African Gold Group has unveiled the results of a definitive feasibility study (DFS) for its Kobada gold project located in southern Mali.

The gold project is situated adjacent to the Niger River and the international border with Guinea.

It is based on one mining exploitation permit of 136 km2 and one exploration permit of 80 km2 , which are he permits are wholly owned by AGG Mali SARL, the local Malian Company, a  subsidiary of African Gold.

The DFS envisions average annual production of 100,000 ounces of gold per annum for the first 5 years of operation at the project.

Kobada gold project requires a capital expenditure of $125m

Based on current reserves, Kobada is estimated to produce a total gold production of 728,654 ounces over 9.4 years life of mine, with average total operating cash costs US$704/oz.

Using articulated trucks and a hydraulic loader, the Kobada gold project deposit is planned to be mined with a standard open-pit mining method.

According to the study, the gold project requires a capital expenditure of $125m, with a payback of 3.82 years from start of production, assuming the sustained gold price of roughly $1 530/oz.

The gold project will be powered by a standalone 11MW hybrid solar/thermal power plant, which will be funded by an independent power producer.

African Gold stated: “In the 2016 Feasibility Study, test work was conducted to support a process flowsheet based on recovering gold through gravity means only, and other recovery options were not assessed.

“As part of the DFS study, a detailed metallurgical testwork programme on representative composite samples across the mineralized zones was carried out in two phases.”

In April, African Gold announced prospecting and rock sampling results from a new shear zone on its fully permitted Kobada gold project.