Centamin upbeat on findings at Doropo Gold Project

(Sharecast News) - Gold miner Centamin released the findings of its pre-feasibility study on the Doropo Gold Project in north-eastern Côte d'Ivoire on Tuesday. The FTSE 250 company said the study reported a probable mineral reserves estimate of 1.87 million ounces of gold.

It said the reserves had an average grade of 1.44 grams of gold per tonne, and were expected to support a 10-year life-of-mine.

The Doropo Gold Project was projected to have average annual gold production of 173,000 ounces over the life-of-mine.

In the first five years, average annual production was anticipated to be 210,000 ounces.

The study estimated an all-in sustaining cost of $1,017 per ounce sold over the life-of-mine, with an average of $963 per ounce for the first five years.

Centamin said the mine plan would involve conventional open-pit mining of a series of shallow pits, which is a common method in the industry.

The proposed mineral processing method would comprise a semi-autogenous grinding (SAG) mill, a ball mill, and a crusher (SABC) circuit, with a capacity of processing four million to 5.5 million tonnes per annum.

Additionally, a conventional carbon-in-leach (CIL) circuit would be used, targeting an average gold metallurgical recovery rate of 92% over the life-of-mine.

The total capital expenditure required for constructing the Doropo Gold Project was estimated to be $349m, including a 10% contingency.

Centamin said the payback period was expected to be 2.3 years, based on a gold price of $1,600 per ounce.

The board said the economic analysis demonstrated robust indicators for the project, with the post-tax 5%-discounted net present value (NPV5) standing at $330m, and the internal rate of return projected to be 26%, using a $1,600-per-ounce gold price.

Centamin said it was planning to conduct a definitive feasibility study (DFS) and complete the environmental and social impact assessment (ESIA) by the first half of 2024, ahead of the mining license submission deadline.

The board said the pre-feasibility study had identified potential opportunities for resource and reserve growth, as well as improvements to capital and operating expenditure estimates.

"The results from the Doropo pre-feasibility study demonstrate an economically robust project that meets Centamin's hurdle rates to proceed with a definitive feasibility study," said chief executive officer Martin Horgan.

"A life-of-mine average production rate of approximately 175,000 ounces per annum at an all-in sustaining cost of $1,000 per ounce over 10 years, delivering an internal rate of return of 26% at a gold price of $1,600 per ounce, in a well-established mining jurisdiction, represents an excellent outcome."

Horgan said the firm had identified opportunities to further optimise the project, which would be assessed as part of the definitive feasibility study, which was scheduled for completion in mid-2024.

"A substantial part of the definitive feasibility study fieldwork has already been completed in 2023 which derisks the timeline to completion and further confirms our faith in the potential of Doropo to support a commercially viable project which will bring significant investment and job creation to northeastern Côte d'Ivoire."

At 1005 BST, shares in Centamin were up 1.87% at 92.5p.

Reporting by Josh White for Sharecast.com.