Australian gold mining company Troy Resources on Monday reported positive results from an updated prefeasibility study that considered only an open-pit mining scenario at its Karouni project in Region Seven providing a faster route to production as opposed to including an underground mine. “We are very pleased with the results of the study which shows that Karouni is an economically robust project with a payback of just over a year,” CEO Paul Benson said. The company is fast tracking development of Karouni and expects first production before the end of fiscal year 2015. In April, the company had announced that in order to fast track development of the project and to enable production to be brought forward to the first half of 2015, the initial pre-feasibility study would consider only the open pits and a pre-feasibility study for the underground would be completed at a later date.
The Australian company’s subsidiary Troy Resources Guyana Limited had proposed a medium-scale gold mine designed to produce up to 110,000 ounces of gold per annum based on an average overall recovery of 92% at the Black Water Creek, Kaburi Area, in Region Seven. The mine will be focused on the recovery of ore for processing from Smarts and Hicks gold deposits. The project components include an open cut mine, processing plant, tailings storage facility, mine site accommodation and additional infrastructure required to recover and to process ore for the recovery of gold.
Development and operation of the mine site will involve several distinct phases including the relocation and resettlement of the community at 14 Mile Issano, construction of mine site infrastructure and upgrading of the mine site access road, construction of a process plant and the staged construction of a tailings storage facility.
The latest study assumed a base case gold price of US$1250 per ounce of gold, which resulted in a higher net present value at a 6% discount rate of US$72-million, and an after-tax internal rate of return (IRR) of 50.2%. The US$84.6 million in capital expenditure would be paid back in 1.2 years, according to the study. It estimated a three-year open-pit mine life producing on average 101 000 ounces of gold and 104 400 ounces of gold in the first year of operations. “Necessary government approvals are in the process of being finalised. All required documentation has been submitted to the Government and is following the Government’s internal process. The Minerals Agreement, which is the definitive agreement allowing for project exploitation, tax and royalty issues, importation allowances, physical and economic parameters for the extraction and sale of minerals, is in the final stages of its approval process. It is expected that all approvals will be in hand within the September quarter to allow mine and processing construction to continue uninterrupted,” the company said.
The Environmental and Social Impact Assessment for the project was recently completed.