Mato Bula Gold Copper Project
- Post-tax NPV of US$ 56.6M for base case using US$1,325 /oz Au, US$3.00/lb copper and US$17.00/oz silver, at an 8% discount rate.
- Payback of pre-production capital in 3 years from start of production.
- C1 cash operating cost of US$412/oz Au including all on-site costs and AISC cost of US$620/oz Au calculated with all on-site and off-site costs, TCRC charges, sustaining costs and net of by-product credits.
- Average annual metal production of approximately 34,750 ozs gold, 1.67 million pounds copper and 4,780 ozs silver.
- Pre-production capital cost of US$54.2M million including contingency of 38% on direct costs and 26% on total of direct and indirect costs.
- Open pit mining utilizing drill blast, trucks and shovels, waste stripping ratio of 9/1.
- Processing rate of 1,400 t/day using conventional crush/grind comminution, gravity concentration and flotation to produce a copper-gold concentrate. In addition a gold bearing pyrite concentrate will be produced and treated off-site by Carbon in Leach technology.
- Life-of-mine metal recoveries of 86.4% for gold, 87.4% for copper, and 50% for silver.
- Concentrate grades average approximately 132 g/t gold, 25.5% copper and 28 g/t silver.
- Minimum 8 year mine life, based on proposed open pit depth of 190 metres.
- Significant potential exists to extend mine life as drilling has identified mineralization along strike and to 370 metres down dip.
Da Tambuk Gold Project
- Post-tax NPV of US$13.0 M and IRR of 28.6% for base case using US$1,325 /oz Au and US$17.00 /oz silver, at 8% discount rate.
- Payback of pre-production capital in 1.9 years from start of production.
- C1 cash operating cost of US$420/oz Au including all on-site costs and AISC cost of US$642/oz Au calculated with all on-site and off-site costs, TCRC charges, sustaining costs and net of by-product credits.
- Average metal production of approximately 24,000 ozs gold per year and 6,000 ozs silver per year.
- Pre-production capital cost of approximately US$34.1 M including contingency of 36% on direct costs and 26% total of direct and indirect costs.
- Underground trackless mining utilizing ramp access, cut and fill and open stope mining.
- Processing rate of 550 tonnes per day using crush/grind comminution, gravity concentration and CIL technology.
- Average life-of-mine metal recoveries of 93% for gold and 50% for silver.
- Minimum 4 year mine life based on mining plan depth to 200 metres below surface.
- Excellent potential to extend mine life as drilling has intersected significant mineralization to 260 metres down dip.
Key Technical Pre-tax and Post-tax Metrics
Key technical and base case pre-tax and post-tax metrics for Mato Bula and Da Tambuk are presented below:
| PARAMETER(3) |
|
Units |
Mato Bula |
Da Tambuk |
| Mine Plan |
|
Tonnes |
3,335,000 |
650,000 |
| Grade |
Gold |
g/t |
3 |
4.9 |
| |
Copper |
% |
0.26 |
|
| |
Silver |
g/t |
0.7 |
2.3 |
| Metal Recoveries |
Gold |
% |
86.4% |
93.0% |
| |
Copper |
% |
87.4% |
|
| |
Silver |
% |
50.0% |
50.0% |
| Recovered Metals |
Gold |
Ozs |
278,000 |
95,000 |
| |
Copper |
Lbs (x000) |
13,353 |
|
| |
Silver |
Ozs |
38,300 |
24,000 |
| |
Au Eq(4) |
Ozs |
305,000 |
95,000 |
| Capital Cost |
|
US$(x000) |
$ 54,200 |
$ 34,030 |
| Sustaining Capital |
|
US$(x000) |
$ 5,600 |
$ 8,030 |
| Operating Cost |
Site – C1 |
US$/tonne |
$ 47.53 |
$ 61.85 |
| Metal Prices |
|
| Gold Price |
US$/oz |
|
$ 1,325 |
$ 1,325 |
| Copper Price |
US$/lb |
|
$ 3.00 |
|
| Silver Price |
US$/oz |
|
$ 17.00 |
$ 17 |
| PRE-TAX |
|
| Cash Flow |
|
US$(x000) |
$ 139,710 |
$ 31,160 |
| NPV @8% |
|
US$(x000) |
$ 83,820 |
$ 20,670 |
| IRR |
|
% |
34.1% |
37.8% |
| POST-TAX |
|
| Cash Flow |
LOM |
US$ (x000) |
$ 97,700 |
$ 20,615 |
| NPV @8% |
|
US$ (x000) |
$ 56,660 |
$ 13,020 |
| IRR |
|
% |
28.4% |
28.6% |
| OTHER METRICS |
|
| Payback |
|
Years |
3.0 |
1.9 |
| C1 Op Cost |
|
US$/oz Au |
$ 412 |
$ 420 |
| AISC |
|
US$/oz Au |
$ 620 |
$ 642 |
Notes:
(2) Cash Flows presented are not discounted.
