African Gold says updated Kobada DFS delivers 'solid economics'
Highlights of the study include a pre-tax NPV5% of US$506 million with an IRR of 45%, and a post-tax-NPV5% of US$355 million (57% increase compared to 2020 DFS) with an IRR of 38%.
Total pre-tax project cash flow is US$733 million with net cash flow after tax and capital expenditure of US$550 million. Capital payback is 2.3 year upon production commencement.
The company said that the updated DFS envisions a 3 Mtpa operation producing 1.2 Moz of gold over a 16-year life-of-mine, with an average annual gold production of 100,000 oz over the first 10 years.
CEO Danny Callow commented, "Over the past two years we have worked tirelessly to demonstrate that the Kobada gold project has the potential to be one of the largest new gold projects in West Africa. Since the implementation of management changes in August 2019, and with new drilling campaigns totalling around 18,000 metres, we have managed to increase our reserve base by 144% (66% increase over the 2020 DFS)."
He added, "With our updated 2021 DFS we have shown that Kobada has the potential to produce over 1.2 mln oz of gold over a 16 year mine life while delivering solid economics with post-tax NPV5% of US$355 million and an IRR of 38%."
The company noted that Kobada is a predominantly free-dig operation, requires limited blasting, and processing of ore will be through a very simple and proven gravity plus CIL plant with recoveries over 95% in both oxides and sulphides.
The inclusion of sulphides in this updated DFS, which are free milling and easy to process, opens significant future opportunities within the sulphide resource as well as continuing growth possibilities in the oxides, the company added.