PERTH (miningweekly.com) – Gold miner Perseus Mining has reduced the expected capital costs of its Sissingue project, in Côte d’Ivoire, from $115-million to $106-million.

A 2010 feasibility study had estimated that the project would deliver an average 106 400 oz/y of gold over the six-year mine life, based on an initial probable reserve of 675 000 oz.

The initial study estimated that the project would deliver earnings before interest, taxes, depreciation and amortisation of $221-million during the first two years of production, and $337.4-million thereafter.

Announcing the results of a revised feasibility study for the Sissingue mine, Perseus noted on Tuesday that based on a revised measured and indicated mineral resource of 880 000 oz and a proven and probable reserve of 429 000 oz, the project would deliver 385 000 oz of gold during its nearly five-and-a-half-year mine life, at an average rate of 75 000 oz/y.

“Our revised feasibility study presents a strong case on both technical and economic grounds for proceeding to full-scale development of our second gold mine,” said Perseus MD and CEO Jeff Quartermaine.

“Equally as important, we believe there is a compelling strategic case to be made for moving into development at a time when many in the gold industry are pulling back from such decisions.”

Quartermaine noted that consistent with the company’s corporate strategy, the development of the Sissingue mine would result in a second production source and income stream for Perseus, that would decrease the company’s reliance on the Edikan gold mine, in Ghana.

It should also serve to materially reduce the company’s overall risk profile, as the second mine would provide a spread of geographical risk.

“We consider that the development risk associated with this organic growth initiative is relatively low compared to the alternative of growing through acquisition, given the amount of work that has been performed over the years leading up to the preparation of the revised feasibility study,” Quartermaine added.

He also noted that financing risks associated with the development of the project were relatively modest, given that the company had some A$149-million of net working capital at the end of March, and no third-party debt.

“While some of our existing cash is required for other projects, a portion of the cash will be allocated to fund Sissingue while the balance of the development funding will be borrowed from debt financiers.”

Perseus would move to finalise a funding package to fund the development of the project, as well as a mining convention with the Côte d’Ivoire government, while formulating a detailed project implementation plan.