AMN - COTE D’IVOIRE: Studies confirm Yaouré cost estimates

Perseus Mining has completed engineering and design studies that confirm cost estimates for the Yaouré Gold Project in Côte d’Ivoire. Yaouré is set to become the company's third operating gold mine in West Africa behind Sissingué in Côte d’Ivoire and Edikan in Ghana.

A value engineering assessment (VEA) and the front-end engineering and design (FEED) study has been completed by independent consultant Lycopodium Minerals for the project.

This work confirmed cost estimates in the October 2017 definitive feasibility study (DFS) that demonstrated the quality and strength of Yaouré.

Perseus managing director Jeff Quartermaine said, “The completion of the FEED study is an important milestone on the path to delivering Yaouré, our third gold mine.

“The study was completed on schedule and on budget and has delivered a satisfactory outcome with the capital cost less than 0.5% greater than the cost originally estimated in the Yaouré DFS.”

These studies were started by Lycopodium in June 2018 and work was completed on time and on budget on October 6.

Based on current plans, first gold is expected to be produced at Yaouré in December 2020.

Lycopodium is well qualified to undertake the studies having played a critical role in the successful engineering, procurement and construction of several high-profile West African gold mines in the last three years. This includes the Sissingué mine that was developed and commissioned earlier this year.

The scope of the VEA included evaluation of opportunities to improve plant design and optimise the estimated capital expenditure.

The FEED study focused on progressing the design of the processing plant and infrastructure to enable a detailed capital cost estimate to be prepared to a level of accuracy of plus or minus 10%.

Based on the FEED study, the total capital cost estimate for the development is US$264 million, including a contingency allowance of about 8%, which is within 0.5% of the DFS estimate.

The FEED study assumes that the process plant is developed under an engineering, procurement and construction (EPC) contract.

Quartermaine said, “With this estimate now in hand we can confidently advance the implementation of our finance plan.

“This involves deployment of a debt funding package to complement a combination of existing cash reserves and expected future cash flow from our two existing operations, both of which are performing in line with internal expectations and contributing to a steady build in net cash reserves.”

The Yaouré DFS reported that the project is:

- Economically attractive - IRR of 27% with a 32-month payback period at a US$1,250 /ounce gold price;

- Technically robust - 3.3 million tonnes per annum plant with average annual gold production of 215,000 ounces at an AISC of US$734/oz for first five years of production;

- Readily financeable - capital cost estimate of US$263 million and robust cash flows to service debt; and

- Able to be extended beyond its initial 8.5-year mine life through near mine opportunities to expand resources and reserves mineable using both open pit and underground mining techniques.

In the 2018 financial year, Perseus produced 255,916 ounces of gold, an increase of 45% on the previous financial year.

Sustaining capital average cost was lowered by 22% to US$1,039 per ounce with royalties also lower.

The increased production resulted in 36.5% higher revenue to $378.1 million.

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