An optimisation study into Crusader Resources’ flagship Borborema gold project in North Eastern Brazil has flagged a financially robust, long-life mine operation.
The study for the initial development of Borborema – prepared by TetraTech Mining and Minerals – is based on processing 2Mtpa of an initial 20Mt of ore for an initial 10-year period.
The initial development exploits the upper lens of the Borborema deposit, approximately half of the current ore reserve of 42Mt at 1.18g/t.
Based on the results, project Net Present Value (NPV) comes in at US$117.8M at an 8% discount rate. Internal rate of return of 31%, based on a gold price of US$1300/oz.
Gold production over ten years is anticipated to be 701,000oz with expected annual average production of around 70,000oz.
Cash cost of production is estimated at US$724/oz with all in sustaining cost of US$908/oz.
Pre‐production capital expenditure for contract mining scenario, a planned 2Mtpa capacity CIL plant and associated infrastructure projected to be US$93.4 million.
“The technical and financial review of our Borborema Gold Project has demonstrated the robust economics of the project and the potential to develop and operate a long-life gold mine,” Crusader Managing Director Marcus Engelbrecht said.
Our model supports development of an open pit mine with a low stripping ratio from surface and a conventional processing facility in a prospective and mine friendly district.
Based on these results and subject to funding, we intend to finalise a bankable feasibility study of the project during the year. I look forward to updating you on progress.”
A draft Feasibility Study (FS) on processing 4.2Mtpa was completed in 2012 by TetraTech Brazil but not released due to the falling gold price from April 2013. TetraTech has prepared an updated capital and operating cost estimate for the processing plant and infrastructure costs.
Borborema project in the Seridó area of the Borborema province consists of three mining leases covering a total area of 29km² including freehold title over the main prospect area.
Previously mined as a heap leach in the 1980’s, Crusader has completed more than 95,000m of drilling on an orebody which is tabular and mineable as an open pit.
Shares Crusader (ASX: CAS) closed the day at 6.5c.