London-listed Caracal Gold has confirmed robust economics for an expansion of the Kilimapesa Hill project, in Kenya, to a ten-year, 24 000 oz/y gold operation.
A scoping study found that the project can generate $93-million of free cash flow over the ten-year lifespan, with a 114% internal rate of return and two-year payback period.
Caracal has been focused on delivering an optimisation strategy at the project, where it aims to increase gold production to 24 000 oz/y and the resource to more than two-million ounces.
Caracal reports that the just under $20-million pre-production capital cost contributes to the project’s robust economics, as well as its low strip ratio mine plan and simple heap leach processing route.
Notably, the project benefits from the capital already spend to date by Caracal and fellow-listed Goldplat, as well as existing infrastructure. Caracal says the expansion project can be completed in just six months.
The company plans on undertaking additional drilling early in the new year, to exploit any more upside potential near the mine.
CEO Robbie McCrae is confident the resources around the project can easily double the life of the mine.
Additionally, the Vim Rutha prospect, a shear zone of about 4.9 km parallel to the known orebody at the Kilimapesa Hill deposit, offers potential commercially viable ounces very close to the existing plant, further strengthening the opportunity.
He confirms that the company is fully funded to deliver the Kilimapesa Hill expansion project, and exploration programmes in both Kenya and Tanzania.