Katoro Gold plc (AIM: KAT), the AIM listed gold and nickel exploration and development company, is pleased to announce the results of the scoping study (the ‘Study’) completed in respect of the Company’s Blyvoor near term gold production opportunity (the ‘Project’).
· The Study demonstrated an unlevered Project Net Present Value (‘NPV5’) of US$131million, a 25% Internal Rate of Return (‘IRR’) and a Return on Investment (‘ROI’) of 260%
· Mine life of 25 years building to a production capacity of 500,000 tons per month and 35,000 ounces of gold production per annum. Overall production of 661,171 ounces of gold over the 25 years, generating revenue of US$992m
· Low cost operation with an estimated All-in Sustaining Cost (‘AISC’) of US$727 per ounce of gold and an All-in Cost (‘AIC’) of US$920 per ounce of gold. Total Project capital costs of US$110m across the life of the Project, with peak funding requirement of US$36.4m
· The Study utilised a gold price of US$1,500 per ounce compared to the current price of c. US$1,700 per ounce
· Based on the current data available, Minxcon has estimated the potential Mineral Resource at the Project which is used in the Study to be 1,290,000 ounces of gold with 277,000 ounces in the Measured and Indicated categories and 1,013,000 ounces in the Inferred category
· Following rigorous independent evaluation and assessment the Project demonstrates robust technical and economic viability
Louis Coetzee, Executive Chairman of Katoro, said:
“When Katoro signed the Project agreement in January 2020 we believed the Project represented a unique opportunity for near-term gold production and potentially considerable financial returns.
“We were keen to subject the Project to thorough independent validation, and the completion of the scoping study was an important step in that process with pleasing results.
“The Study (Preliminary Economic Assessment) results announced today have exceeded the board’s expectations and importantly back our initial confidence by demonstrating the robust technical and economic viability of the Project.
“The Study has highlighted areas where, in the build up to production, we can add further technical and economic value, and has confirmed that sufficient historical work has already been undertaken to allow the Project to immediately progress to the definitive feasibility stage.
“A detailed review of the Study is now underway and a further update to the market will be provided in due course considering the findings in detail and outlining the next steps in project development, including with regard to project level financing negotiations.”
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