RESOLUTE Mining planned to spend $86m in project capital extending its Syama mine in Mali following completion of a pre-feasibility study.
Results from resource drilling at Tabakoroni, a satellite deposit of Syama that has already delivered 400,000 ounces of gold in the last three years, show potential for one million additional oz in an underground extension of the open pit mine at an average grade of 4.5 grams/ton.
Were Resolute to approve the project, it calculated incurring life of mine capital of $118m and project capital of $86m. Further drilling was required to grow the mineable resource and improve project economics. The life of mine of current underground discoveries at Tabakoroni to date was about four years, the firm said.
The development would extend the overall life of Syama. Mining underground at Tabakoroni would have all-in sustaining cost of $974/oz. “We expect our ongoing exploration success and feasibility studies will confirm a future underground operation at Tabakoroni,” said John Welborn, CEO of Resolute Mining.
“Exploration and evaluation of the Tabakoroni underground mine potential will continue during the remainder of 2020 and into 2021. The timeline on development is supported by our contemporaneous exploration efforts to define further surface oxide mineralisation,” he added. An updated Syama life of mine plan is to be published in the current quarter.
Resolute poured 217,946 oz in the first six months of its 2020 financial year of which Syama comprised some 56% with most of the balance sourced from its Mako gold mine in Senegal. The company has guided to full-year production of about 400,000 to 430,000 oz, slightly lower than previously guided owing to strike action at Syama.
The reduction in guidance was also influenced by the possibility of sanctions imposed on Mali by the Economic Community of West African States (ECOWAS) in the wake of a government ouster in the West African country during July.
Welborn said operations at Syama were largely unaffected by the political foment, but he acknowledged supply lines could be disrupted.
Shares in Resolute Mining gained 5.6% in London today. The company’s stock has been under pressure, falling 28% after registering a 10-month high in July.