African Gold Group Publicizes Up to date DFS With 66% Reserve Improve and 100koz per 12 months for First 10 Years

African Gold Group Publicizes Up to date DFS With 66% Reserve Improve and 100koz per 12 months for First 10 Years

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Sep 29, 2021  •  9 minutes in the past  •  28 minute learn  •  Join the conversation

TORONTO, Sept. 29, 2021 (GLOBE NEWSWIRE) — African Gold Group, Inc. (TSX-V: AGG, OTCQX: AGGFF, FRA: 3A61) (“AGG” or the “Firm”) is happy to announce the outcomes of the Definitive Feasibility Research (the “2021 DFS” or the “Research”) for the Kobada Gold Mission (the “Mission” or “Kobada”) in Southern Mali. The DFS was ready in accordance with Nationwide Instrument 43-101 Requirements of Disclosure for Mineral Tasks (“NI 43-101”) and shall be filed by the Firm throughout October.

Highlights embody:

  • Important Manufacturing Potential
    • 3 Mtpa operation producing 1.2 Moz of gold over a 16-year Life-of-Mine (“LOM”)
    • Common annual gold manufacturing of 100,000 ouncesover the primary 10 years
  • Robust Economics
    • Pre-tax NPV5% of US$506 million with an IRR of 45%
    • Publish-tax-NPV5% of US$355 million (57% improve in comparison with 2020 DFS) with an IRR of 38%
    • Pre-production capital requirement of roughly US$152 million (excl. working capital and contingencies)
    • Whole mission money stream pre-tax of US$733 million with web money stream after tax and capital expenditure of US$550 million
    • Capital payback of two.3 yr upon manufacturing graduation
  • Environmentally and Socially Accountable
    • A hybrid thermal and photo voltaic photovoltaic energy plant with battery vitality storage, shall be funded by an impartial energy producer
    • Energy charge of estimated US$0.20 per kWh leads to estimated financial savings yearly ensuing from a 43% discount in gas requirement versus typical thermal energy crops
    • Substantial discount in greenhouse fuel emissions by way of utilisation of hybrid energy plant, together with 39% much less carbon dioxide, 34% much less carbon monoxide, 39% much less sulfur dioxide and 26% much less nitrogen oxides than typical thermal energy plant
  • Rising Useful resource with Substantial Exploration Upside
    • Whole confirmed and possible mineral reserve has elevated to 1,252,522 ounces of gold, a 66% improve from the mineral reserve estimate within the earlier definitive feasibility examine report titled “NI 43-101 Technical Report on Kobada Gold Mission in Mali” with an efficient date of June 17, 2020 (the “2020 DFS”)
    • Whole measured and indicated useful resource improve by 44% to 1.71 million ounces and a Whole useful resource (together with inferred sources) improve to three.1 million ounces
    • Excessive measured and indicated useful resource to order conversion charge of 73%
    • Additional potential stays to considerably improve the useful resource and reserve alongside strike and depth on the Kobada Gold Mission
    • Over 5,500 hectares of potential mineral developments inside trucking distance but to be explored
    • Over 50 km of latest potential mineralised shear zones recognized on Kobada and Kobada Est concessions
    • Faraba concession renewed for 3 years with early exploration indicating the potential to increase shear zones even additional

Danny Callow, CEO of African Gold Group, commented:

“Over the previous two years we’ve labored tirelessly to show that the Kobada Gold Mission has the potential to be one of many largest new gold tasks in West Africa. For the reason that implementation of administration modifications in August 2019, and with new drilling campaigns totalling round 18,000 metres, we’ve managed to extend our reserve base by 144% (66% improve over the 2020 DFS).

With our up to date 2021 DFS we’ve proven that Kobada has the potential to provide over 1.2 mln ouncesof gold over a 16 yr mine life whereas delivering stable economics with post-tax NPV5% of US$355 million and an IRR of 38%.

Kobada is a predominantly free-dig operation, requires restricted blasting, and processing of ore shall be by way of a quite simple and confirmed gravity plus CIL plant with recoveries over 95% in each oxides and sulphides. The inclusion of sulphides on this up to date DFS, that are free milling and straightforward to course of, opens vital future alternatives throughout the sulphide useful resource in addition to persevering with progress potentialities within the oxides. We’re assured within the capital estimates as in comparison with latest comparable accomplished tasks within the area, and these prices stay very aggressive for a mission of this dimension. The potential to provide vital free money flows after tax and low capital expenditure highlights very enticing economics of our Kobada mission.

