PMI Gold closer to Obotan project approval

PMI Gold Corporation has reported positive results from a pre-feasibility study for its Obotan gold project in Ghana, saying the results provide a good basis for securing funding.

The study estimated the project would have capital costs of US$183.5 million, excluding pre-strip mining costs of US$68.3 million.

It estimated a pre-tax net present value (NPV) of US$680.5 million and post-tax NPV of US$416.4 million, based on production of 205,600 ounces per year.

The bankable feasibility study for the project is targeted for completion by the end of June 2012, paving the way for a decision in the September 2012 quarter.

PMI's managing director and CEO, Colllin Ellison said, "PMI has an objective of commencing plant commissioning in Q4, calendar 2013 and gold production by the start of calendar 2014, requiring the issue of tender documents to preferred contractors in Q1, calender 2012."

"This timetable will enable PMI to join the ranks of leading West African gold producers by early 2014. We are now well placed to make the transition from explorer to producer on an exciting project which has been sifgnificantly de-risked through the earlier successful mining that was carried out at gold prices less than US$350 per ounce.

"Our target now is to identify and develop new shallow oxide resources and increase regional exploration. We believe the ensuing period will be one of strong news flow from drilling, as well as, an upgrade of the JORC/NI 43-101 resource base at the Obotan Project next month."