JOHANNESBURG (miningweekly.com) – Aim-listed gold and exploration company Stratex has completed an extensive due-diligence review into ASX-listed Crusader Resources’ Brazil-based Borborema gold project, identifying potential optimisation opportunities that are expected to yield material economic gains and lower upfront capital spend.
Stratex, which is in the process of acquiring Brazil-focused Crusader in an all-share deal, said in an update on Thursday that it intends to reflect these optimisation opportunities in its planned bankable feasibility study (BFS) on Borborema.
“The ongoing optimisation work that is being done has repeatedly demonstrated opportunities to lower operating costs and initial capital spend to construct the project and provides further value uplift," said Stratex CEO Marcus Engelbrecht.
Once implemented, the optimisation work will reduce capital expenditure to $100-million from the current estimate of $120-million owing to,
• a project shift to using mining contractors;
• a smaller footprint than previously expected and, therefore, a significant reduction on infrastructure spend;
• accessing electricity from on-site rather than through remote power lines;
• re-basing to the current average exchange rate;
• a more benign equipment supply and pricing environment; and
• lower grinding capacity requirements owing to positive metallurgy testing results.
Other optimisation opportunities identified by Stratex’s due diligence also include a revision of the mining schedule, which will prioritise easily identifiable and consistent higher-grade ore, as well as drilling and blasting efficiency improvements.
In addition, metallurgical testing results will present an opportunity to substantially reduce grinding volumes and mill throughput by diorite flotation of silica material.
Further, the project’s expansion drilling of footwall for resource extensions is expected to define additional low-cost reserve ounces.
Subject to successful completion of Stratex’s BFS on Borborema, Crusader currently expects final construction permitting within nine to twelve months once its transaction with Stratex is concluded, with decision to mine expected thereafter.
Meanwhile, Stratex reported that the conditional sale of the Posse iron-ore mine in Brazil is progressing as planned, with Crusader having received the first payment of $320 000. The remainder of the $2.57-million consideration is due to be received in 15 equal monthly payments, commencing October 31.
Engelbrecht noted that the successful sale of Posse by the Crusader management, and receipt of the first payment tranche, was the first step toward the company refocusing on developing its gold assets.
“The fundamental value proposition for both Stratex and Crusader shareholders in the proposed merger between the two companies is the underlying and unrealised value inherent in these gold assets and, in particular, in Borborema,” he concluded.