Based mostly upon our detailed understanding and integrity of the present useful resource, on solely 4 km of our 55 km of recognized shear zones we consider that there continues to be vital potential to extend our 3.1 million ounce complete useful resource considerably additional. Kobada is now positioned as an incredible building alternative, in a prolific gold-producing space of West Africa”

The 2021 DFS has been ready with enter from a variety of impartial consultants:

Minxcon Group (South Africa) Mineral sources
DRA Americas (Canada) Mining, mineral reserves
Maelgwyn Mineral Providers (South Africa) Metallurgical check work
ABS-Africa (South Africa) Environmental and social
Epoch Assets (South Africa) Tailings Storage facility
SENET (South Africa) Processing plant and infrastructure together with financial valuation and report compilation


Kobada Gold Mission Overview

The Kobada Gold Mission is situated in southern Mali, roughly 125 km in a straight-line south-southwest of the capital metropolis Bamako and is located adjoining to the Niger River and the worldwide border with Guinea.

The Kobada Gold Mission is predicated on one mining exploitation allow (Kobada) of 136 km2 and two exploration permits (Faraba and Kobada Est) of 77 km2 and 45 km2, that are wholly owned by AGG Mali SARL, the native Malian firm, a 100% owned subsidiary of African Gold Group.

AGG has accomplished 114,357 metres of diamond, reverse circulation, air core and auger drilling between 2005 and 2012. In 2015, AGG accomplished an additional 1,398 metres of diamond core drilling over 13 diamond drill holes. The present AGG exploration re-commenced in August 2019 and a further 18,000 metres of exploration drilling has been accomplished.

Gold mineralization is current within the laterite, saprolite, and quartz veins that comprise the mission, and within the sulphidic onerous rock beneath. There are additionally placer type deposits within the area.

2020 Drilling Marketing campaign

The 2020 drilling marketing campaign, working from September 2020 till January 2021, consisted of 43 drillholes totalling 6,364 m. Of those, 4 drillholes (522 m) had been drilled on the Gosso goal and the remaining 39 drillholes (5,842 m) had been drilled within the “hole” space and northern extents of the northern area of the Kobada fundamental shear. The drillholes on the Gosso goal had been all accomplished utilizing diamond drilling whereas the drilling at Kobada was a mix of diamond drilling (8 holes @ 1,258 m) and RC drilling (21 holes @ 2,890 m) with chosen RC drillholes being accomplished with diamond tail (10 holes @ 1,221 m RC and 473 m diamond) to drill into the sulphides.

The principle focus of the drilling was to substantiate and enhance the boldness within the geological mannequin to allow further mineral useful resource conversion of the oxides to the measured and indicated useful resource classes. The drilling was additionally used to check and ensure the depth extension of the saprolitic (gentle) materials, the transition zone and the sulphides at depth.

For the Kobada fundamental shear drilling, 34 drillholes intersected the mineralised zones and had a mean amassed mineralisation width of 29 m @ 1.22 g/t. The drilling marketing campaign has considerably contributed to the rise within the indicated useful resource within the northern area of the Kobada fundamental shear, and in addition highlighted areas of deeper weathering with oxide materials extending additional right down to a depth of roughly 160 m in locations, roughly 60 to 80 m deeper than initially anticipated.

The drillholes at Gosso goal confirmed the mineralisation noticed within the historic drillholes with the 4 drillholes having a mean amassed mineralisation width of 12 m @ 1.11 g/t.

Determine 1: 2020 Drilling Marketing campaign is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/68c8ecaf-6dd4-4025-b26d-8cb2db71dc3c

Determine 2: Part views of the Mineral Useful resource Classification of the Major Orebody is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/d071587a-9c81-45c5-8d2b-2f069af9434b

Standing of Exploration 

Upside potential stays within the quick time period on the Kobada Major Shear to improve some further inferred mineral sources to the indicated class. Along with this, the Mission has vital upside potential within the 55 km strike size of potential mineralised shear zones. These shear zones are proven in Determine 3. Of those, the Gosso goal is taken into account probably the most potential as a result of its comparable mineralisation profile to Kobada Major Shear and shut proximity to the processing plant. Thus far, solely restricted drilling has been accomplished (21 drillholes) at Gosso, with thrilling drill outcomes resembling 1.15 g/t Au over 12.5 m, together with 7.19 g/t Au over 1.3 m. As well as, preliminary discipline investigations by the AGG geologists, in early 2021, have highlighted vital upside potential on the Kobada Est targets the place artisanal mining has uncovered mineralised structural options.

