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Standard, Investec consider Botswana mine.

Posted On Friday, 06 June 2003 02:00 Published by eProp Commercial Property News
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Gaborone - Construction of Botswana's first modern gold mine was planned for August, with production starting a year later, Gallery Gold chairman David Harley said yesterday.

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Two banking groups, Macquarie/Investec and Standard/Societe Generale, were undertaking due diligence studies on the company's Mupane gold strike with a view to providing $33 million. These would be completed during this month.

Gallery Gold has a primary listing on the Australian Stock Exchange and a secondary listing on the Botswana bourse.

In a report to the Australian exchange, Harley said a bankable feasibility study showed a reserve of 589 000 ounces at $320 an ounce, indicating a five-year mine life.

There was a resource base of 983 000 ounces, and higher gold prices would result in an increased conversion to reserves.

Definitive banking term sheets were expected by mid-June.

The study had assumed a 1 million ton-a-year plant. At $350 an ounce, the project had an internal rate of return of 24 percent.

Cash operating costs were $199 an ounce and after-tax net present value was A$23.4 million (R124 million).

An increase in the gold price to $380 an ounce would increase the internal rate of return to 31 percent and the net present value to A$33.6 million.

Mupane is 30km southeast of Francistown on the border of Zimbabwe and Botswana.

Five deposits have been explored: Tau, Tolo, Kwena, and Signal Hill A and F, with Tau accounting for 69 percent of the total resource and 82 percent of the proven and probable reserve.

The plan is open-pit mining with a central processing plant over Tau, also fed by ore trucked from the other mining points, which are in a 1 825km2 area.

The gold will be toll refined in South Africa.

Outgoing managing director Keith McKay was confident that underground operations at Tau could extend the life of the mine. He was confident of a minimum seven years.

Tau could extend beyond 230m, at which depth it could sbecome an underground mine.

Harley also announced that McKay was being succeeded by Hamish Bohannan.

 

Last modified on Thursday, 17 April 2014 12:49

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