BRITISH mining firm Ariana Resources says its Dokwe Gold Project in Zimbabwe could generate more than US$4,5 billion in gross gold sales over its lifespan.
The company is expecting to recover its peak funding requirement within a year of production.
Ariana’s projection followed the release of a pre-feasibility study earlier this week, which increased the project’s mineral resource estimate by 13% to 1,598 million ounces of gold and significantly expanded the scale of the planned operation.
As a result, the project’s funding requirement has risen to US$163,9 million from an earlier estimate of US$82 million.
Under the revised plans, the mine is expected to operate for about 20 years, producing an estimated 1,06 million ounces of gold over its lifespan. Annual output is projected at between 80 000 ounces and 100 000 ounces, potentially placing Dokwe among Zimbabwe’s top gold-producing mines.
“Sustaining capital costs of US$33,1 million are to be expensed over the approximate 20-year mine life. Life of project (LoP) operating costs for the project were calculated to be US$890,5 million for mining operations, US$1 027,3 million for processing operations, US$152,6 million for general and administration costs and US$301,5 million for refining and royalties,” Ariana said.
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“Mining and G&A costs are inclusive of capitalised pre-production expenses. Gross gold sales over the LoP total US$4 515,9 million, resulting in an overall cashflow of US$1 993,5 million, generating a pre-tax net present value (NPV) of US$1 056,0 million at a discount rate of 10%; post-tax NPV10 of US$740 million.”
According to the miner, the project is expected to achieve payback about one year after processing operations begin and has an estimated internal rate of return of 92%.
The operating costs include mining, processing, and mine-site expenses incurred during the life-of-mine mining and processing phases.
“The AISC includes mining, processing and G&A OPEX (mine site costs) during the LoM (life of mine) mining and processing phase, plus sustaining and growth capital costs and royalties/refining costs (off-site costs),” Ariana said.
Since 2004, the Dokwe project area has undergone several phases of drilling covering more than 53 000 metres, alongside three mineral resource estimates and a series of geotechnical and metallurgical studies.