The Faraba exploration allow, renewed in August 2021 for an additional 3 years, exhibits potential continuation of the Major Shear zone in a north-north-east route opening up additional exploration potential.

Determine 3: Exploration Potential is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/ad0d5a84-28ba-4725-b231-3edef0674d64

Mineral Useful resource

Useful resource Classification Tonnage

(Mt)

 Grade

(g/t)

 Contained Gold

(kg)

 Contained Gold

(koz)
Measured 21.40 0.83 17,784 572
Indicated 40.15 0.88 35,425 1,139
Measured & Indicated 61.54 0.86 53,209 1,711
Inferred 42.03 1.06 44,564 1,433
Notes:

  1. Mineral Useful resource cut-off of 0.35 g/t Au utilized. 
  2. A gold worth of USD1,800/ounceswas used for final optimisation. 
  3. Columns might not add up as a result of rounding. 
  4. Mineral Assets are said as inclusive of Mineral Reserves. 
  5. Mineral Assets are reported as complete Mineral Assets and are usually not attributed.  
  6. Geological losses have been utilized.

Desk 1: Kobada`s Mineral Useful resource Estimate as of 1 July 2021

Mine Planning

DRA Americas undertook the mine planning course of, primarily based on the measured and indicated mineral sources delineated up to now on the Kobada Gold Mission. Pit optimizations had been undertaken utilizing the next parameters:

Gold worth US$1,610/oz (base case)
Mining Prices US$ 2.5/t to US$3.0/t
Processing Prices US$ 9.41/t to US$15.08/t
Mining dilution 5%
Mining restoration 95%
Pit slopes 40° total slope angle
Metallurgical restoration Laterite Oxide ore 96.5%
Saprolite Oxide ore 96.5%
Transitional ore 90.5%
Sulphide ore 95.4%

Desk 2: Pit Optimization Parameters

The Kobada Gold Mission deposit is deliberate to be mined utilising customary open-pit mining strategies utilizing articulated vehicles and a hydraulic loader (hydraulic shovel or excavator). Roughly 66% of the uncooked materials to be mined is contained within the saprolite and laterite ores, and the overwhelming majority shall be free digging with no blasting required.

The ultimate pit design for the Kobada Gold Mission deposit is roughly 4.3 km lengthy, with a most width of 500 m and a most depth of 180 m as proven in Determine 4.

Determine 4: Kobada Ultimate Pit Design is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/bb003886-2e9a-4f12-a67e-ac16f0177eb0

The open pit mining operation will final roughly eleven years, throughout which the lower-grade materials shall be stockpiled on a pad near the first crusher location.

The mine plan targets increased grade oxide ore zones on the early part of the mission to feed into the method plant in an effort to produce a mean of 100,000 ouncesper annum for the primary 10 years, and thereafter decrease manufacturing output because the grade drops and stockpiles are handled. Additional focused drilling will intention to enhance the output from Years 11 to 16 by drilling the inferred sources in and across the present pit shell. Administration stays assured that additional drilling will yield further measured and indicated ounces to transform into further reserves.

Over the lifetime of the Mission, 45 Mt of ore shall be mined and delivered to the processing facility, and a complete of 158 Mt of fabric shall be mined and positioned on the waste dumps, representing a lifetime of mine stripping ratio of three.5:1.

The mining operations shall be undertaken by a specialised contractor chosen by the Firm. This contractor shall be chargeable for the administration and upkeep of its personal mining fleet and operators, whereas AGG will oversee the mine planning and geological grade management features of the operation. There stays an choice for proprietor mining by way of leasing of mining tools, and these choices shall be checked out as a part of the detailed engineering design course of.

Mineral Reserve

This up to date mineral reserve and useful resource estimate on the Kobada Gold Mission, as summarized in Desk 1 and Desk 3, was ready in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum “CIM” (2014) Definition Requirements included by reference in NI 43-101 and is the results of 17,355 meters (108 drill holes) of drilling accomplished by the Firm between H2-2019 and H1-2021 along with the historic drilling accomplished in earlier years.

Reserve Classification Tonnage 1

(Mt)

 Grade

(g/t)

 Contained Gold

(kg)

 Contained Gold

(oz)
Confirmed 2 20.26 0.91 14,963 527,800
Possible 2 24.77 0.87 20,545 724,700
Confirmed and Possible 2,3,4 45.03 0.87 35,508 1,252,522
Notes:

  1. Numbers might not add as a result of rounding.
  2. Mineral reserves had been estimated utilizing a gold worth of US$1,610 per ounce of gold.
  3. The cut-off grade used to estimate the mineral reserves was 0.35 g/t, with a dilution of 5% and mining restoration of 95%.
  4. Solely laterite, saprolite, transition and sulphide materials from the measured and indicated useful resource classes had been thought of for the reserve estimate.

