AMN - MOROCCO: Achmmach underground mine possible

The Definitive Feasibility Study for the Small Start Option (SSO) at the Achmmach tin project of Kasbah Resources (75%), Toyota Tsusho Corp (20%) and Nittetsu Mining Co Ltd (5%) in Morocco is complete and has determined that a 0.5 million tonnes/year, high-grade underground operation is technically and commercially feasible.

Highlights include:

-          Ore reserve of 6.56 million tonnes @ 0.85% tin

-          Stage 1 mine production = 1.89 million tonnes @ ≈0.96 % tin

-          Stage 2 Mine Production = 4.67 million tonnes @ ≈0.80 % tin

-          Life of Mine (LOM) = 10.5 years

-          Average annual production of ≈3,970 tonnes of tin in concentrate

-          All in sustaining costs (AISC) of $11,541/tonnes tin

-          Project construction capital cost of $61.7 million

-          On an after tax, ungeared basis (using the 21/7/16 LME spot Sn price of $17,830/tonne and an 8% discount rate), the Definitive Feasibility Study generates an NPV of $73 million, an IRR of 25.4% a payback period of 3.4 years, a LOM free cash flow of $154 million

-          Discussions with potential financiers are advancing.

In March, Kasbah released to the market an enhanced definitive feasibility study into a 1 million tonnes/year underground mine and processing facility for Achmmach. This large-scale, capital intensive project required construction capital of $131 million to establish the 1 million tonnes/year project and in a weak financing, commodity and equity market, the capital requirement was a significant impost to project development.

To address these issues and the continued fall in the LME tin price during 2015, Kasbah started investigation into a lower cost development model.

The 2016 Achmmach SSO Definitive Feasibility Study has defined a lower capital, higher grade, staged development opportunity that is technically and economically feasible at current LME tin prices. Importantly the project construction capital (on a 100% basis) is estimated to be $61.7 million with AISC of $11,541/tonnes of tin in concentrate.

The SSO Definitive Feasibility Study is premised upon a hard rock underground tin mine with a ten year life that is developed in two stages. Stage 1 production initially commences at 500,000 tonnes/year for 42 months then is expanded in Stage 2 to 750,000 tonnes/year for 80 months (the remainder of the mine life).

This staged approach utilises contract mining, contract crushing and modular plant design and unlike the 1 million tonnes/year scale where the full capacity was installed upfront, the SSO offers greater operational flexibility.

www.kasbahresources.com