West African gold producer Perseus Mining, listed on the ASX and TSX, has announced that a value engineering assessment (VEA) and the front-end engineering and design (FEED) study for the Yaouré gold project in Côte d’Ivoire has been completed. The studies confirm the cost estimates in Yaouré’s October 2017 Definitive Feasibility Study (DFS) that demonstrated the quality and strength of Yaouré.
The Yaouré DFS reported that the project is economically attractive with an IRR of 27 % with a 32-month payback period at a US$1 250 /ounce gold price; and technically robust with a 3,3 Mt/a plant with average annual gold production of 215 000 ounces at an AISC of US$734/oz for the first five years of production. It also confirmed it was readily financeable with a capital cost estimate of US$263 million and robust cash flows to service debt.
Independent consultant Lycopodium Minerals started the VEA and FEED Study in June 2018 and completed on time and on budget on 6 October 2018. Lycopodium is well qualified to undertake the studies having played a critical role in the successful engineering, procurement and construction of several high-profile West African gold mines in the last three years, including Perseus’s Sissingué gold mine that was successfully developed and commissioned in early 2018.
The scope of the VEA included the evaluation of opportunities to improve plant design and optimise the estimated capital expenditure.
Based on the FEED study, the total capital cost estimate for the development of Yaouré is US$264 million (including a contingency allowance of approximately 8 %) which is very close to the the DFS estimate.
The FEED study assumes that the process plant is developed under an Engineering, Procurement and Construction (EPC) contract. Based on current plans, first gold is expected to be produced at Yaouré in December 2020.
“The completion of the FEED study is an important milestone on the path to delivering Yaouré, our third gold mine,” comments Jeff Quartermaine, MD of Perseus. “The FEED study was completed on schedule and on budget and has delivered a satisfactory outcome with the capital cost less than 0,5 % greater than the cost originally estimated in the Yaouré DFS.
“With this estimate now in hand nwe can confidently advance the implementation of our finance plan which involves the deployment of a debt funding package to complement a combination of existing cash reserves and expected future cash flow from our two existing operations – both of which are performing in line with internal expectations and contributing to a steady build in our net cash reserves.”