Tengrela Gold Project
The 876sq km Tengrela Gold Project is located in Ivory Coast on the border with Mali, 30km south-south-west from the Syama gold mine (6.5 Moz) along the Syama shear. The project is 150km south-south-east of the Morila gold mine (7Moz) and 65km west-north-west of Tongon deposit (4.3Moz).
Resources
While Tengrela is not as advanced as our EGM project in Ghana, drill results have highlighted the significant potential of the project. Tengrela has recorded spectacular results such as 6m at 476g/t Au, 6m at 429g/t Au, 22m at 72.1g/t Au and 8m at 65.7g/t Au. Mineralisation remains open to the north, south and at depth.
In August 2010 an updated resource estimate increased the Indicated resources at Tengrela to 0.9Moz of gold while Inferred resources now total 0.3Moz. The resource estimate was taken at Sissingue, one of a number of gold anomalies at Tengrela. Gold Reserves at Tengrela stand at 0.66Moz. A resource upgrade for Sissingue is currently planned for Q2 2012.
We are targeting a significant increase in the resources at Tengrela during 2011 and beyond. Extensional drilling at Sissingue and exploration drilling across the Tengrela project is continuing, with six rigs on site. We aim to complete 200,000m of drilling this year. We have made significant discoveries at Tengrela with the Kanakono prospect recording high-grade results of 2m @ 13.3g/t Au and 16m @ 15.2g/t Au, and resumed drilling there in May 2011. Recent results have included 37m @ 5.5g/t Au and 36.4m @ 4.0g/t Au at Sissingue, and an intercept of 2m @ 60.6g/t Au at Kanakono, less than 100m from a previous near-surface intercept of 4m @ 42.6g/t Au.
The Podio and Sissingue East prospects are also significant discoveries. A newly-commissioned multi-purpose rig is currently drilling at Podio, and programs at Wora and other prospects are planned to begin in coming months.
We lodged an Environmental and Social Impact Assessment with Ivorian authorities in September 2011, and we are anticipating environmental approval by the end of 2011. A contract for design and engineering has been awarded.
Production Strategy
A definitive feasibility study (DFS) for Sissingue was completed in November, 2010 and showed the Sissingue deposit has the potential to become a 200,000ozpa contributor in our goal to become a 400,000ozpa gold producer by 2013.
Highlights of the Tengrela Feasibility Study included:
- Initial Probable Ore Reserve of 657,000oz of gold (using US$950 gold price for pit design)
- Production of 340,000oz of gold in first two years of a six-year mine life
- Production planned to commence in 2013 with 178,000 ounces of gold produced in 2013 and 162,000 ounces in 2014
- Cash costs (C1) in the first two years of US$421/oz, with mine life average cash costs of US$505 per oz
- EBITDA of US$221M for first two years of production at US$1,100 gold price
- Start-up capital cost of US$109 million paid back in 12 months at US$1,100 gold price
- Drilling will continue to expand resources at Sissingue while exploring additional prospects.