(3) Values may not reconcile to others disclosures within the news release due to rounding.
(4) Au Equivalent ozs = Au ozs + Cu lbs*0.0023 + Ag ozs *0.0128
As with all mining projects, a number of opportunities and risks exist that may affect the outcome of the project. Known opportunities and risks pertaining to both of the projects are identified immediately below, followed by a statement of opportunities and risks specific to each of the projects.
Opportunities for all Projects:
- Potential exists to optimize metal recoveries and reduce reagent consumptions in the processing circuits.
- Process equipment costs are based on North American supply and assessment of other equipment markets should be conducted to evaluate this cost reduction opportunity.
- The close proximity of the Mato Bula and Da Tambuk projects creates an opportunity for combining of project resources, such as power supply, road access, water sources, administration and technical departments, which could reduce costs. Certain general facilities and services may possibly be shared with the Terakimti project as well.
- Volatility of commodity prices.
- Unforeseeable escalation of capital or operating costs.
- Political stability, security and social opposition.
- Unforeseen future changes in host country regulations that may have a direct impact on production and economics of the projects including and not limited to environment aspects and taxes.
- Inherent geological risk and uncertainty.
- Sourcing of skilled employees for mining and processing plant operation/QAQC control.
- Metallurgical performance of the processing plant may be different than projections based on test work completed to date.
- Potential sources of water supply for operations must be confirmed and may vary from the assumptions made in the studies.
- The engineering assumptions and results presented in the PEA’s may vary from actual conditions.
- Abnormally high precipitation events during the wet season may cause flooding in the minesite areas and/or restrict access to the project sites.
Project Specific Opportunities and Risks — Mato Bula Opportunities:
- An updated resource estimate for Mato Bula is in development which will incorporate results of infill and exploration drilling completed in 2017. The results are expected to increase the level of confidence in the existing mineral resource estimates and identify additional areas of mineralization outside the current resource and mine plan.
- Drilling completed to date has identified significant gold copper and zinc mineralization extending laterally and to depth, which upon future technical and economic assessment may serve to extend the life of the proposed mining operation.
- The open pit scenario results in a high waste stripping ratio. Additional mine planning optimization, including assessment of underground mining may offer the potential to improve project economics.
- Due to the close locations of Mato Bula and Da Tambuk, opportunities may exist for combining access, infrastructure and certain processing facilities to the benefit of both projects.
- Unforeseeable geotechnical conditions requiring shallower pit slopes than expected.
- Higher strip ratios than planned.
- Metallurgical test work completed to date is preliminary. Additional metallurgical test work is required to better understand the metallurgical performance.
Project Specific Opportunities and Risks — Da Tambuk
Opportunities:
- An updated resource estimate for Da Tambuk is in development which will incorporate results of infill drilling completed in 2017. The results are expected to increase the level of confidence in the existing resource.
