Armadale Capital’s (LON:ACP) Mpokoto project stands up economically at much lower gold prices than currently, it told shareholders today.
At a gold price of US$1,100 (currently US$1,200), the project has a net present value of US$32.3mln, compared to a market value currently of US$5mln, it told owners at its annual meeting.
Mpokoto, in the Democatic Republic of the Congo, currently has a resource of 678,000 ounces (oz) gold from 14.58mln tonnes ore at 1.45 grams per tonne (g/t) gold.
The company recently agreed a US$20mln funding deal with Africa Mining Contracting Services group (‘A-MCS’) to construct and operate Mpokoto.
“Under the terms of this landmark agreement, A-MCS agreed in principle not only to build the mine but also introduce at least US$20mln of financing to advance Mpokoto into production which, as mentioned, is targeted to commence in H1 2016.
“Mpokoto is expected to produce approximately 25,000 oz per annum over a nine year life of mine based on the current resource and at a cash cost of US$647/oz.”
Armadale also has an exploration target of 2.4-3.0 mln tonnes grading 1.25-1.5 g/t gold, which should yield an additional 120,000-150,000 oz of gold.
Another 800,000 hectares area has yet to be explored.
Shares rose 2% to 0.05p