RNS Scoping Study decoded21 Dec 2022 08:38
This Scoping Study for for the EXISTING Kilimapesa mine completed to underpin the Due Diligence undertaken by the recently confirmed non-dilutative funding of $10.5m from OCIM and the $3m from Philoro.
It is based on existing stated Kilimapesa metrics:
> 24koz/annum gold production from Mar-2023
> Upgrading Plants 1&2 from 500tpd to 1ktpd .. traditional mill, grind, gravity, CIL and tailing reprocessing
> Completion Plant 3 @35kt & Plant 4 @120kt capacity Heap Leach
> Updated MRE @Jul-22 of 705koz and 10-year LoM
> US$19,7m pre-production capital ... lots of this is already sunk capital since Aug-21 RTO (@Aug-21=$6.6m & $2.4m @Feb-22)
It now confirms several things:
> Solid economics with IRR of 114% and 2-year payback
> AISC @$1,095 ... previous guesstimate of $1,100 so not bad RM
> High project %IRR based on conservative economics with low POG of $1,650 & AISC $1,095
> Free Cashflow (FCF) ... so first 12 months FCF = $13.6m versus $12.6m stated in RNS implies $1m funding repayments or $41.6/ounce
>> Months 1-3 = ($1,700 -$1,095) *2,000oz =$1.2m/month
>> Months 4-12 = ($1,650 -$1,095) *2,000oz =$1.11m/month
>> Difference in Y1 FCF =($13.6m -$12.6m) / 24,000oz = $41.6/ounce "other non-AISC" costs
Importantly it also EXCLUDES:
> Expanded MRE based on extensive drilling campaign underway since Jun-22 expected to double resources and LoM with eventual target MRE of 2Moz (3 times current MRE)
In Summary:
IMHO this is a massive confidence boost in GCAT project economics and reconfirms the extensive DD completed as part of securing 2 big sources of non-dilutative funding secured against up to 20% of gold production.
Do not underestimate the positive effects of POG above $1,650 from month 3 which would accelerate on project IRR & payback in anon-linear fashion.
ATB APR
Sign In
Follow the stocks
