Predictive Discovery Ltd (ASX:PDI, OTC:PDIYF) has released a pre-feasibility study (PFS) for its Bankan Gold Project in Guinea, detailing robust production and financial metrics that underscore the project's global appeal.
View towards the Niger River from the project area.
The study also reveals a maiden probable ore reserve estimate of 57.7 million tonnes at 1.64 g/t, totalling 3.05 million ounces of gold – a 74% conversion from the indicated mineral resource.
Conservative assumptions increase potential
The PFS, which was based on conservative assumptions, suggests a lot of leeway for enhancements in future studies.
It details two scenarios: the ore reserve case, which is purely based on indicated mineral resources supporting the reserve estimate, and the extension case, which incorporates some inferred mineral resources to potentially extend the mine's life.
This preferred scenario by PDI predicts an average annual production of 269,000 ounces over 12 years, equating to 3.23 million ounces of gold.
Financially, the extension case is particularly robust, projecting a post-tax net present value (NPV) of US$668 million (A$1 billion) and an internal rate of return (IRR) of 25.4%, based on a conservative gold price assumption of US$1,800 per ounce.
Projected figures see a substantial rise with current spot gold prices at around US$2,300 per ounce, pushing the NPV to US$1.4 billion (A$2.1 billion) and the IRR to 41.7%, with a payback period of just two years.
The mining operation is set to employ conventional techniques with a 5.5 million tonnes per annum processing plant using conventional carbon in leach (CIL) technology.
The Bankan Project's environmental and social impacts have been thoroughly assessed with no critical issues found and continuous improvement plans are in place to mitigate identified risks.
What’s next?
PDI has now trained its sights on advancing the definitive feasibility study (DFS), bolstered by the PFS's positive results.
The company plans to further explore and potentially expand the project's resource base, refine mining and processing techniques and continue engaging with local communities and authorities to secure the necessary exploitation permit.
The translation of the PFS and Environmental and Social Impact Assessment (ESIA) into French is progressing well, with submission to the Guinean government expected soon.
Managing director Andrew Pardey said: “Release of the PFS is a significant milestone for PDI and comes four years to the day after the NEB discovery was announced.
“The Bankan Gold Project has since developed into a company-defining and globally significant gold project. In that time, PDI has defined a 5.38-million-ounce mineral resource, completed more than two years of environmental and social studies, and established significant further exploration potential across the permit package.
“Completion of the PFS now confirms the project is not only one of the largest gold discoveries in West Africa for a generation but also a future Tier-1 gold mine.
“It can become Guinea’s largest gold mine with average annual production of 269,000 ounces over the currently defined mine life of 12 years.
“Financial metrics are strong, with a post-tax NPV5% of nearly US$1.4 billion and IRR of 42% at current gold prices. Financials remain robust at the conservative PFS base case price assumption of US$1,800/oz, with an NPV of US$668 million and IRR of 25%.
“The upfront capital cost requirement of US$456 million is very competitive and all-in sustaining costs of US$1,130/ounce deliver high profit margins.
“The PFS was carried out to a globally high standard and significantly de-risks the technical and financial viability of the project.
Environmental obligations important
“A key next step for PDI is to de-risk permitting. In this regard, the PFS and ESIA are key documents in the application process for an Exploitation Permit and are on track to be submitted to the Government of Guinea shortly.
“PDI takes its environmental and social obligations very seriously and our work in these areas will be ongoing.
“Completion of the ESIA is a key milestone for the company, and it highlights a range of mitigants and management plans to effectively manage risks, with importantly, no fatal flaws identified.
“Development of the Bankan Project has potential to generate substantial benefits for local communities and Guinea more broadly, which will be realised through significant employment opportunities, further development of local service industries, and creation of taxes, royalties and local development contribution funds.
“We also believe the project can have a lasting positive impact on conservation, particularly within the Upper Niger National Park’s Core Conservation Area.
“Multiple project improvement opportunities remain which can materially enhance the technical and financial outcomes, and we intend to actively pursue these during the DFS.
“Part of this upside is the significant potential for additional deposits to be discovered close to the existing ore reserves and regionally within the broader permit package. PDI is highly confident in growing the resource base and increasing the mine life beyond the current 12 years.”