Pasofino Gold announces Dugbe Gold Project feasibility study progress

Highlights

The FS is now scheduled to complete in April 2022, at that time the company will, subject to satisfying certain other conditions in the earn-in agreement, earn a 49% interest in the project (prior to the issuance of the government of Liberia's 10% carried interest). Following the company earning into the project, the company intends, subject to the receipt of all required approvals, including approval of the TSX Venture Exchange, to exercise its put right to acquire 100% of the project (prior to the issuance of the government of Liberia's 10% carried interest) by converting Hummingbird's 51% interest in the project into a 51% shareholding interest in Pasofino. The below highlights are preliminary in nature and there is no assurance that the final FS will reflect these preliminary developments.

• Confidence achieved with the FS confirmed gold recoveries of between 85% and 91%, depending on whether a straight carbon-in-leach (CIL) or CIL with flotation circuit is selected respectively. Current trade-offs are aimed at selection of the optimal process to achieve the best financial outcomes.
• Open pittable resources include 57 million t material, grading 1.58 g/t with 2.88 million oz gold (Au). Pasofino intends to prioritise the extraction of this higher-grade component of the overall resource (75 million t at 1.37g/t in measured and indicated) in order to support a higher head grade during early years.
• Favourable results from the on- site geotechnical work should allow steeper pit slopes to be developed, these should translate to lower strip-ratios.
• Mining dilution has decreased to an average of 8.7% from 10% in the 2021 PEA.
• Reduced energy costs from US$0.212/kWh to US$0.172/kWh. This anticipated benefit expected to result in lower energy cost/tonne treated.
• All other disciplines are well advanced – the FS is + 70% complete.
• ESIA scope approved by the Liberian Environmental Protection Agency (EPA). Exhaustive biodiversity field work has identified areas of lower sensitivity enabling the location of key project infrastructure, reducing environmental impact. Continuous community engagement has been undertaken throughout the development of the project.

Ian Stalker, CEO, commented: “It is pleasing to report that the ongoing FS has improved our understanding of the technical basis of the project, and we are convinced this will enable the company to turn these to account. To date, improvements have been identified in the following key areas; mineral resource, metallurgical process, mine design, and infrastructure. We are on track to earn our initial 49% interest in the project and thereafter exercise our right (the put right) to acquire Hummingbird's 51% interest in the project in order for Pasofino to consolidate the ownership of the project. Pursuant to the terms of its earn-in agreement with Hummingbird Resources plc, upon earning its initial interest in the project, Pasofino has the right, subject to certain protections and the receipt of all required approvals, to convert Hummingbird's 51% controlling interest in the project into a 51%shareholding interest in Pasofino.”

Key FS progress areas

Metallurgy

This test work is nearing completion. Four flowsheets (excluding the base case) have been developed, allowing high-level CAPEX and OPEX numbers to be derived and compared. The two preferred options currently under consideration consist of a conventional CIL and CIL with flotation, regrinding and intensive cyanidation of the flotation concentrate. These have returned recoveries of between 85% and 91%.

Mineral resource estimate

1 million oz more measured and indicated gold. Updated mineral resource estimates (MRE) for both the Dugbe F and Tuzon deposits are larger and have a higher-grade component. Using a 0.5 g/t Au cut-off grade, there is a 1 million oz increase of gold in the measured and indicated category: the MRE is now 75.2 million t grading 1.37 g/t Au containing 3.31 million oz Au. The MRE includes higher-grade areas – using a 1 g/t Au cut-off grade, the measured and indicated MRE is 2.88 million oz Au contained in 56.6 million t grading 1.58 g/t Au. The mine design work will seek to develop the higher-grade and stockpile lower-grade material to improve the head grade over the early years.

Geotechnical results from testwork likely to support lowered strip ratio

The MRE block models for Dugbe F and Tuzon are being setup in NPV Scheduler to complete the optimisation work prior to developing the mine design. The geotechnical workstream has confirmed inter-ramp slope angles of 55 – 58° for Tuzon and 50 – 58° for Dugbe F. These steep angles reflect the highly competent nature of the rock mass and will enable stripping ratios to be reduced and so should have a positive impact on economics. The PEA assumed a less steep inter-ramp angle of 55°.

