Mt Kare Gold/Silver Project Pre-Feasibility Study (PFS) – 1 Million ounces Gold Production & 8 Million ounces Silver
Sydney, Oct 2, 2012 AEST (ABN Newswire) - Gold development company Indochine Mining Limited (
ASX:IDC) is pleased to announce the following positive results from the Preliminary Feasibility Study ("PFS") on the Mt Kare Gold/Silver Project in Papua New Guinea (PNG) within exploration lease EL 1093, held by its wholly-owned PNG subsidiary Summit Development Limited.
PFS Highlights
- Identification of positive factors, sufficient to warrant the commencement of a Bankable Feasibility Study (BFS), subject to funding.
- Forecast total production is 1 million ounces gold and 8 million ounces silver over 8 years.
- This scenario generates a Cumulative Revenue of US$2 Billion with Operating Costs of US$ 800 million generating a pre-tax internal rate of return of 28% and payback period of 4 years based on US$1650/oz gold price.
- The estimated establishment capital cost to cover mine construction to first production is US$218 million, which includes the processing plant (US$96 million), a power plant (US$15 million), and associated infrastructure, including a tailings storage facility (TSF).
- There is significant potential to optimise the project and reduce the estimated capital costs. For example, in the PFS, an owner operated mining fleet is estimated to cost $44 million. However, it could be leased to reduce the initial capital outlay and improve the IRR. Similarly, mine operations could be provided on a contract basis and the power plant also may be leased.
- Key opportunities exist to improve project economics and extend mine life through a range of resource expansion, mine scheduling, grade optimisation, processing flow-sheet optimisation and other initiatives to be undertaken in a Bankable Feasibility Study (BFS) following PNG regulatory approvals of the PFS.
- No substantial legislative, environmental or social impediments for project development have been identified to date, with general local community support having been received.
- The December 2011 JORC Mineral Resource of 28.3 million tonnes at 1.9g/t gold, 22.5g/t silver for 1.8 million ounces gold and 20 million ounces silver, with a higher grade zone of 700,000 ounces gold at 3.7g/t gold, has been used as a basis for the PFS. Of this, 15 million tonnes were incorporated into the mine and process schedule in the PFS.
- Results from an additional 58 diamond drill holes (7,748 metres), completed by the Company for metallurgical testing and assaying, is anticipated to enhance the resource quality. Assay results are pending on 45 drillholes. An improved JORC mineral resource estimation will be announced when all assays are received and this will form the basis of the BFS to follow.
- Planned exploration drilling outside of known mineralised zones, and to extend identified high grade zones, is anticipated to extend the potential mineral inventory.
- The preferred processing route is a crushing circuit targeted at 1.7 Mtpa, with Phase 1 of the Project to use CIL circuit leach tanks for treatment of the nearer surface "CIL amenable" resource in years 1-4. This is followed by a Phase 2 plant upgrade introducing sulphide flotation and treatment of the flotation concentrate for years 4-8 sourced from the WRZ and BZ "non CIL-amenable resources".
- Production is estimated to commence in 2015 with modelled output of 100,000-160,000 ounces of gold per annum and 700,000 - 1,100,000 ounces silver, with an average life of mine strip ratio of 3.8.
- Overall gold recoveries of 83-88% for both CIL and flotation processing routes.
- Fully contained land-based Tailings Storage Facility (TSF) located on site in a valley that is adjacent to the process plant location to last the Life-of-Mine (LOM), which is subject to PNG government approval.
- On schedule for lodgement of a mining licence application by late 2013 following the completion of the BFS.
Indochine's CEO, Stephen Promnitz, commented "the PFS study has demonstrated the economic strength of the Mt Kare project, and with further significant upside achievable through optimisation and resource expansion should deliver potentially one of PNG's next gold mines."
"The Company has delivered on its commitment to regulators to complete the Mt Kare project to pre-feasibility stage. Now the focus is to deliver a bankable feasibility study and move into production thereafter. In the near-term, the company will continue to release assay results from its latest drilling programme, which is expected to lead to a resource upgrade."
For the full Indochine Mining announcement and all data, please click the link below:
http://media.abnnewswire.net/media/en/docs/ASX-IDC-697866.pdf
Contact
Indochine Mining Limited
T: +61-2-8246-7007
F: +61-2-8246-7005
WWW: www.indochinemining.com
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