Shares of Avnel Gold Mining (TSE:AVK) surged 50% on Monday after the company reported a mineral resource estimate and preliminary economic report for its Kalana gold deposit in southwest Mali, saying the figures have prompted an immediate start of the next stage in the development process.
The in-situ resource at the deposit consists of 1.25 million ounces in the indicated category, plus another 0.25 million ounces of contained gold in the inferred category.
Based on this resource, the company commissioned a preliminary economic assessment of the project, which showed an after-tax net present value of US$194 million and a 53% IRR. The figures were also evaluated using a cut-off grade of 0.9 grams per tonne (g/t) gold and a gold price of US$1,110 an ounce, Avnel said.
Total capital projected was pegged at US$188 million, with all-in project costs, including operating and capital expenses, of US$679 an ounce.
The project, using a proposed conventional gravity and carbon-in-leach processing plant, would have average gold production of 138,000 ounces per year for the first four years, and then 98,000 ounces each year over the remaining 14-year life of the mine. The throughput rate for the mine would be 1.2 million tonnes per year, the company said, at an average head grade of 3.1 g/t gold.
"The robustness of the results of the MRE and PEA indicates the potential for the development of a new mine at Kalana and Avnel intends to immediately commence a pre-feasibility study and, assuming that to be positive, a feasibility study," said CEO of Avnel, Howard Miller, in a release announcing the latest figures.
"Whilst the PEA is by definition a preliminary assessment, the 2 year payback and project NPV (10% discount) of US$194 million after tax and imputed interest is very encouraging."
Avnel said that both the mineral resource estimate and the economic report were undertaken by Snowden Mining, which used a total of more than 132,000 metres of drilling data for the resource estimate.
The project, which is expected to recover 1.46 million ounces of gold, is anticipated to see first production in the second half of 2017, according to the economic report. The mineralization at the deposit covers an area of roughly 1,200 metres by 1,000 metres, Avnel said.
Shares of Avnel popped 50% to 21 Canadian cents in Toronto on Monday, pushing year-to-date gains to 55%. Reported by Proactive Investors 6 hours ago.
The in-situ resource at the deposit consists of 1.25 million ounces in the indicated category, plus another 0.25 million ounces of contained gold in the inferred category.
Based on this resource, the company commissioned a preliminary economic assessment of the project, which showed an after-tax net present value of US$194 million and a 53% IRR. The figures were also evaluated using a cut-off grade of 0.9 grams per tonne (g/t) gold and a gold price of US$1,110 an ounce, Avnel said.
Total capital projected was pegged at US$188 million, with all-in project costs, including operating and capital expenses, of US$679 an ounce.
The project, using a proposed conventional gravity and carbon-in-leach processing plant, would have average gold production of 138,000 ounces per year for the first four years, and then 98,000 ounces each year over the remaining 14-year life of the mine. The throughput rate for the mine would be 1.2 million tonnes per year, the company said, at an average head grade of 3.1 g/t gold.
"The robustness of the results of the MRE and PEA indicates the potential for the development of a new mine at Kalana and Avnel intends to immediately commence a pre-feasibility study and, assuming that to be positive, a feasibility study," said CEO of Avnel, Howard Miller, in a release announcing the latest figures.
"Whilst the PEA is by definition a preliminary assessment, the 2 year payback and project NPV (10% discount) of US$194 million after tax and imputed interest is very encouraging."
Avnel said that both the mineral resource estimate and the economic report were undertaken by Snowden Mining, which used a total of more than 132,000 metres of drilling data for the resource estimate.
The project, which is expected to recover 1.46 million ounces of gold, is anticipated to see first production in the second half of 2017, according to the economic report. The mineralization at the deposit covers an area of roughly 1,200 metres by 1,000 metres, Avnel said.
Shares of Avnel popped 50% to 21 Canadian cents in Toronto on Monday, pushing year-to-date gains to 55%. Reported by Proactive Investors 6 hours ago.