AN updated feasibility study for stage 1 of the Bau Gold Project details significantly improved financial data from an already promising project. The updates relate to the operating cost per tonne, all-in sustaining cost (AISC) per tonne, all-in cost per ounce, NPV and IRR.
Examining a core sample from Besra’s Bau Gold Project in East Malaysia.
The company says only these figures have been updated in the feasibility study and all other figures or assumptions remain the same, in particular the reserves and production target. Most notably NPV has increased to $91.4 million from $48.3 million and IRR to 38% from 25.4%.
Other changes include operating cost per tonne of ore decreasing from $36.84 to $31.38, AISC per ounce decreasing from $1159.18 to $1030.61 and all-in cost per ounce, including resale, decreasing from $1101.71 to $973.14.
Besra’s CEO John Seton says, “Since the January release of our feasibility study for stage 1, we have updated some of the economic indicators to reflect firmer quotes from refineries for a concentrate off-take agreement, as well as correction of one calculation reference.”
Total capital remains at $134.878 million, initial capital remains at almost $92.120 million, ongoing capital remains at more than $42.758 million and the gold price used in the estimations remains at $1300 per ounce.
“As we continue to refine the outcomes of our feasibility study, a number of extrapolations have been carried out on scenarios utilizing presently known resources which are NPV-accretive well beyond stage 1 of the project, John Seton says.
“Alternative exploration-based scenarios also indicate meaningfully improved economics from potential expansion of the initial Jugan Hill resource utilizing previously identified anomalies towards Jugan West. Delineation of such additional resources around Jugan Hill will drive our exploration program in the immediate future.”
Bau is in the rich Kalimantan metalliferous belt on the island of Borneo and has a long history of gold mining. Itinerant Chinese miners first began working the area in the 1800s, and modern techniques made it production-worthy again with the rising price of gold in the 1970s. When the value of gold went the other direction in the 90s, mining operations at Bau Goldfield ended.
To date, it’s estimated that more than 3 million ounces of gold have been mined at Bau. Yet previous operations never exceeded 60 metres below surface, and no exploration or mining has been done at depth.
Bau has total measured and indicated resources of more than 21.285 million tonnes @ 1.64 grams/tonne for almost 1.125 ounces of gold and inferred resources of more than 50.206 million tonnes @ 1.35 grams/tonne for more than 2.181 million ounces. Besra is projecting new production capacity from Bau Central during late 2015.