mining news
7
08.13
African Consolidated Resources (ACR), the
AIM-listed resources and development com-
pany, has announced the successful comple-
tion of the Definitive Feasibility Study (DFS)
on the initial phase of development at the
3,2 million ounce Pickstone Peerless gold
project in Zimbabwe .
The focus of the DFS has been to keep the
capital expenditure intensity to a minimum
whilst maximising the near term cash flow.
To this end, it was decided that only the ox-
ide cap would be considered in Phase 1 at
a production rate of 20 kt/month, as part of
the two-phased strategy to exploit the previ-
ously reported open-pit mineral inventory of
813 koz (at 5,1 g/t).
The DFS therefore represents a subset of
the larger project and allows ACR to declare a
maiden reserve of 136 000 ounces at 2,06 g/t
based on a gold price of US$1 500/oz and a
cut off grade of 0,4 g/t. Phase 1 will gener-
ate in excess of US$50 million cash over a
five-year period on an EBITDA less tax basis
despite the lower grades that relate to the ox-
ide cap and the higher concomitant unit costs
of production. This strategy provides ACR a
way to generate organic cash flows to rein-
vest in the development of the Phase 2 (50 kt/
month) operation.
ACR has been able to maximise early pro-
jected cash flows by decoupling the open-
pit mining from the plant feed by building
stockpiles in advance of milling. This strategy
enables the grade reporting to the plant to
be managed thereby decoupling the in situ
average grade from the average plant feed
grade that will contribute to the funding and
development of the Phase 2 expansion. The
projected effect of this in the first five years
of the mine is significant – engineering an
estimated average 3,04 g/t feed grade to the
plant from an estimated 2,10 g/t in situ grade.
The reduction in capital intensity has been
largely due to utilising existing infrastructure
and focusing on the oxides portion so as not
to incur additional capital in the plant to treat
the sulphides. Additional capital would have
been required for flotation and increased
leaching facilities and this has been avoided.
Phase 2 is now being considered at a pre-
feasibility level of study, and it is ACR’s inten-
tion to have this study complete in Septem-
ber/October 2013 together with a conceptual
study of underground mining which would
represent Phase 3. The significance of the
expanded Phase 2 operation is that the high-
er grade sulphides can be liberated, whilst
the increased rate of production will realise
economies of scale. The combined effect of
these two considerations will reduce both the
Feasibility study on Pickstone-Peerless completed
Mini-ball mills of the pilot plant erected at the Pickstone-Peerless site (photo: ACR).
Location of Pickstone-Peerless’s oxide pits.
US$/oz and the US$/tonne cost of produc-
tion, thus significantly improving the project
margin.
Basil Read Matomo (BRM), a division of
Basil Read, was appointed as the lead con-
tractor for the DFS and will remain for the
prefeasibility study for Phase 2. PDNA Minx-
con, a South African based minerals and min-
ing consultancy company, was retained to
undertake the mine design, mine scheduling
and financial valuation of the DFS.
ACR’s Chief Executive, Craig Hutton, com-
mented: “The completion of this DFS on
time and on budget represents a significant
achievement in the transformation of ACR
from an exploration company to a mining
company.” He added that scheduling for im-
plementation of Phase 1 remains on track for
first production of gold in June 2014.