- Drilling completed to date has identified significant gold mineralization extending laterally and to at least 260 metres down dip depth, which upon future technical and economic assessment may serve to extend the life of the proposed mining operation.
- The mine plan is based predominantly on the use of cut and fill mining, with limited use of sublevel stoping. Improved understanding of ground conditions obtained in a dedicated geotechnical program, could provide justification for increased application of sublevel stoping, which would lower mining costs.
- Due to the close locations of Mato Bula and Da Tambuk, opportunities may exist for combining infrastructure and certain processing facilities to the benefit of both projects
- Insufficient availability of skilled underground miners. Skills development and training, as well as hiring of expatriate workers are expected to be a key aspect of the operations.
- Geotechnical conditions and rock quality parameters in the underground mine may be different than anticipated.
- Metallurgical test work completed to date is preliminary. Additional metallurgical test work is required to better understand the metallurgical performance.
- More underground dilution than planned.
- Excessive ground water ingress into the underground mine.
Metallurgy Overview
Metallurgical test work for the Mato Bula Gold Copper and Da Tambuk Gold projects has been completed by Blue Coast Research, an independent metallurgical laboratory in Parksville B.C. Canada.
Positive preliminary metallurgical results have been received from composites derived from key mineralized zones at Mato Bula, Silica Hill, and Da Tambuk. Conventional copper floatation was successful in producing encouraging saleable copper gold concentrates, with additional gold recovery realized from cyanidation of gold bearing flotation products.
The metallurgical work was conducted on three diamond drill hole composite samples derived from gold intervals at Mato Bula, Silica Hill, and Da Tambuk, and samples were tested at the Blue Coast Research metallurgical facility in Parksville, BC. Coarse reject diamond drill hole material was utilized from 6 drill holes at Da Tambuk (Da Tambuk composite), and 11 drill holes (7 for the Mato Bula Main composite and 4 for the Silica Hill composite) from Mato Bula. A total of 151 samples were utilized for the composites, with composite grades averaging 11.1g/t Au and 0.3% Cu(Silica Hill), 6.6g/t Au and 0.99% Cu(Mato Bula Main), and 9.5g/t Au and 0.2% Cu(Da Tambuk).
Metallurgy Results Summary
| Composite |
Flotation Performance |
Cyanidation |
Total |
| Cu Recovery, % |
Cu Grade, % |
Au Recovery, % |
Py Scav Au Rec, % |
Cu Clnr 1 Tail Au Rec, % |
Au Extraction, % |
Au Recovery, % |
| Da Tambuk |
72 |
24 |
57 |
4 |
16 |
Not Tested |
*97 |
| Silica Hill |
82 |
23 |
38 |
12 |
43 |
91 |
77 |
| Mato Bula |
93 |
27 |
83 |
8 |
3 |
52 |
85 |
The metallurgical work conducted to date is considered preliminary and more detailed testing will follow, to exploit opportunities that remain for more enhancements in overall metallurgical performance.
*Adyabo Agreement
Subject to a 2% N.S.R. For additional information about the Adyabo Agreement, please see Tigray Resources Inc. news release dated October 16, 2012.
Technical information included on this webpage was reviewed and approved by Andrew Lee Smith, P.Geo., the Company’s President and CEO, who is a Qualified Person as defined by NI 43-101.
Preliminary Economic Assessment (PEA) results have been reviewed and approved by the below noted Qualified Persons. The Qualified Persons have reviewed or verified the information for which they are individually responsible, including scientific, technical and economic information underlying the information or opinions contained herein.
Mark Horan, MSc. P.Eng. Senior Mine Engineer, “Independent Qualified Person”, under NI 43-101. Tetra Tech Resources Canada Inc.
Hassan Ghafari, P.Eng., Principal Metallurgist, “Independent Qualified Person”, under NI 43-101. Tetra Tech Resources Canada Inc.
David Thomas, P.Geo. Geologist, “Independent Qualified Person”, under NI 43-101. Fladgate Exploration Consulting Corporation.
