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Siana Project Feasibility Upgrade

Monday, September 24th, 2007

Red 5 Limited announce formal discussions have commenced with pre-selected equity and debt/subordinated debt providers for the financing of Siana.
A detailed Information Memorandum, based on the Bankable Feasibility study, comprising technical, financial and risk assessments has been completed, using updated costs as of late August 2007.
Three immediate development options are reviewed, namely:
• open pit mine only
• open pit mine following by underground – “Base Case”
• earlier underground commencement-”Accelerated Case”
The capital cost to first gold pour (US$59.9M, including contingencies) is the same in each case, with the “Accelerated Case” clearly the superior alternative with average production in years 3 and 4 at 123,000 ounces per annum at US$257 per ounce.
Open Pit, Pit Case Case, Open Base Accelerated
Mine life(yrs) 4.5 12 10
Gold recovered(‘000oz) 290 717 717
Silver recovered(‘000oz) 665 1,336 1,336
Cash cost(US$/oz) 301 330 309
Total cost(US$/oz) 481 406 384
Pre-tax NPV*(US$M) 27 87 109
Pre-tax IRR(%) 29 38 49
*at US$650/oz Au, US$13/oz Ag, 8% discount rate
Importantly, whilst these parameters are the basis for financing discussions, three (non – mutually exclusive) enhancement cases are under parallel review.
The enhancement cases include:
– doubling the conservative underground mine rate to 600,00tpa (impact-maintaining production above 110,000 ounces per annum at lower cost),
– the inclusion of soft Mapawa ore (MPSA grant awaited, impact – an additional 20,000 ounces per annum at lower costs)
– and, the co-production of zinc concentrate from project year five (impact – by product credit reduces gold costs by up to US$100/0z).

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