Estimate Of After-Tax NPV Of US$380 Million
Roxgold Inc. (TSX: ROXG) has obtained positive results from the Feasibility Study and Mineral Reserve estimate for the high-grade Séguéla Gold Project in Côte d’Ivoire.
The Feasibility Study confirms robust economics for the development of an open-pit mining operation at Séguéla, targeting a series of open-pit mines at Antenna, Koula, Ancien, Agouti and Boulder deposits that will feed a central gold processing facility.
Roxgold intends to make a formal construction decision upon completion of a debt financing package and signed mining convention with the Government of Côte d’Ivoire.
Key Highlights of the Feasibility Study:
- The Feasibility Study considers an operation with an initial nameplate of 1.25 million tonnes per annum (Mtpa) and mine life of 9 years.
- LOM after-tax net cash flow of US$536 million at a gold price of US$1,600 per ounce.
- Robust economics with after-tax net present value (NPV) of US$380 million.
Roxgold has produced an initial Proven and Probable Mineral Reserve estimate of 12.1 million tonnes grading 2.8 g/t Au totalling 1.1 Moz Au – positioning Séguéla among the highest-grade open pit gold projects globally.
This has led to
- Average annual gold production of 133,000 ounces over the first six years of production, with an estimated production peak of 151,000 ounces in year four.
- Life of Mine (LOM) gold production of 1.03 million ounces of gold with average annual production of 120,000 ounces.
- Processing plant throughput rate will be expanded by approximately 25% to 1.57Mtpa in year three, through a series of optimisation and debottlenecking measures with minimal capital requirements.
- Average cash costs per ounce produced of US$567 per ounce over the LOM, including a cash cost of US$528 per ounce over the first six years of production.
- Average All-In Sustaining Costs (AISC) of US$832 per ounce over the LOM, including an AISC of US$797 per ounce over the first six years of production.
The project has anestimated pre-production capital cost of US$142 million.
Early stage construction activities have commenced with site access road and camp construction underway. Full construction will commence following a formal construction decision and completion of debt financing.
President and CEO, John Dorward, saidRoxgold is positioned well to expand the Séguéla Project with potential for underground expansion at Koula and Ancien snd significant exploration prospectivity with the recent discovery of the Sunbird prospect and over 20 prospective targets yet to be tested.
“We are pleased to share with the market the results of our Feasibility Study on Séguéla which underscores the substantial value accretion that this project will bring to Roxgold and its shareholders,” Mr Dorward said.
“Séguéla has rapidly become a cornerstone asset for Roxgold, with the potential to more than double the company’s production profile within a short time frame. We expect to be able to deliver this without the need for equity dilution.
“The value creation at Séguéla has been remarkable and we still believe there is significant upside through further optimisation opportunities and the exploration potential at the project. We acquired Séguéla in 2019 for US$20 million in cash, and through the hard work of our exploration and project teams, we have been able to generate exceptional prospective project economics with an after-tax NPV attributable to Roxgold of US$380 million and an IRR of 49% at a gold price of US$1,600/oz.
“In the first six years of operation, the project will produce an average of 133,000 ounces of gold per year at an AISC of US$797 per ounce generating an average annual EBITDA of $130 million per year.
“Importantly, the Séguéla project as outlined today is just a snapshot in time of the potential value of the project. Our drill programmes continue to have success delineating mineralization down plunge at Ancien and Koula, building confidence in the potential of high-grade underground scenarios from these deposits.
“Further, we continue to see the significant exploration prospectivity of Séguéla with the recent announcement of the discovery of Sunbird, which has the potential to be another high-grade prospect within close proximity to our planned operations and infrastructure.
“As we continue to drill and define additional targets on our property package, our understanding of the drivers of the mineralisation throughout the property continues to improve, increasing the likelihood of additional successes to come from the 20 plus targets on the property yet to be tested. It is our belief that, with continued drilling success, there is the potential to continue to add significant production ounces and value to Séguéla.”
