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Gryphon ‘significantly’ enhances Burkina Faso project economics

Gryphon ‘significantly’ enhances Burkina Faso project economics

Photo by Bloomberg

6th July 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – An updated scoping study into the Banfora gold project, in Burkina Faso, has significantly increased the project’s economics, owner Gryphon Minerals reported on Monday.

The optimised study has increased the project’s after-tax net present value from a 2014 estimate of A$90-million to A$210-million, while the internal rate of return has increased from 20.5% to 42.2%.

The optimised study considered the development of a two-million-tonne-a-year heap leach start-up operation, as well as the upside potential for expansion by adding a conventional one-million-tonne-a-year carbon-in-leach (CIL) processing plant.

The 2014 study only considered a two-million-tonne-a-year heap leach operation, and estimated capital costs at some $97-million.

Gryphon on Monday told shareholders that the optimised study estimated a capital spend of some $210-million, with $85-million earmarked for the heap leach operation and $45-million for the CIL processing plant. The CIL costs could be funded with early cash flow from the initial heap leach operations, MD Steve Parsons said.

“We are very pleased with the results of the studies which demonstrate significantly enhanced project economics for the initial start-up two-million-tonne-a-year heap leach operation and additional one-million-tonne-a-year CIL expansion capacity.”

Gold production during the initial heap leach operations would average about 63 300 oz for the first two years, while access to near-surface higher-grade transitional material could increase production to an average of 78 600 oz/y.

Cash costs for the heap leach operation were expected to average $665/oz for the first two years of operation.

With the addition of the CIL plant, gold production was expected to increase to about 130 000 oz/y, while cash costs would increase to $717/oz and all-in sustaining costs for the life of the mine would be $811/oz.

With the addition of the CIL plant, Banfora’s mine life was expected to decrease from the 9.2 years estimated in the original scoping study, to 7 years.

“With the optimisation and additional capacity studies completed and a granted mining permit in place, Gryphon can now move to completion of debt funding due diligence, which is one of the final hurdles to commencing development at Banfora,” said Parsons.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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