Azumah Resources Ltd.'s scoping study showed that an underground mining operation for the open pit Bepkong gold deposit may boost the Wa project in Ghana with an estimated 154,000 ounces of contained gold and about US$32 million in post-royalty revenue.

The company said Aug. 5 that an underground operation at Bepkong will only need to cover dedicated capital and associated operating costs, with all project establishment costs expected to be repaid by open pit operations before the start of underground mining.

Excluding the Bepkong underground expansion, the project is expected to have a pretax net present value of US$177 million, discounted at 5%, an internal rate of return of 35% and capital payback of US$117 million in 1.6 years, based on open pit optimizations and revenue estimates using a US$1,300 gold price.

Ahead of completing the feasibility study, which is expected by year-end, the joint venture will evaluate a number of financing options to obtain the capital needed to support a development decision.

In July, Ibaera Capital Fund LP earned an initial 42.5% stake in the Wa project. The JORC 2012-compliant mineral resource estimate at Wa climbed 11% to 2.8 million ounces after a maiden underground resource was estimated at the Bepkong deposit.