In a news release, Roxgold Inc. (ROXG:TSX) announced "the results of a Preliminary Economic Assessment (PEA) for the high-grade Séguéla Gold project in Côte d'Ivoire." Roxgold noted that the PEA, which was prepared in accordance with NI 43-101 standards, "provides a base case assessment of developing the Antenna, Ancien, Agouti and Boulder deposits as open pit mines feeding a central gold processing facility." The company stated that it plans to continue with its goal of growing the Séguéla resource base and advancing it to the feasibility stage.
The company highlighted some of the key data points from the PEA and estimated total Life of Mine (LOM) production of 841 Koz Au averaging 103 Koz Au annually. For the first three years the firm forecasts average annual production of 143 Koz Au and estimates that production will peak at 154 Koz in year three.
The company calculated that average cash costs will be $605/oz over the LOM which includes cash costs of $475/oz during the first three production years and anticipates average all-in sustaining costs (AISC) of $749/oz over the LOM, including an AISC of $600/oz over the first three years of production.
Roxgold advised that it will incur pre-production capital cost of $142 million, which includes a $20 million contingency. The firm plans to construct a conventional processing plant capable of processing 1.25 Mt/year with built-in plant scalability to accommodate future expansion.
The company expects that the LOM after-tax net cash flow will be $354 million based upon a $1,450/oz gold price. Under that scenario, project payback would be just 1.2 years and with Roxgold's 90% interest in the project that would generate a net present value (NPV) of $268 million and provide for an internal rate of return (IRR) 66%. In the event that gold spot prices were to rise to $1,750/oz, the firm claimed that NPV would increase to $379 million offering an IRR of 88%.
The company's President and CEO John Dorward stated, "The PEA illustrates the substantial value accretion of the Séguéla Gold Project which stands alongside our current operations to build the foundation for Roxgold and its future. We acquired Séguéla in April 2019 for $20 million and through the hard work of our exploration and project team have been able to generate exceptional prospective project economics with an after-tax NPV attributable to Roxgold of $268 million and an IRR of 66% at a gold price of $1,450/oz."
"We have identified several opportunities to expand and optimize the PEA, which we intend to evaluate as we proceed towards a Feasibility Study, which is well underway and with an anticipated completion in H1/21," Dorward added.
The Séguéla Gold project is located approximately 240 km north-west of Côte d'Ivoire's political capital Yamoussoukro. The property is defined by two exploration permits and covers approximately 36,300 hectares.
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