Mining dilution will be lower

Using mineable shape optimisation (MSO) software, DRA has established that dilution for Tuzon will be lower than the PEA. The dilution is expected to be 6.9% for Tuzon and 13% for Dugbe F, which gives a project LOM average of 8.7% vs the 10% used in the PEA.

Lower energy costs

The project is currently investigating the use of LNG power with significant photo-voltaic (PV) penetration. This has the potential to reduce the power costs (relative to the HFO power option considered in the PEA) by approximately 19% (to US$0.172/kWh). Greenhouse gas emissions are expected to be reduced by 38% relative to the PEA.

Other FS work in progress

Mechanical equipment list (MEL) is currently being revised to match the CIL and CIL with floatation process flow sheets. Scope of Work narratives for major equipment and long lead items are in preparation for a formal enquiry. The first of the major equipment item packages have been issued into the market in early January 2022, to ensure that lead times are established and that the tender validity will still be applicable by the estimate submission date and Study completion. Plant areas are being updated and frozen with the Block Plan updated to reflect the agreed basis of design.

Design work is underway for the tailings storage facility (TSF), return/storm water dam, underdrains, drain outlets, and liner. The design team is currently maximising the tailings volume deposited in the north part of TSF to defer construction of the south valley to later in the project. The layout and orientation of the TSF is being refined to allow phased development of the TSF and deferral of CAPEX to later in the project. The team is also reducing the TSF footprint to potentially reduce environmental impact.

A trade-off study of power generation on site versus Greenville was updated with revised road freight costs for LNG fuel, with a conclusion that power should be generated on site. Optimisation of the solar component of the power generation package is now underway.

Mine services area, accommodation and support infrastructure have been laid out in a block plan and are undergoing refinement. The layout will be finalised when final production related elements have been determined. Functional specifications for the accommodation and some support infrastructure have been issued.

Preliminary design work for the main access road from the Port of Greenville to site has been completed and issued for comment/feedback on the portion of the road from Plazon Junction to site. A preliminary structural assessment of six existing road bridges, between the Port of Greenville and Plazon Junction, which will be subject to future loads from the transport of heavy plant and equipment, is complete, with further work identified to modify some crossings for construction loads.

The Greenville Port scope of work report was compiled to detail the study work required to upgrade the Port of Greenville to facilitate construction activities and mine operations.

An enquiry scope of work document for the logistics service provider (LSP) has been drafted, reviewed, and issued for comment. The bids include a schedule of rates from various ports of departure and various delivery options. Discussions and clarifications are ongoing to establish the optimal logistics route and costing for the project.

Additional detail has been added to the labour schedule and the calculations are almost complete and are advanced enough to estimate the expected housing and support infrastructure for labour. A final estimate for the study will take place when the production schedule, labour availability & cost, and other engineering elements have been determined.

The environmental social impact assessment (ESIA) scope has been approved by the Environmental Protection Agency (EPA). The draft project description is under review. A large team of specialists have completed an intensive biodiversity campaign covering the project site and key surrounding ecosystems. Two specialist reports have been completed (traffic and soils) and three more are nearing finalisation (noise, air quality, community).

Short-term static testwork results for waste rock sample intervals received and a sub-set of samples have been selected and submitted for mineralogical assessment. The draft waste rock dump model has been generated based upon the short term static testwork results and is currently undergoing review. Short-term static testwork results for the run-of-mine (ROM) ore feed sample have been received and are being incorporated into the ROM stockpile modelling.

Remaining project work includes the following:

• Mine optimisation and design, and contractor inputs.
• Final plant flowsheet determination and plant design.
• Infrastructure finalisation including TSF design, port facilities and main access road.
• Labour schedule finalisation.
• ESIA impact analysis work and report reparation.
• Requests for quotes and costing.
• Risk review.
• Financial modelling.
• Final report preparation.

Read the article online at: https://www.globalminingreview.com/exploration-development/08022022/pasofino-gold-announces-dugbe-gold-project-feasibility-study-progress/