The Kubi mining lease covers 1,960 ha and is located in the Adansi West District of the Ashanti Region of Ghana.
The deposit was first developed by local artisanal miners, with eight adits being driven in the 1920s. Between 1999 and 2004 the property was leased to AngloGold Ashanti, which trucked the ore to its nearby Obuasi plant from two small open-cut pits, recovering 58,696 ounces of gold from surface oxide ore grading 3.65 g/t gold. The government of Ghana retains a 10-per-cent free carried interest and International Royalty Corporation holds a 3-per-cent net-profits interest.
A positive preliminary assessment/scoping study have been completed and indicate that the project can be developed as a profitable underground mining operation with a base case internal rate of return (IRR) of 28 per cent and a net present value (NPV) at a 10-per-cent discount rate of $38.6-million. Based on the findings of the Golder Associates Ltd. study, PMI Gold is now advancing Kubi toward a full feasibility study for production of up to 50,000 ounces of gold per year at an expected average cash cost of production for the first five years of $336 per ounce.
Indicated mining resource stand at 5.1-million t at 4.092 g/t, containing 505,122 ounces gold.
Kubi would be a conventional underground, narrow mining operation. Mine access will be provided by sinking a 4.25-metre-diameter circular shaft to an initial depth of 400 metres. In addition to the skip and skip cage, the shaft will also provide a ladder way and services/ventilation compartment.
Mining of the steeply dipping vein system will be by standard shrinkage mining methods. Drifts will be at 30-metre levels, and initially stopes will be 60 m long by 30 m high, and have an average width of two m, each stope representing 10,000 t or two weeks of production. Allowance has been made in the mining plan for a deep exploration program from the 370-metre level to explore for additional resources.
The project envisaged a mill feed grade of 6.876 g/t gold in the first year of operation (2011); a mining rate of 150,000 t per year for 2011, including to 280,000 t per year from year 4 onward; a gold production of 33,000 to 50,000 ounces per year over a 14 years mine life.
The gold mineralization is non-refractory and free milling. The processing facilities will include crushing and grinding circuits followed by a gravity separation circuit, which is expected to recover over 85 per cent of the gold.
Capital cost was estimated at $41.5-million.
- Nearest Landmark: DUNKWA
- Distance from Landmark: 6Km
- Direction from Landmark: NORTH
- Latitude: 6deg 0Min N
- Longitude: 1deg 43Min W
- Satellite Image: Click to View »
- Name: PMI Gold Corp
- Interest: 90%
- Note: Public
Reference:31 Dec 07