Name of the Project
Diamba Sud gold project.

Location
In the 53.2 km² Diamba Sud exploration licence, in eastern Senegal.

Project Owner/s
Boya SAU, a wholly owned Senegalese subsidiary of Chesser Resources. The Senegalese government is entitled to a 10% free carried interest in the project upon granting of the mining licence.

Project Description
A scoping study has determined that Diamba Sud represents a potential long-life, technically simple, low-risk and highly profitable mining operation that will generate significant benefits for all stakeholders.

The project comprises three openpits – Area A, Area D and Area D South – with total indicated and inferred resources of 15.2-million tonnes grading 1.6 g/t gold for 781 000 oz of gold. The scoping study does not include any potential mineral resources from the new discovery at Area H (Karakara). Envisaged is the development of an openpit mining operation and gold processing plant producing 704 000 oz gold over a 7.5-year mine life. Mining from the three openpits will be undertaken by a mining contractor using standard truck-and-shovel openpit methods.

The operation will comprise a two-million-tonnes-a-year carbon-in-leach (CIL) semiautogenous/ball circuit gold processing plant. Tailings from the CIL will undergo cyanide detox and then conveyed to a tailings storage facility. Raw water for processing will be sourced by seasonal pumping from the Falémé river to a water storage dam.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 5% discount rate, of $402-million and an internal rate of return of 69% at a $1 800/oz gold price, with a payback of 1.25 years from commercial production.

Capital Expenditure
Preproduction capital is estimated at $159-million, including $23-million in contingency.

Planned Start/End Date
Not stated.

Latest Developments
Given the low-risk nature of the project, Chesser has approved the start of a definitive feasibility study without the requirement for a preliminary study phase.

Key Contracts, Suppliers and Consultants
Chesser Resources (study compilation and geology), Dr John Arthur (resource estimation); Peter O’Bryan & Associates (geotechnical studies); Cube Consulting (mining design and scheduling); Majesso Consulting (mining operating costs); ALS, Lycopodium, JK Tech, IMO and Mintrex (metallurgical testwork); Mintrex (process engineering and design, operating, infrastructure, and capital costs); Chesser, Earth Systems SARL and ESS (environmental, social and licensing); Chesser and Senegalese (tax and fiscal terms); and Infinity Corporate Finance, Orimco and Chesser (financial modelling).

Contact Details for Project Information
Chesser Resources, tel +61 7 3854 2387 or email info@chesserresources.com.au.