Desk 3: Kobada`s Mineral Reserve Estimate

Mine Schedule

The mining schedule has targeted on maximising gold manufacturing at a mean annualized charge of 100,000 ouncesper annum, but in addition focusing on the decrease capital-intensive oxides initially earlier than mining and processing the sulphides. The up to date optimised mining schedule is indicated in Determine 5.

Determine 5: Gold Manufacturing over LOM is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/808904cf-69d6-4f57-b8f3-9c90abc0d57e

Processing

In 2019/2020 complete metallurgical exams inclusive of variability had been carried out on saprolite/laterite ore sorts to determine the optimum processing route. This check work was carried out by Maelgywn Mineral Providers (“MMS”) in South Africa underneath SENET’s supervision. Outcomes from this check work indicated that the saprolite/laterite ore:

  • Simple to deal with, with anticipated recoveries within the order of 96% for each saprolite and laterite ore sorts.
  • The ore is extraordinarily gentle (low hardness and abrasion), which can end in low energy requirement and low put on on liners and mill media.
  • Low deleterious components leading to low reagent use, and decrease working price.
  • Low oxygen demand which is not going to require oxygen sparging within the leach tanks.
  • Low reagent consumption.

In 2021, additional complete metallurgical exams had been carried out on the sulphides which beforehand weren’t examined. The check work concerned investigating the suitability of the processing route utilizing the flowsheet developed for saprolite/laterite and conducting variability exams. Outcomes obtained for sulphides confirmed the next:

  • The ore is straightforward to deal with with anticipated recoveries within the order of 95%.
  • The ore is medium onerous which can end in average milling energy demand.
  • Low deleterious components leading to low reagent use, and decrease working prices.
  • Low oxygen demand is not going to require oxygen sparging within the leach tanks.
  • Low cyanide and lime consumptions.

The proposed course of plant design is predicated on a confirmed and established gravity/carbon-in-leach (“CIL”) expertise, which consists of crushing, milling, and gravity restoration of free gold, adopted by leaching/adsorption of gravity tailings, elution and gold smelting, and tailings disposal. Providers to the method plant will embody reagent mixing, storage and distribution, water, and air companies. The plant will deal with 3 Mtpa of saprolite/laterite/sulphide ore to provide a mean of 100,000 ouncesper annum. The crushing and milling circuits shall be constructed in two phases: the primary part shall be to deal with oxide ore solely, adopted by a second part later within the lifetime of mine to deal with sulphides and/or a mix of sulphides and oxides.

When treating oxide ore, solely the first crushing stage shall be in use whereas three crushing levels shall be required when treating the sulphide ore. When treating saprolite/laterite, the milling circuit will make the most of a single-stage ball mill whereas a further secondary mill shall be added within the later a part of the mine life to deal with sulphides. The method plant was designed on the next ideas:

  • Simplified, compact course of plant, minimising the requirement of high-priced and lengthy lead front-end course of tools.
  • Simple to improve in future.
  • Easy to function and value efficient, by way of capital and working prices.
  • The flexibleness to exceed 100,000 ouncesper yr of output primarily based upon enter feed grade and tonnage.
  • Extremely versatile course of capable of deal with various ore grades and ore sorts with no vital improve in reagent consumption.

Determine 6: Course of Plant Flowsheet is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/9f1cbea8-2686-49eb-9ff7-9b9efcca93c4

Energy

Because of the comparatively poor electrical infrastructure within the area, tying into the nationwide grid shouldn’t be a possible answer. SENET subsequently undertook research to research the potential for a standalone 21 MW energy plant for the 2021 DFS.

An in-depth examine discovered that the event of a hybrid photo voltaic photovoltaic (“PV”), battery vitality storage system (“BESS”) and thermal energy plant funded by an Impartial Energy Producer (“IPP”) to be the most suitable choice. It will cut back the CAPEX required, reducing the preliminary funding because the tools is owned by the IPP an as well as lowers the operational threat with a really aggressive energy buy charge.

The inclusion of the hybrid photo voltaic PV together with the thermal energy plant is not going to solely save on vitality price however may even considerably cut back the mine’s environmental footprint within the area. The BESS will present further redundancy to the thermal plant and the system shall be absolutely built-in with mining operations to make sure de-risked mining income technology.

