BRITISH MINER Ariana Resources has expanded the scale and value of its Dokwe Gold Project in Zimbabwe following a pre-feasibility study that increased its mineral resource estimate by 13% and strengthened the project’s long-term production outlook.
The revised study has lifted Dokwe’s mineral resource estimate to 1,598 million ounces of gold, up from 1,416 million ounces, while also raising the pre-production capital requirement to about US$164 million.
Based on the current gold price of US$4 519,69 per ounce, the updated resource estimate translates into an in-situ value of nearly US$7,2 billion, up from approximately US$6,4 billion previously.
Ariana Resources said the increase reinforces Dokwe as a long-life, low-cost operation with strong production potential across two development phases.
“Mineral resource estimate increased by 13% to 1,6Moz (million ounces) of gold at Dokwe North and Dokwe Central, at a 0,2 g/t (grammes per tonne) Au (gold) cut-off,” Ariana said in a statement.
The pre-feasibility study also revealed that the project is expected to operate for a long time and generate strong profits without needing extremely high upfront investment costs.
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“Long-life, low capital cost, high margin gold production occurring in two phases: 12- year initial open-pit Life of Mine (LoM) phase at c.80 000oz p.a. (per annum) and 8-year stockpile processing phase at c.20 000oz p.a. for total Life of Project (LoP) production of 1,06Moz and peak production of 100 000oz p.a,” the miner said.
Over the full project lifespan, total production is projected at 1,06 million ounces, with peak annual output reaching up to 100 000 ounces.
Capital expenditure for site establishment and construction is estimated at US$117,4 million, with an additional US$46,5 million in pre-production mining costs, bringing total peak funding requirements to US$163,9 million.
“Sustaining capital costs of US$33.1m are to be expensed over the approximate 20-year mine life.”
Ariana managing director Kerim Sener said the results mark a major milestone as the company progresses toward its definitive feasibility study, expected in the first quarter of next year.
“With the total ore reserve significantly increasing by 42% to 1,13Moz, this is a genuinely outstanding result and sets the scene for a significantly expanded mining and processing rate, which yields an NPV (net present value) 10 in excess of US$1 billion,” Sener said.
He said the updated study opens opportunities to further optimise mining and processing methods to improve project value.
“In particular, refinements to the mining fleet configuration and processing route may further improve the NPV and will be examined further in our ongoing studies,” Sener said.
The company said it is ahead of schedule with a three-rig, 3 700-metre diamond drilling programme at Dokwe, supported by Xinhai Mining Group, to provide additional geotechnical and metallurgical data for the definitive feasibility study.