African Gold Group Announces Robust Definitive Feasibility Study For Its 100,000 Ounce Per Year Kobada Gold Project With Renewable Energy Source
Toronto, Canada – June 17, 2020 – African Gold Group, Inc. (TSX-V: AGG) (“AGG” or the “Company”) is pleased to provide a National Instrument 43-101: Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant updated mineral resource and reserve estimate and results of the definitive feasibility study (“DFS”) for the Company`s Kobada Gold Project (the “Kobada Gold Project”) located in southern Mali.
- Average annual production of 100,000 ounces of gold per annum for the first 5 years of operation.
- Total gold production of 728,654 ounces over 9.4 years life of mine, based on current reserves.
- Average total operating cash costs US$704/oz for the Life of Mine (“LOM”).
- LOM All-In Sustaining Cost (“AISC”) of US$782/oz.
- Pre-tax NPV5% of US$283.9 million with an IRR of 45.5% and a post-tax NPV5% of $226 million with an IRR of 41.1% at US$1,530/oz gold.
- Kobada Gold Project capital expenditure of US$125 million (plus a contingency of US$11 million).
- Total project capital expenditure payback of 3.82 years from start of production, based on a US$1,530 per ounce gold price.
- Total project net cash flows after tax and capital expenditure of US$327 million.
- A separate standalone 11 MW Hybrid Solar/Thermal Power Plant to supply power to the Kobada Gold Project will be funded by an independent power producer with power purchased at a very competitive kWh rate and significantly reduced greenhouse gas emissions.
- Total proven and probable mineral reserve has increased to 754,800 ounces of gold, a 48% increase from the mineral reserve estimate in the 2016 feasibility study of the Company with respect to the Kobada Gold Project (the “2016 Feasibility Study”).
- Pit constrained mineral resource estimate in the inferred category increased to 1,138,810 ounces of gold with an average grade of 1.33 g/t Au, representing an 11.2% increase in resource and 37% increase in average grade.
- High measured and indicated resource to reserve conversion rate of 84%.
- Updated 2020 mineral reserve estimate represents, an increase of 48% in ounces and 114% in tonnes compared with the 2016 Feasibility Study.
- Further potential remains to significantly increase the resource and reserve along strike and depth at the Kobada Gold Project.
Kobada Gold Project Overview
The Kobada Gold Project is located in southern Mali, approximately 125 km in a straight-line south-southwest of the capital city Bamako, and is situated adjacent to the Niger River and the international border with Guinea.
The Kobada Gold Project is based on one mining exploitation permit of 136 km2 and one exploration permit of 80 km2 which are wholly owned by AGG Mali SARL, the local Malian Company, 100% owned subsidiary of African Gold Group.
AGG completed 116,870 metres of diamond, reverse circulation, air core and auger drilling between 2005 and 2012. In 2015, AGG completed a further 1,398 metres of diamond core drilling over 136 diamond drill holes. The current AGG exploration re-commenced in August 2019 and an additional 11,428 metres of diamond core have been drilled.
Gold mineralization is present in the laterite, saprolite, and quartz veins that comprise the project, and in the sulphidic hard rock underneath. There are also placer style deposits in the region.