Tietto Minerals Ltd (ASX:TIE)'s open-pit heap leach scoping study at the APG deposit, part of its 3.45-million-ounce Abujar Gold Project in Côte d’Ivoire, West Africa, has yielded positive results.
The study confirms potential for Tietto to develop a second standalone mine at Abujar’s APG deposit via a heap leach gold processing operation, with production forecast to average more than 100,000 ounces per year for the first three years and 85,000 ounces of annual production forecast over 10 years, amounting to 850,000 ounces recovered from 68 million tonnes at 0.48 g/t.
Strong financial returns
Tietto believes APG will deliver strong financial returns over a 10-year mine life at an average production rate of 7.5 million tonnes per annum and that gold recovered from an APG heap leach could potentially lift Abujar’s annual production profile to between 260,000 and 300,000 ounces per year based on the definitive feasibility study (DFS) forecast.
The heap leach project has an estimated pre-production CAPEX of US$98 million – with an accuracy level of around 35% – and a payback period of 1.3 years at the study gold price of US$1750 per ounce.
It has a post-tax NPV5% of US$247 million and a post-tax IRR of 63% at the study gold price.
Life of mine (LOM) revenue is estimated to be US$1,491 million and EBITDA of US$620 million with average annual free operating cashflow of US$52 million per year for the first five years of mining operations.
Potential for second mine
Managing director Dr Caigen Wang said: “Our APG scoping study has demonstrated the potential for Tietto to develop a second mine at Abujar; a standalone heap leach operation at the APG deposit that would allow us to bring forward gold production from that deposit and increase overall gold production early in the life of the Abujar Gold Project.
“We now have an option to essentially add up to a 50% increase in annual gold production at Abujar from building a heap leach at APG running in parallel to our 4.5-million-tonne-per-annum CIL Abujar gold plant. Subject to the required test work, feasibility studies and permitting, we believe we could be producing gold at APG by the end of Q4 2024.
“Although gold recovery from heap leaching fresh ore at APG is lower than conventional CIL, the lower operating costs of a heap leach allow the use of lower cut-off grades. This increases the amount of material presented to the optimiser at the gold price used for the scoping study, compared to conventional CIL processing.
“Our construction and operations team have first-hand experience in building and running heap leach operations in West Africa and we will now move on to additional studies assessing the potential of this opportunity.
Another resource update on way
“We are working on another Abujar resource update for delivery in the first half of 2023.
"At current drilling rates, we expect it will include more than 100,000 metres of diamond drilling from March 2022 to the end of December 2022 to build on our April 2022 MRE.
"This new resource model will be used for mine update study to be delivered in the first half of 2023.
“Tietto is fully funded to production at Abujar with zero debt and zero gold hedging and we’re excited to be West Africa’s next gold producer within weeks. Our strategy points towards a strong balance sheet in 2023 to drive our growth ambitions.
“In the meantime, we continue to explore and drill across our project portfolio to build a larger gold inventory for gold production.”
Shares today have been as much as 3.95% higher to A$0.79 after hitting a new record high of $0.84 earlier this month while the company's market cap is approximately A$838.79 million.