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Managem posts feasibility study, earns 70% of Avocet's Tri-K gold project

Avocet Mining PLC transferred a further 30% of its Tri-K gold project in Guinea to Managem SA to increase the latter's interest to 70% in accordance with a 2016 joint venture agreement.

In early August, Managem sent the company an overview of a work program required as part of the deal, the related costs and a feasibility study outlining reserves of 1.1 million ounces, allowing it to increase its Tri-K stake to 70%.

Avocet noted in its Sept. 5 release, however, that the parties remain in discussions about a "significant overspend" of the costs of the work program.

Managem secured an initial 40% interest in the project in May 2017 by paying US$4 million and providing related shareholder loans.

The feasibility study on the proposed Tri-K mine defined an after-tax net present value of US$190.4 million, using a 5% discount, with a 27.48% internal rate of return and a 3.4-year payback period.

Total CapEx was estimated at US$217.7 million, comprising initial CapEx of US$175.7 million, deferred CapEx of US$14 million, rehabilitation and closure costs of US$11.7 million and sustaining capital of US$16.3 million.

Tri-K is expected to produce 115,709 ounces of gold per year for 8.67 years, for a total of about 1 million ounces of gold. All-in sustaining costs over the life of mine were pegged at US$748/oz.

The property hosts proven and probable reserves totaling 19.2 million tonnes of ore grading an average 1.85 g/t of gold for 1.1 million ounces.