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TORONTO (miningweekly.com) – ASX- and TSX-listed gold producer Troy Resources on Monday reported positive results from an updated prefeasibility study (PFS) considering only an openpit mining scenario for its Smarts and Hicks deposits at its 100%-owned Karouni project, in Guyana, providing a faster route to production as opposed to including an underground mine.
The Perth, Australia-based company explained that the latest study considered only measured and indicated resources that were mineable by opencut and followed on from the Canadian National Instrument 43-101 preliminary economic assessment (PEA) and Joint Ore Reserves Committee scoping study that considered both the openpit and underground mining of the Smarts and Hicks indicated and inferred resources announced on January 21.
In April, Troy said to enable production to be brought forward to the first half of 2015, the initial prefeasibility would consider only the openpits, while a PFS for the underground operation would be completed at a later date.
The latest study assumed a base-case gold price of $1 250/oz, which resulted in a higher net present value at a 6% discount rate of $72-million and an after-tax internal rate of return (IRR) of 50.2%. The $84.6-million in capital expenditure would be paid back in 1.2 years.
The study estimated a three-year openpit mine life, producing on average 101 000 oz a year of gold, barring the first year in which 104 400 oz is expected.
The operation would use a conventional carbon-in-leach plant, augmented with gravity gold recovery treating a minimum of one-million tonnes and configured to allow for easy, low-cost expansion at a later date.
The plant would treat about 2.6-million tonnes of material at an average grade of 3.84 g/t gold, sourced 68% from Smarts and 32% from the Hicks openpit.
The assumed metallurgical recovery stood at 94%.
Over the life of the project, the average C1 costs were expected to total $480/oz, while all-in cash costs were estimated at $602/oz over the same period.
“We are very pleased with the results of the study which show that Karouni is an economically robust project with a payback of just over one year and an after tax IRR in excess of 50%.
"With completion of the outstanding geotechnical and metallurgical studies, we have completed the key design work and placed orders for all major plant and equipment. Pleasingly, we have been able to increase the initial plant throughput from 750 000 t/y to one-million tonnes a year without increasing the capital assumed in the PEA.
"Importantly, the study only includes resources currently classified as measured or indicated. There are enough drill-ready targets within trucking distance of the new plant site to keep the drills busy over the next few years and we are confident we will continue to add to the resource ounces,” Troy CEO Paul Benson said.
He added that the infill drilling of the deeper Smarts zone, which had been assumed to be mined from underground in the PEA, had proven the mineralisation to be structurally more complex. This reduced Troy's confidence in the continuity of mineralisation compared with the earlier modelling done by independent external consultants.
“Because of this we have reduced the amount of material classified as inferred resources until further infill drilling has been completed. This structure remains open at depth,” Benson explained.
Troy, which also operates the Casposo project, in Argentina, in April announced that to progress its Karouni project it had secured a A$100-million revolving three-year-term corporate facility with Investec Bank, with semi-annual repayments starting in June of next year.
The company’s TSX-listed stock was trading at C$1.16 a share on Monday, having gained 45% since the start of the year.