Centamin announces West African exploration portfolio review results

The review, which commenced in 2H20, was designed to evaluate the potential development prospects of the portfolio, to rank each project and to define the pathway to realising value. The review was led by the company’s projects team, with the support of industry-leading consultants, including Lycopodium, Cube Consulting, Knight Piesold, and ECG Engineering.

Highlights

• The Doropo Project shows strong development potential with the completion of a positive preliminary economic assessment (PEA):
  • US$234 million post-tax net present value (NPV_5%) with a 21% internal rate of return (IRR) at US$1450/oz gold price.
  • US$487 million NPV_5% with a 33% IRR at consensus gold price per ounce of US$1829/oz (consensus).
  • Total development CAPEX of US$275 million, including a 15% contingency.
  • 13 year life of mine (LOM) based on the updated mineral resource estimate of 0.16 million oz (measured and indicated) and 5.21 million oz (inferred) of gold, with potential to further increase gold resources across the permits.
  • Average annual gold production of 207 800 oz for the first 5 years, averaging 150 956 oz over the LOM, for a total of 2 million oz produced at an average AISC of US$904/oz.
  • Board has approved US$14 million spend to advance the project to PFS stage by mid-2022.
• The ABC Project continues to deliver strong priority greenfield target generation along the 60 km Lolosso Gold Corridor (LGC) and the Board has approved a further US$3 million exploration programme for the Kona and FarakoNafana permits for the period to June 2022.
  • The PEA for the Batie West Project also delivers positive results:
  • US$63 million NPV5% with an 11% IRR at US$1450/oz gold price.
  • US$282 million NPV5% and a 26% IRR at consensus gold price.
  • Total development CAPEX of US$265 million, including a 15% contingency.
  • 8.5 year LOM based on the updated mineral resource estimate of 2.13 million oz (measured and indicated) and 0.1 million oz (inferred) of gold.
  • Average annual gold production averaging 139 994 oz over the LOM, for a total production of 1.2 million oz of gold at an average AISC of US$998/oz.
  • Board has approved the assessment of third-party development options as the project does not currently meet Centamin’s investment criteria.

Martin Horgan, CEO, commented: “Building a strong active growth pipeline is central to our strategy, while maintaining our capital allocation discipline. Today’s announcement of a positive preliminary economic study at Doropo and the exploration potential at the earlier stage ABC, demonstrate the quality and potential of our portfolio.

“The Batie West Project has potential to deliver a profitable mine, but not one that would currently meet our strict investment criteria. We are now initiating a review of development options for this asset.

“The Doropo Project is very exciting and is our priority growth target outside of Egypt, showing excellent potential to become Centamin’s second mine. Our highly experienced team has proven expertise at delivering successful gold projects in West Africa and will now commence the PFS, the results of which we look forward to announcing in mid-2022.”

Read the article online at: https://www.globalminingreview.com/exploration-development/27052021/centamin-announces-west-african-exploration-portfolio-review-results/