Tietto Minerals Ltd (ASX:TIE) has released a robust open pit definitive feasibility study (DFS) for its 3.35-million-ounce Abujar Gold Project in Côte d’Ivoire, West Africa.
Promisingly, the DFS has boosted forecast production in the first year by 30% from the PFS to 260,000 ounces of gold at an all-in sustaining cost (AISC) of US$651 per ounce.
Looking beyond that, Abujar can deliver 1.2 million ounces of gold over the first six years at 200,000 ounces per annum, an increase of 20%, and at an average AISC of US$804 per ounce.
West Africa’s next gold mine
Tietto's Abujar's location in Côte d’Ivoire.
Tietto managing director Dr Caigen Wang said: “Our recent update to the Abujar resource model has allowed Tietto to deliver a DFS that confirms Abujar’s potential to be one of the largest gold producing mines in Côte d’Ivoire.
“The DFS metrics are clearly compelling – all PFS measures have materially improved, from production to finance.
“Gold production, in particular, is positioning Abujar as a Tier 1 gold mine.
“We are confident the Abujar Gold Project will continue to enjoy growth in both resources and reserve and hence LOM production increases into next year through our continued large-scale drilling program.
“We are focused on advancing the Abujar Gold Project towards becoming West Africa’s next gold mine.
Growth in Abujar resource
With its fleet of drill rigs, Tietto has grown the Abujar mineral resource to 3.35 million ounces of gold and expects to further build on this as it drill-tests underground targets and 20 regional prospects within 10 kilometres trucking distance to the planned Abujar mill.
The company believes it can add materially to the Abujar DFS gold production profile and it has engaged consultancy Entech to review an AG underground scoping study using pit limits defined in the DFS.
Tietto will examine the potential for the Abujar mill throughput to increase above DFS levels once the plant is operational, as demonstrated by other West African gold projects.
Notably, the updated open pit probable ore reserves have grown to 34.4 million tonnes at 1.3 g/t gold for 1.45 million ounces at US$1,407 per ounce, a 68% increase over the PFS and 78% of indicated mineral resources.
3D view showing AG Main pit (1.7km-long) on left and AG South pit (1.3km-long) on right
Life of Mine
Tietto’s Life of Mine (LOM) mining inventory inclusive of ore reserves stands at 44.9 million tonnes at 1.2 g/t gold for 1.7 million ounces gold recovered with a strip ratio of 6:1.
The company has demonstrated strong LOM financial results across a suite of gold prices:
- Life of Mine (LOM) revenue US$2.87 billion;
- LOM pre-tax free cash flow of US$1.28 billion (post-tax US$0.97 billion) and EBITDA of US$1.52 billion;
- 11-year project life and payback period post-tax of less than 1 year from the first production;
- NPV5% (pre-tax) US$959 million and NPV5% (post-tax) US$722 million;
- IRR (pre-tax) 115% and IRR (post-tax) 95%;
- Average AISC of US$832/oz LOM;
- Pre-production capital requirement of US$200 million including contingencies.
Opportunities to improve on DFS production
Tietto’s robust DFS economics support substantial debt funding opportunities for Abujar.
There are opportunities to improve on DFS gold production by increasing project output via:
- 30,000 metres of infill diamond drilling – targeting delineation of measured resources for the first two years production;
- 5,000 metres deep drilling targeting underground potential below the ore reserve pit design at AG core to be completed before the end of 2021;
- Aggressive regional exploration drilling - 20 exploration prospects within 10 kilometres of the proposed Abujar Plant; and
- APG heap leach potential – first results from program expected by the end of 2021.
Forward plan
Proposed layout for the Abujar Project
All mining and environmental approvals for Abujar are in place with the Mining Convention expected to be ratified this quarter.
Notably, with early works/FEED there are multiple work streams in place to fast-track plant construction.
In addition, Tietto is on track to deliver its first gold at Abujar in the December quarter of 2022.
Furthermore, the company is well-funded, with about A$31 million in cash at the bank at end of September 2021.
Shares have been as much as 16% higher to A$0.44 while the company's market cap pre-open was approximately A$173.4 million.