Name and Location
Nyanza gold project, Kenya.

Client
Red Rock Resources holds a 15% direct interest in the Mid Migori Mining (MMM) Company and 32.27% indirectly through its 37.96% investment in Kansai Mining Corporation. MMM is the holder of the deposits that constitute the Mikei gold project. On completion of a bankable feasibility study (BFS), Red Rock will be entitled to a 60% direct interest, bringing its total to more than 75%.

Project Description
Nyanza, which comprises five deposits along a strike of 7 km, is part of the wider Mikei gold project, which has a Joint Ore Reserves Committee-compliant indicated and inferred mineral resource of 29.36-million tonnes at 1.26 g/t of gold.

Red Rock has appointed South Africa-based consultancy Applied Geology & Mining (AG&M) to start a preliminary technical and economic assessment, which constitutes the first stage of a feasibility study on the Nyanza gold deposit.

This study will inform the parameters and requirements for the next stages of the feasibility work. This will include a detailed technoeconomic valuation, environmental- and social-impact assessments, mine and plant design, as well as engineering and procurement studies.

AG&M has considered various options for the mining and processing of the Nyanza deposit and has reduced the possibilities to two main options.

Option 1 comprises an openpit mining operation using a mining contractor with only a gravity gold-recovery process plant. The tailings from this operation will be stockpiled and treated as an asset for further leach recovery should finances be available.

This option comprises two suboptions.

Option 1.1 initially targets the highest-grade pit possible and a mine life of 1.5 years, with production equating to
111 000 t of ore and an average feed grade of 7.4 g/t, depending on the gold price at production start-up and assuming the mine achieves the planned production targets.

Option 1.2 treats the full mineable inventory, which gives a life-of-mine of nine years, which equates to about 1.2-million tonnes of ore and an average feed grade of 4.1 g/t.

The payback period for this option is about six months.

Option 2 comprises two suboptions.

Option 2.1 phases in a carbon-in-leach (CIL) plant after an initial two-year period of dedicated gravity process.
The CIL process necessitates a tailings storage facility (TSF), which will need to be built at the start of the project. The average feed grade for the full mining inventory remains at 4.1 g/t.

Option 2.2 comprises an openpit mining operation using a mining contractor with a full gravity and CIL plant.
A TSF is required at the start of the project.

AG&M has selected a modular type of plant format, which introduces a large degree of flexibility to the project.

The best short-term option is a 20 t/h gravity circuit but, as the project progresses, the most likely option is to introduce a leach circuit to bring in ore from other sources and increase the processing capacity. The degree of flexibility introduced by the modular plant, combined with the various other ore sources, makes the project potentially very robust.

Net Present Value/Internal Rate of Return
This is yet to be determined; however, options 1.1 and 1.2 could potentially pay back the capital in six months.

The payback for Option 2.1 is initially six months, with a second payback period, estimated at nine months, possible when the CIL and TSF capital expenditure (capex) is introduced.

Value
Option 1.1 has a capex of $3.026-million.

Capex for each of options 2.1 and 2.2 will be $10.212-million.

Duration
It is envisaged that the full construction of the plant in Option 1.1 could be completed and operational within six months.

Latest Developments
None stated.

Key Contracts and Suppliers
Applied Geology & Mining.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Red Rock Resources, tel +44 20 7747 9990, fax +44 20 7747 9998 or email exploration@rrrplc.com.
Applied Geology & Mining, tel +27 11 234 9750 or fax +27 11 234 9488.