The Fekola mine, in Mali.
JOHANNESBURG (miningweekly.com) – Dual-listed B2Gold on Tuesday announced “very positive” results from a preliminary economic assessment (PEA) for the expansion of its Fekola mine, in Mali.
Consequently, the company will be proceeding with an expansion project to increase processing throughput to 7.5-million tonnes a year from the current base rate of six-million tonnes a year.
The PEA was conducted to evaluate the life-of-mine (LoM) options for expanded mining and processing capacity to maximise the value of the substantially increased indicated and inferred mineral resource at the mine.
The study recommended an expansion of the existing plant to process an additional 1.5-million tonnes a year, without requiring an additional ball mill or additional power generation capacity.
B2Gold noted that, based on the new optimised mine plan, the mining rate at Fekola will also be increased, while additional mining equipment will be acquired to accelerate the supply of higher-grade ore to the expanded processing facilities.
As a result of the project and mineral resource expansion, the Fekola mine will produce more gold over a longer life, with more robust economics and higher average yearly gold production, revenues and cash flows than previously expected.
PEA RESULTS
The PEA assumed an effective date of January 1, 2019, a gold price of $1 300/oz and a discount rate of 5%.
It estimated an optimised LoM extension to 2030, including significant estimated increases in average gold production to over 550 000 oz/y during the initial five-year period, and more than 400 000 oz/y over the extended LoM from 2019 to 2030.
The study projected gold production of about five-million ounces over the new LoM, as well as an increase in the project’s net present value (NPV) of about $500-million, a pre-tax net cash flow of about $2.8-billion and a pre-tax NPV of over $2.2-billion.
Revised projected LoM cash operating costs and all-in-sustaining costs (AISC) are expected to remain low at below $500/oz and $700/oz, respectively. This despite mining a larger openpit at a slightly lower gold grade, largely as a result of economies of scale arising from increased mining and processing rates, as well as the new mining schedule.
During the five-year period to 2024 under the new optimised LoM, AISC is expected to average about $630/oz.
The estimated plant expansion capital cost is about $50-million over a period of about 18 months, half of which is expected to be spent this year.
It is anticipated that this will be financed from existing Fekola mine cash flows.
The PEA anticipates a capital payback period of less than one year.
UPSIDE POTENTIAL
B2Gold noted that its technical team, along with Lycopodium, Whittle Consulting, and others, continue to study and optimise several components of the Fekola mine.
Ongoing studies include optimising the mine production schedule and stockpile strategy, adding solar power, reviewing various tailings and waste disposal strategies and the potential to process material from the Anaconda project, located to the north of the mine, through the Fekola plant.
These studies will continue throughout the second quarter of this year and will be incorporated into a revised Fekola LoM plan, which is expected to be available by the end of the first quarter of 2020.