West Africa focused gold explorer and developer Azumah Resources Limited (ASX: AZM) reports that it is on target to complete the final phase of its Feasibility Study for the Wa Gold Project in Ghana by early-2020.
Azumah Managing Director, Stephen Stone, said with joint venture partner Ibaera Capital to sole fund the remaining US$2.25 million budget to complete the Feasibility Study, the partners have agreed that Ibaera may increase its direct interest in the Project by 4%, to a total of 46.5%. Azumah will retain a majority ownership of 53.5%.
To date the Wa Feasibility Study, based on open- pit optimisations and revenue estimates undertaken using a US$1,300/oz gold price, the 1.03 million ounce Ore Reserve Project is expected to have an estimated pre-tax, post-Government royalty net cash flow of US$270 million, NPV5% of US$177 million, IRR of 35% and an establishment capital pay-back period of 1.6 years.
At an assumed gold price of US$1,500/oz, and with all other inputs and assumptions unchanged, it is estimated that the Project’s pre-tax, post-Government royalty net cash flow could increase to US$448 million, the NPV5% to approximately US$309 million and the IRR to approximately 54%.
This excludes any benefits arising from the development of the Bepkong underground deposit for which a Scoping Study was recently completed. Using a gold price of US$1,300/oz, the Scoping Study estimated that an additional US$32 million pre-tax, post-Government royalty cash flow would be generated from a production target of 154,000oz contained gold (refer ASX release 5 August 2019).
“It’s a particularly exciting time right now for Azumah and the Wa Gold Project as we are on the home straight to deliver an economically robust, long-life gold mine development for Ghana’s Upper West region, fully supported by the local community and Ghanaian Government at all levels,” Mr Stone said.
“Assuming a gold price of US$1,500 per ounce and with all other inputs being the same as were used in the 30 January 2019 Feasibility Study progress update, the estimated pre-tax post-Government Royalty NPV and IRR could increase to approximately US$309 million and 54% respectively, illustrating the considerable gold price leverage that is inherent in the Project.”