West Africa’s newest gold producer Tietto Minerals Ltd (ASX:TIE) continues to ramp up production at the 3.83-million-ounce Abujar Gold Project in Côte d’Ivoire, producing 11,191 ounces of gold last month and milling more than 400,000 dry tonnes at an average grade of 0.90 g/t.
Significantly, the company produced free cash flow of more than A$10 million in August, increasing the closing cash and bullion balance to A$53.4 million, ahead of a scheduled 25% repayment of a debt facility to Coris Bank amounting to US$6.25 million.
Abujar is forecast to generate strong cash flows of US$50 million to US$60 million in the second half of the year, with all-in-sustaining costs of $1,175-$1,350 per ounce.
H2 production adjustment
The company completed more than 15,000 metres of grade-control drilling at Abujar during July and August, at a close-spaced pattern of 12.5 metres by 6.25 metres, allowing for a more accurate forecast of mining and production between September and December.
"Detailed grade control (drilling) has resulted in the same amount of contained gold, but a 10% increase in tonnes mined,” Tietto managing director and CEO Matt Wilcox said.
Consequently, Tietto has adjusted the second-half gold production guidance to between 75,000 to 85,000 ounces to reflect the grade control drilling results August, an updated reserve model and reduced stockpiles.
Abujar’s 2023 reserve model, which was generated using the April 2023 resource model update, shows a 10% increase in ore tonnes and an 8.3% decreased grade, resulting in a 2% metal reduction compared to the 2022 reserve model used in the March 2023 forecast.
“We have initiated a debottlenecking study with an aim to increase mill throughput by 15% to 5.5 million tonnes per annum, which would bring forward gold ounces and lower cash costs of production,” Wilcox added.
Mining performance
Access to high-grade ore deeper into the pit was obstructed by large bodies of water making ground conditions difficult in August.
This resulted in actual mining benches averaging 10 metres higher than forecast in March.
As well, the wet weather affected productivity as more work needed to be done to access working areas, including sheeting (road-surfacing) with suitable laterite material prior to mining.
Productivity is expected to improve when West Africa transitions to dry weather in October.
Full LOM schedule
Independent resource consultant RPMG has completed the seven-year production schedule update based on the updated 2023 resource model that forecasts production up to 2030.
“We will release a full life of mine (LOM) study by the end of September based on the current circuit, which we expect will result in average production of 172,000 ounces of gold over the first seven years of production at an expected all-in cost of approximately $1,100 per ounce, producing very strong annual free cashflows,” Wilcox said.
Under the full life of mine schedule, production is anticipated to extend for over 11 years.