Hummingbird Resources plc announced that its joint venture partner Pasofino Gold Ltd had estimated costs of US$435 million to start the 2,559 km2 Dugbe gold project in southern Liberia.
PRODUCTION
The figure is part of the Pasofino’s filed feasibility study (FS) for the project, which comprises two defined deposits of Tuzon and Dugbe F.
Pasofino’s FS showed a throughput of 5Mtpa with an estimated head grade of 1.30 g/t over the potential mine life of 14 years.
For the first five years, the study estimated average annual production of 200,000 ounces (koz) for the first five years with a life of mine average of 172koz.
The combined Tuzon and Dugbe F pits have an average estimated recovery of 83%.
FINANCES
The Dugbe project would need start-up capital costs of US$435 million with a three-year payback period.
Post-tax NPV is set at 5% of $524m for a gold price of $1,700 /oz
Life of mine AISC is $1,005 /oz.
The mineral reserve estimate has 66Mt at a grade of 1.30 Au G/t for a total of 2,760koz.
Life of mine strip ratio is 4.02.
OPTION EXERCISE
Completion of the FS means Pasofino has satisfied the option exercise conditions.
The company now has 20 days from the date of its FS announcement to deliver the exercise notice to Hummingbird.
Pasofino would then acquire its 49% interest in the project (prior to the Government of Liberia’s 10% carried interest).
Both companies will have the right to exercise the option to consolidate ownership by converting Hummingbird’s 51% ownership of the project for a 51% shareholding in Pasofino, subject to approvals.
Hummingbird said that a strategic review of options was underway to realise the best maximum value of the project for all stakeholders.