including costs from recently contracted supply contracts.
Edikan first produced gold in August 2011 and achieved commercial production on 1 January 2012. It is located on the Ashanti Gold Belt.