PERTH (miningweekly.com) – An updated scoping study into takeover target Orbis Gold’s Natougou project, in Burkina Faso, has delivered a $169-million increase in expected revenue, and a $87-million rise in the project’s net present value (NPV).

The new scoping study incorporated an updated resource estimate, and delivered an increase in gold production and sales over an extended mine-life, while waste and strip ratios were lowered.

Compared with the initial 2013 scoping study, The Natougou project was now expected to deliver revenues of some $1.9-billion, compared with the A$1.7-billion reported in the previous study, while the NPV of the project has increased from $446-million to $533-million.

The project’s internal rate of return has also increased from 60% to 100%, while free cash-flow has increased from $560-million to $639-million. The project’s payback period also decreased from 17 months to just 8 months.

The Natougou project was expected to deliver total gold sales of some 1.5-million ounces, up from the previously estimated 1.3-million ounces, and based on a two-million-tonne-a-year operation, would have a mine life of 6.7 years, up from the previously estimated 6.2 years.

“We are extremely pleased with the results of the updated scoping study. A successful drilling programme in early 2014, and subsequent updated mineral resource at Natougou, has provided for a radically enhanced project,” said Orbis MD Peter Spiers.

“The improved economic assessment highlights the immense value to be unlocked over the near term as Orbis Gold rapidly finalizes its definitive feasibility study in order to start development at Natougou.”

The definitive feasibility study on Natougou was more than 50% complete, and would be completed by mid-2015.

Orbis recently became the target of a planned takeover by Canadian gold miner Semafo, which would be offering Orbis shareholders between 62c and 65c in cash for their shareholding in the ASX-listed Orbis.

However, Orbis has rebuffed the offer, saying it undervalued the company and its assets.