An improved ore reserve statement and updated economic sensitivities, based on the new reserve and mine schedule for Aim-listed gold miner Hummingbird Resources’ Yanfolila gold project, in Mali, have improved the project’s economics, the company reports.

Yanfolila is located within one of several subbasins along the eastern margin of the Greater Siguiri basin, which, in turn, straddles the Mali-Guinea border.

The project has total resources of 1.8-million ounces of gold and an additional 390 700 oz of noncompliant exploration potential. The high-grade gold project has the potential to turn a profit in a varying gold price environment and will allow for quick returns with low operating costs, according to the company.

The updated probable reserves of the project include 7.04-million tonnes of ore, with 709 800 oz of gold at a grade of 3.14g/t.

Results from the optimised mine schedule increased the net present value (NPV) to $162-million using a $1 250/oz gold price, while the forecast internal rate of return (IRR) increased to 60% using the same gold price, Hummingbird Resources CEO Dan Betts noted in a company statement.

“An all-in sustaining cost (AISC) of under $700/oz and a 42% IRR at a $1 100 gold price clearly mark Yanfolila as one of the highest-margin, undeveloped gold projects in Africa. At a $1 250 gold price, the IRR jumps to 60% and the NPV to $162-million, with first full-year unleveraged cash flow of $74-million,” he said.

Betts noted that the improved project economics leave the company in a better position to negotiate the final funding package for the development of Yanfolila to production, with the recently secured six-month bridge extension to September 8, 2016, providing Hummingbird with the time to do this.

When Hummingbird published its definitive feasibility study (DFS) on January 18, it stated that it was optimising the mine schedule, based on the maiden reserves from December 2015.When the DFS was announced, the mine schedule did not incorporate the maiden ore reserves and, consequently, had a lower grade of ore and additional waste material.

However, mining consultancy CSA Global, which completed the maiden ore reserve report, has completed the mine schedule using the updated ore reserve, compiled in accordance with the 2012 Joint Ore Reserves Committee edition. The DFS financial model has been updated to incorporate the increased ore reserve and new mine schedule.

Reasons for updating the reserve include reoptimising the pit shells using current cost estimates, verified metallurgical recoveries and geotechnical data; redesigning the pit, based on the optimal pit shells; new staged pit designs and updated mine production schedules, based on the latest staged designs; and lower mine dilution, based on detailed geometry studies and the correct grade control being used.

Hummingbird’s projects include the 4.2-million ounce Dugbe gold project, in Liberia. An optimisation of the DFS is ongoing.
The company has 4 000 km2 of highly prospective exploration ground in Mali and Liberia, and is constantly evaluating new high-quality assets.