Thor Explorations, listed on the TSX‑V, has announced positive results for its independent Definitive Feasibility Study (DFS) on an open-pit operation at its 100 %-owned Segilola gold project, located approximately 120 km north east of Lagos in the Osun region of Nigeria. The company also reports that it has completed an independent Preliminary Economic Assessment (PEA), undertaken by Roscoe Postle Associates Inc, for a proposed supplemental Underground (UG) project at Segilola.
The DFS project comprises an open-pit mine and will include the construction of a new 625 000 tonnes per annum (t/a) processing plant. The DFS envisions a construction start date in Q2 2019 and an 18-month construction period with an initial five-year mine life. Pre-production capital is estimated at US$87 million.
The UG project considers an initial three-year underground operation which can be brought on stream during the open-pit mine life to supplement the open-pit ore with high grade underground production. The deposit remains open below the resources considered in the UG project.
The planned open pit is 1 600 m long, 140 m to 430 m wide and 55 m to 210 m deep and covers an area of 43 ha. Three pushbacks are planned, The proposed open-pit mining method utilises an excavator and truck fleet – 200-t excavators and 90-t dump trucks are envisaged – for both ore and waste. A large part of the mined material will require drill and blast.
Mining operations last for 45 months, with processing continuing for a further 19 months. Sizable stockpiles are created, allowing processing to continue for some time after mining ends. Mining in advance of the processing demand allows the ore supply to be smoothed out and also allows better grades to be processed earlier in the overall schedule.
A detailed mining schedule has been developed that requires minimal pre-stripping prior to plant commissioning. Production will initially commence from the high-grade northern pit, which outcrops at surface and – along with the Stage 2 pit which commences after nine months – will return an average head grade of approximately 6,3 g/t for the first 12 months of operation. Stage 3 commences in month 14 upon the completion of Stage 1, with a cut back of the southern wall of the Stage 2 pit to the final pit design.
The mining schedule incorporates stockpile management such that the processing plant feed grade is smoothed in order to optimise project cash flows.
Thor intends to engage an experienced mining contractor for the drill, blast, load and haul operations.
The processing plant will consist of a conventional crush, grind, gravity, and leach process, followed by carbon adsorption and then elution at high pressure and temperature, electrowinning and doré bar production by induction furnace. Leach tailings will be treated using the SO2/air process to destroy cyanide in the tailings, prior to their being pumped to the Tailings Management Facility (TMF). Water will be recovered and pumped back from the TMF to the processing plant for re-use in the process.
Life-of-mine average recovery is estimated to be 97 % resulting in life-of-mine production of 393 400 ounces.
For the open-pit project alone, the treatment of the ore will result in the production of approximately 625 000 t/a of tailings. The TMF will be located 1,3 km south-west of the process plant and will consist of a single valley-style embankment (North) and two small saddle dams (West and East).
Electrical power will be generated on site. During construction, a 400 kW/400 V and a 200 kW/400 V diesel generator will be installed by the contractor at the processing plant and at the camp.
The permanent main power supply for processing will be provided by seven 1,2 MW Compressed Natural Gas (CNG) generators, five of which will be on duty and two on stand-by. Emergency power will be provided by a 640 kW/400 V 50 Hz diesel-powered generator. Diesel and CNG will be delivered to site by road tanker.
Water for the plant will be provided from the plant feed water dam to the east of the processing plant, via a raw water pond. Water will be sourced as reclaimed water from the TMF as well as supplemented from the raw water system.
“We are excited to kick off the year with a robust Definitive Feasibility Study of the Segilola open-pit project and the Preliminary Economic Assessment of the Segilola Underground project,” commented Thor’s President and CEO, Segun Lawson.
“Both these studies confirm the robustness of Segilola and the significant upside potential that exists. The Feasibility Study confirms that the initial Segilola open pit is a high-margin gold project generating a robust post-tax IRR of 50 % with an excellent 1,4 year payback and an NPV5% of US$138 million with excellent leverage to gold price sensitivity. The Underground Preliminary Economic Assessment demonstrates an initial view of the potential of the deposit which remains open at depth whilst already potentially providing an additional NPV5% of US$35 million to the project.
“We are also pleased to announce that the company is in advanced discussions with project financiers and is proceeding with EPC turnkey documentation with its preferred EPC contractor, Norinco International (who assisted the company in the development of the Feasibility Study), with a view to commencing construction at Segilola in Q2-2019.”
He added that the Government of Nigeria was strongly promoting the growth of the mining industry and was offering a compelling fiscal incentive programme to support companies in the development of the country’s mineral resource sector.