JOHANNESBURG (miningweekly.com) – Based on the positive outcomes of an updated feasibility study for junior gold miner Red 5’s Siana gold project, in the Philippines, the Siana underground mine has been approved for development and is scheduled to start in the second half of this year.
The feasibility study indicated a financially and technically viable underground project based on a Joint Ore Reserves Committee-compliant ore reserve comprising 3.01-million tonnes gold at 4.1 g/t gold for 396 000 oz of contained gold.
The study also considered a long-term mine plan based on the whole underground resource, including measured, indicated and inferred material.
“This is a great result for the Red 5 group,” said MD Mark Williams, adding that the successful update of the feasibility study marked a significant milestone for the Siana operation.
“This demonstrates that the proposed Siana underground development is an economically robust project that will significantly extend the life of the operation well beyond the current openpit operations, with an initial mine plan based on the extraction of 504 000 oz of gold over a nine-year mine life, including development,” he said.
Red 5 noted that other key feasibility study outcomes for the long-term plan included an average yearly forecast of 60 000 oz/y in recovered gold production over an eight-year mine life and forecast life-of-mine all-in sustaining costs of between $930/oz and $980/oz.
The group also forecast a pretax net present value of $50-million, assuming a $1 200/oz gold price and a 10% reduction rate; an internal rate of return of 22%; and a preproduction capital cost estimate of $60-million.