Subiaco-based gold company Perseus Mining says it will proceed with plans to develop its Sissingue mine in West Africa, following promising results in a revised feasibility study.
Subiaco-based gold company Perseus Mining says it will proceed with plans to develop its Sissingue mine in West Africa following promising results in a revised feasibility study.
The study indicated a mineral resource of 880,000 ounces of gold at Sissingue and proved a probable ore reserve of 429,000oz.
It also estimated average all-in sustaining costs of $US632/oz over the life of the mine, while start-up capital costs, including contingency, was estimated at $US106 million ($A137.8 million).
Production of 385,000 ounces of gold during a 5.25 year mine life was estimated at an average of about 75,000 ounces per year for the first five years.
“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 at Sissingue in Cote d’Ivorie,” managing director Jeff Quartermaine said.
“The development of Sissingue will result in a second production source and income stream that will decrease our reliance on the Edikan gold mine in Ghana for liquidity and income and through diversification, improve the consistency of our financial performance.”
Mr Quartermaine said two feasibility studies had already been undertaken at Sissingue, and involved a metallurgical test work program that delivered a strong understanding of the metallurgical properties of the ore body and a cost-efficient method of processing it.
Construction of Sissingue has been targeted for a September start, with first gold pour expected within 14 months.
Meanwhile, Perseus has also awarded Ausdrill an extension to its contract to provide open pit mining services at its Edikan project.
Ausdrill said the contract win would bring in about $US223 million ($A289.8 million) over five years, assuming that a two-year contract extension option is exercised.
The company will be providing open pit mining services to the Eastern Pits component of Edikan, with work scheduled to begin in the second quarter of the year.
Ausdrill has been providing its services to Perseus since 2011.
“The award of this contract clearly demonstrates the capability of Ausdrill to deliver quality service on schedule,” Ausdrill managing director Ron Sayers said.
Perseus recently updated its life of mine plan for Edikan, which is forecast to produce an average of 240,000oz of gold per annum at an average all-in site cash cost of $US937/oz.
Mr Quartermaine said the updated life-of-mine plan demonstrated that Edikan was an economically robust operation that had successfully come through an extended ramp-up phase.
“Over the past 12 months we have demonstrated that by focusing on achieving incremental improvements to both the technical and commercial aspects of our operation, we can consistently deliver credible results,” he said.
“The external environment in which we operate can be unpredictable and challenging at times. However, based on our performance we are very confident that we have a highly professional site team that is adaptable and more than capable of rising to these challenges when they occur.”
Mr Quartermaine said while it was not certain what would happen to the gold price going forward, working on the premise that given the state of global economics, a rise in gold price in the next five years was more likely than not.
“It is timely that development of our next gold mine should start at this point in the cycle as it will place us in a position to produce gold in the event of an uplift in gold price, rather than wait until gold prices have recovered and a trend of cost inflation has been re-established,” he said.
Perseus shares were 1.6 per cent lower to 29 cents per share at 10:45am.
Ausdrill shares were up 7.2 per cent to 29.5 cents each.