Aim-listed gold and nickel exploration and development company Katoro Gold reports that a scoping study on its joint venture (JV) Blyvoor Gold tailings retreatment project has an unlevered project net present value of $131-million, a 25% internal rate of return and a return on investment of 260%.

Mining consultant and explorer Minxcon was mandated by JV partner Blyvoor Gold Operations to complete a scoping study on the project, in Carletonville, to independently assess and evaluate all historical technical studies and development work that has been done in terms of the tailings facilities.

Minxcon was required to consult on whether the historic technical work done is adequate in scope and standard to immediately proceed with definitive or bankable feasibility studies and on the economic, technical and operational feasibility of the Blyvoor gold tailings retreatment project.

Based on the current data available, Minxcon has estimated the potential mineral resource at the project to be 1.29-million ounces of gold, with 277 000 oz in the measured and indicated categories and 1.01-million ounces in the inferred category.

The study also revealed a mine life of 25 years, building to a production capacity of 500 000 t/m and 35 000 oz/y of gold.

Overall production of gold is in the order of 661 171 oz over 25 years, generating revenue of $992-million.

Based on a gold price of $1 500/oz, the study points to a low-cost operation, with an estimated all-in sustaining cost of $727/oz of gold and an all-in cost of $920/oz.

Total project capital costs are $110-million across the life of the project, with a peak funding requirement of $36.4-million.

Katoro executive chairperson Louis Coetzee says that when Katoro signed the project agreement in January, the company believed the project represented a unique opportunity for near-term gold production and potentially considerable financial returns.

"We were keen to subject the project to thorough independent validation and the completion of the scoping study was an important step in that process with pleasing results.”

He adds that the study has highlighted areas where, in the build-up to production, Katoro can add further technical and economic value, and has confirmed that sufficient historical work has already been undertaken to allow the project to immediately progress to the definitive feasibility stage.

"A detailed review of the [scoping] study is now under way and a further update to the market will be provided in due course considering the findings in detail and outlining the next steps in project development, including with regard to project level financing negotiations."