KEFI Gold and Copper PLC (AIM:KEFI, OTC:KFFLF) said a Pre-Feasibility study on the Hawiah mine project in Saudi Arabia has provided a solid basis to move forward to the next stage.
Net present value was calculated at US$301mln with an internal rate of return of 75%, based on ten-year life-of-mine revenue of US$2.7bn, operating cashflow of US$1.1bn and pre-production capital expenditure of US$295mln.
The estimates were based on spot prices in April and assumed an operation producing 3mln tons per annum (mtpa) of ore at its peak over the ten years with the mine and open pit initially before going underground.
Metallurgical test results so far indicate that a conventional processing flowsheet provides high metal recoveries to a 25% copper concentrate and a 50% zinc concentrate and gold doré, the statement added.
In a statement, Harry Adams, KEFI’s executive chairman, commented: "The PFS demonstrates an attractive project at Hawiah.
"To date, we have only tested a small part of the Hawiah district and we already have a project that can be optimised for development.
"Following the recent capital raise, work is already underway on the +50,000 metre drilling programme which will complement the Hawiah PFS and associated studies.”
Elsewhere, Adams said KEFI is “wrapping up” a 13,000-metre programme at Jibal Qutman, also in Saudi, and assessing initial results from reconnaissance over the fourteen exploration licences granted in the past eighteen months.
"KEFI has now established its leadership position in the Arabian-Nubian Shield and has assembled development finance at the subsidiary and project levels for all three advanced projects which have combined c.5 million ounces of gold-equivalent resources which remain open for extensional drilling,” he said.