A RECENTLY completed pre-feasibility study (PFS) has demonstrated excellent economics for Renaissance Minerals’ Okvau Gold Project in Mondulkiri province and confirms it as a low-cost operation with robust cash flow, particularly in early years. The PFS outlines an initial Life of Mine (LOM) of eight years, annually producing on average 91,500 ounces of gold.
It is based on a 1.5 million tonnes per annum operation from a single open pit with mining in three stages using conventional mining methods and processing comprising flotation and cyanide leaching to produce gold dore.
The PFS was prepared using a resource estimate of 15.8 million tonnes @ 2.22 grams/tonne gold for 1.13 million ounces. There are 73% of total resources within the pit design with 92% of in-pit resources in the indicated category. The revised resource model was based on a comprehensive understanding of the structural controls of Okvau deposit and additional drilling data.
It sets out a defined and low-cost pathway to preparation of a definitive feasibility study and development decision with minimal additional drilling required. There is also significant growth potential with a rigorous exploration target review and prospect generation program under way.
A simple mine design provides scope for scheduling optimization and mining cost reduction. The pit has been designed and scheduled in three distinct stages to allow for reduced waste stripping in the initial years and operational flexibility. Stages 1 and 2 provide 70% of the LOM mill feed, equivalent to the initial five years of operation, at a strip ratio of 4.7:1. As a result, production costs are highly competitive with C1 cash costs and AISC of US$561 per ounce and US$611 per ounce, respectively.
Renaissance managing director Justin Tremain said, “The PFS shows a robust, low operating cost project that will generate significant cash flow of approximately US$45 million per annum in the early years with resilience to lower gold prices. It is an uncomplicated project with excellent grade. A new resource model with similar grade and ounces to the previous resource model, clearly demonstrates the robust nature of the deposit.”
Renaissance recently received firm commitments to raise $1.7 million through a placement to new and existing institutional and sophisticated shareholders. In addition, a Share Purchase Plan was offered to eligible shareholders to raise up to $300,000. In conjunction, OZ Minerals’ entire shareholding of 50 million shares was placed to institutional and sophisticated shareholders.