KEFI Minerals plc (LON:KEFI) has released an updated feasibility study for its Tulu Kapi gold project in Ethiopia.
The study updates the results from an earlier study completed in 2015, and while there are some significant changes, the measurable viability of the project remains largely the same.
The new study envisaged Tulu Kapi as an operation capable of producing 115,000 ounces of gold per year, up on the 95,000 ounces envisaged in the earlier study.
Predicted average head grade remains the same at 2.1 grams per tonne gold, but the ore processing rate is significantly boosted to between 1.5 mln tonnes and 1.7 mln tonnes, up from the 1.2 mln tonnes built into the plans in 2015.
Cash costs came in slightly up, at US$684 per ounce, while all-in sustaining costs were slightly down at US$777 per ounce.
As a result of these adjustments, the net present value at the start of construction drops to US$97 mln from US$125 mln, while the NPV at the start of production rises to US$272 mln from US$256 mln.
Significantly, the internal rate of return drops from 28% to 22%, but overall net operating cash flow over the first 8 years rises from US$50 mln per year to US$55 mln, according to the warranted numbers used by consultants Lycopodium.
Internally, though, KEFI reckons cashflow ought to go as high as US$62 mln.
Projected costs to get the project built remain as recently trailed at around US$160 mln.
Executive chairman Harry Anagnostaras-Adams struck an upbeat note on the news.
"Comparison with KEFI's 2015 DFS two years ago summarises the myriad of refinements since then, such as detailed operational plans with project contractors including accelerated ore processing that increases gold production to 115,000 ounces per annum, thus improving profitability and cash flows,” he said.
“The update also details the technical rigour behind the improvements made to the project since KEFI assumed control in 2014."