A definitive feasibility study on a staged expansion of Asanko Gold Inc.'s namesake gold mine in Ghana confirmed that the project is viable and robust, the company said June 5.
The first stage, dubbed Project 5 Million, comprises an upgrade to increase the capacity of the existing carbon-in-leach plant from 3 million tto 5 million tonnes per year and the development of the Esaase pit, which includes the construction of an overland conveyor from Esaase to the processing facility.
First-stage operations are expected to produce an average 230,000 ounces per year over a 20-year mine life, with all-in sustaining costs of US$968/oz.
The first stage of the expansion is expected to require CapEx of about US$150 million. The study outlined a net present value of US$658 million, using a 5% discount rate and a gold price of US$1,250/oz, with an after-tax incremental internal rate of return of 13%.
Asanko Gold plans to fund the first stage with its own cash reserves and operational cash flow, with full commissioning anticipated in the fourth quarter.
The second stage of the expansion, Project 10 Million, aims to double the mine's processing capacity to 10 Mt/y, with the construction of an additional 5 Mt/y carbon-in-leach plant.
The phase-two project is expected to increase annual production to an average 450,000 ounces at steady state for eight years, with all-in sustaining costs of US$890 per ounce.
Combined CapEx for both stages is pegged at US$350 million.
The net present value for Project 10 Million, using the same discount rate and gold price, was pegged at US$811 million, with a 20% internal rate of return.
Asanko Gold noted that a construction decision will be made at the board's discretion, subject to an optimized balance sheet, financing opportunities and market conditions.
The company also reiterated production guidance of between 230,000 ounces and 240,000 ounces of gold for this year.