AFRICAN Consolidated Resources has had a hefty value attributed to a second possible open pit mine at the Pickstone-Peerless Gold project in Zimbabwe.
A PEA study, which focused solely on an open-pit operation on the Pickstone sheer zone, confirmed a high grade open pit would be able to produce at a rate of 50 000 tonnes per month and a mined grade of 4,6 grammes per tonne.
At 2 g/t per tonne cut-off, the pit was estimated to produce an estimated 720 000 gold ounces over a life of mine of 10 years, which rose to 850 000 ounces over 16 years applying a 1,0 g/t cut-off.
Consultant Minxcon said the pit will require upfront expenditure of $60 million, but will yield an NPV of approximately $300 million, a rate of return of 128% and a payback of 18 months at a 2,0 g/t cut-off.
The gold price assumed is $/oz 1,500 with an estimated operating cost of approximately $ 450/oz.
The PEA considered 26 scaled options ranging from 25ktpm to 100ktpm production, with the 50ktpm option used on the basis of its operating sustainability and capital efficiency.
The study is the first component of the feasibility study commissioned for the whole operation at the beginning of October 2012 and did not include anything for Pickstone underground nor the Peerless sheer zone open-pit and/or underground potential.
A scoping study published in November showed a first pit at Pickstone could be underway nine to 12 months after receiving funding and would produce 30 000 ounces a year over six years at an estimated cash cost of less than $350 an ounce.
It would mine to a depth of 40 metres and at an average grade of 3,8 grammes per tonne with a cut off of 1 gramme. The capital costs for this mine were put at $10 million.