GOLD
May 2014
MODERN MINING
33
the horizon
He added that Armadale’s in-country team
in the DRC was headed by Alain Van Landuyt,
a qualified chemical engineer and engineering
geologist based in Lubumbashi. “Alain knows
the Mpokoto area intimately and indeed he
was associated with the original gold discovery
and the subsequent exploration programmes.
He has an in-depth knowledge of how mining
works in Katanga and is very familiar with gov-
ernment structures and the Congolese Mines
Department.”
Geologically, the Mpokoto deposit is located
within a metavolcanic-sedimentary succes-
sion known as the Lukoshi formation. The
gold mineralisation is hosted within sheared
interlayered conglomeratic sandstones and
occurs as northwest to southeast striking and
moderately sheared intervals between clastic
meta-sedimentary rocks in the hanging wall
and meta-igneous rocks in the footwall.
The latest resource statement for Mpokoto
estimates the resource at 506 700 ounces of
gold from 11,12 Mt at 1,42 g/t Au at a cut-off
grade of 0,5 g/t. Some 75 % is in the indicated
category and the balance in the inferred. A fea-
ture of the estimate is that the oxide mineral
resource has increased by 500 % (from 20 500
ounces to 109 500 ounces) from the previous
estimate, a result due to a revised interpretation
of the weathering profile by Armadale’s geolo-
gists. Considerable exploration upside remains
at Mpokoto with the exploration target being
10 Mt to 15 Mt at 1,2 g/t to 1,5 g/t Au
Since
Modern Mining
spoke to Lewis
at the Indaba, the company has released a
Scoping Study on the project prepared by Bara
Consulting, whose principals are Jim Pooley
(well-known in South African mining circles)
and Pat Willis. The study demonstrates that
Mpokoto is a robust project with attractive
economic fundamentals even at a gold price
of US$1 100 an ounce. It analyses a Stage 1
operation based on the mining of shallow,
weathered oxide ores down to approximately
40 m depth and estimates the capex of Stage 1 at
US$20,2 million (assuming the use of a contract
miner). The post-tax NPV (at a discount rate of
8 % and a gold price of US$1 250 per ounce) is
put at US$33 million and the IRR at 141 %. The
payback period is estimated at just 20 months.
Stage I would be a 60 000 tonnes/month
operation designed to produce over 120 000
ounces of gold over an initial mine life of five
years. Mining would be undertaken using stan-
dard open-pit methods in two pits identified
along the strike of the orebody. The fact that
the ore is weathered means that it should be
free-dig down to about 40 m with no expensive
drill and blast being required. A total of 3,44 Mt
– at a run of mine grade of 1,28 g/t – will be
mined at a strip ratio of 4,53 tonnes of waste
to 1 tonne of ore. It is expected that the major-
ity of the ore will be oxide material although
small amounts of transition material will also
be extracted from the pits.
Given that the oxide ore is amenable to
gravity methods of separation, the proposed
0,72 Mt/a plant – which will be modular in
design – is based on a relatively simple pro-
cess route consisting of scrubbing followed by
various stages of gravity concentration prior
to leaching (CIL), elution and electrowinning
of gold. The estimated metallurgical recov-
ery from the oxide ore is expected to be 90 %
(falling to 70 % for the small quantities of tran-
sitional ore).
The project capital cost estimate includes
US$8,25 million for the plant, US$6,50 mil-
lion for the infrastructure, US$2 million for the
tailings dam and US$1,73 million for the min-
ing pre-strip. According to the study, the value
of the plant to be deployed is in the region of
US$10 million. Since a contract miner will be
used, this figure goes into the operating costs
of the project.
The cash operating cost is estimated at an
attractive US$649/ounce (excluding royalties)
over Stage 1.
With the conclusion of the Scoping Study,
Armadale is now embarking on a three-stage
programme to enhance Stage 1 and further
reduce risks. This programme will involve
additional exploration drilling to increase the
level of confidence in the mineral resource
and to identify additional resources; further
metallurgical testwork to enable more detailed
process design work to be undertaken; and a
more detailed geotechnical evaluation which
will include a detailed geotechnical drilling
programme at the pits identified and laboratory
testwork on the cores recovered.
The company – which recently submit-
ted a mining licence application to the DRC
authorities – also says it will launch a Stage 2
Scoping Study shortly. This will focus on the
less weathered ore below 30 m, which consti-
tutes the bulk of the mineralisation at Mpokoto
and which offers the prospect of Mpokoto even-
tually evolving into a significant mid-tier gold
mining operation.
Report by Arthur Tassell
The fact that the
ore is weathered
means that it
should be free-dig
down to about
40 mwith no
expensive drill
and blast being
required.
