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Etruscan Resources Inc -
Etruscan receives positive feasibility study for Samira Hill
Etruscan Resources Inc
EET
Shares issued 35,887,467
1999-05-19 close $0.63
Thursday May 20 1999
Mr. Gerald McConnell reports
Etruscan has received a positive bankable feasibility study for the Samira Hill gold
project in Niger, West Africa. The feasibility study concludes that Samira Hill will
produce an average of 67,000 ounces of gold per year at a cash operating cost of
$168 (U.S.) per ounce over a 6.3-year mine life. The feasibility study was
prepared under the joint management of Mineral Resources Development Inc. of
San Mateo, Calif., and Metallurgical Design Management (Pty) Ltd. of Randburg,
South Africa.
The Samira Hill mine will produce 425,000 ounces of gold from the oxide and
transition ores, operating two open pits at a mining rate of 3,000 tonnes of ore per
day. Proven and probable reserves are estimated at 6.57 million tonnes grading
2.40 grams gold per tonne with a strip ratio of 3.06 to 1. Average gold recoveries
are estimated at 83.9 per cent with 93 per cent recovery in oxide ores. Gold will
be recovered from a carbon-in-leach plant. Additional ounces in the deeper
sulphide zones were not covered by this study.
Capital costs are estimated at $23-million (U.S.), which includes mill and process
plant construction, diesel power generation and distribution, tailings dam
construction and working capital. Operating costs are estimated at an average of
$10.83 (U.S.) per tonne of ore over the life of the mine. Total cash costs,
including royalties to the Republic of Niger, are estimated at $189 (U.S.) per
ounce. Using base case economics at an unhedged gold price of $300 (U.S.) per
ounce indicate after-tax cash flow of $23.3-million (U.S.) and a net present value
of $11.6-million (U.S.) at an 8 per cent discount rate. Samira Hill will benefit from
a five-year tax holiday granted by the Republic of Niger for new mining
operations. Project economics incorporating a hedging program to achieve an
average gold price of $315 (U.S.) would increase after-tax cash flow to
$29.3-million (U.S.) and a net present value of $15.9-million (U.S.).
Etruscan has engaged RMB Resources Ltd., a wholly owned business of Rand
Merchant Bank of South Africa, to arrange project debt financing. RMB has
already provided Etruscan with $3.5-million (U.S.) of convertible debt financing to
complete the feasibility study. Loewen, Ondaatje, McCutcheon Limited of
Toronto, Canada, and First Mining Finance of Perth, Australia, have been
retained to raise the equity requirement of the project financing.
Etruscan has commenced site preparation and engineering so that plant assembly
can begin in October of 1999, subject to securing of project financing. The first
gold pour at Samira Hill is scheduled for July of the year 2000. The company will
continue to pursue options to further enhance project economics, including the
mining of additional oxide ore within three kilometres from the nearby Libiri
deposit on the contiguous Saoura permit. Etruscan has agreed to purchase the
Saoura permit from Ashanti Goldfields Company Ltd. and Iamgold Corporation.
This transaction is scheduled to close by July 6, 1999.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
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