This feature is not going to solely praise AGG’s environmental technique, but in addition presents a possibility to cut back prices over the lifetime of the Kobada Gold Mission with improved reliability, cost-effectiveness, and redundancy to the overall energy necessities.

Highlights of the hybrid energy system embody vital emissions discount in comparison with a traditional thermal plant with:

  • 43% much less gas consumption,
  • 39% much less carbon dioxide,
  • 34% much less carbon monoxide,
  • 22% much less unburned hydrocarbons,
  • 39% much less sulfur dioxide and
  • 26% much less nitrogen oxides.

Along with the environmental advantages, the numerous gas offset from the renewable vitality part of the hybrid energy system additionally de-risks the mine in opposition to gas price fluctuations.

Water

Uncooked water provide shall be achieved by a mix of uncooked water abstraction from the Niger River, and supplementary water provide from the eight open pit outer perimeter dewatering boreholes.

The water from these provides shall be saved in a newly constructed 20,000 m3 uncooked water buffer dam situated mid-way between the method plant and the Niger River. The method plant shall characteristic further water storage amenities by way of a 3,500 m3 uncooked water pond, a ten,600 m3 course of water pond and a 4,500 m3 stormwater pond, respectively. Course of water shall be equipped by pumping supernatant water again from the TSF (as outlined beneath).

Tailings Administration

Epoch Assets (Pty) Ltd undertook the examine design related to the Tailings Storage Facility (“TSF”). The TSF is a HDPE lined, full containment valley kind association, with a LOM tailings storage requirement of 45.15 Mt at a deposition charge of three million dry tonnes every year. The TSF infrastructure features a slurry distribution pipeline, catchment paddocks, toe drain system, underdrainage system, curtain drain system, blanket drain system, answer assortment pipeline, assortment sumps and manholes, seepage cut-off trench, storm-water diversion trenches, emergency spillway, entry roads and perimeter fence-line. A floating barge decants supernatant tailings slurry water and stormwater from the TSF again to the plant.

The TSF is to be constructed in phases over the LOM, using open pit overburden materials, in 5 downstream lifts following the development of the preliminary starter embankment. The development of Section 1 has been cut up into Section 1A within the first yr of building and Section 1B within the second yr of building.

The total containment TSF design was adopted to take cognisance of the World Tailings Requirements and Worldwide Fee on Giant Dams Tailings Dams Security, the latter in draft standing, each seek advice from sturdy TSF designs and doubtlessly liquefiable tailings.

Accessibility and Transport/Logistics

SENET and Bolloré Logistics have undertaken surveys with detailed evaluation of entry routes to the Kobada mission web site for plant and tools in addition to ongoing manufacturing supplies and consumables.

Based mostly on the worldwide routes and local weather situations, in addition to dimension of cargo to be transported, both of the 2 main routes (i.e., from Abidjan or Dakar) shall be used for the mission to realize entry to Bamako and the Kobada web site. These routes are by way of:

  • Worldwide ports to Abidjan (Côte D’Ivoire) by sea, and Abidjan to web site by street freight (for containers).
  • Worldwide ports to Dakar (Senegal) by sea, and Dakar to web site by street freight (for irregular masses/break bulk).
  • Alternatively, worldwide airports to Bamako Airport (Mali) by way of business airways (for airfreight).

From Bamako, transportation of supplies and consumables to the location shall be by way of the present roads that hyperlink Bamako to Kobada village and the AGG camp comprising two distinct entry routes. The popular entry path to the Kobada web site is accessible in roughly 3–4 hour’s drive in a south-west route from Bamako. After crossing the Niger River by barge there may be roughly 8 km of untarred roads.

An alternate entry route from Bamako to the Kobada mine web site is by way of the RN7 (Bamako–Sikasso) for 80 km to the Sélingué street junction, thereafter a further 60 km of paved street to Sélingué. Thereafter there may be 52 km of laterite street to web site. The development of a brand new low-level bridge throughout the Fié River was addressed within the 2021 DFS and included within the capital expenditure.

Refining

There isn’t a gold refining functionality in Mali and thus doré produced at Kobada is to be refined exterior the nation, both in South Africa, Europe, or Dubai. Preliminary discussions have been held with refineries and though no agreements have been entered into, it’s anticipated that the doré shall be handled on the Rand Refinery in South Africa.

Environmental and Social Facets

ABS Africa (Pty) Ltd (“ABS Africa”), along with Africa and Enterprise Consulting Mali (“ABCOM”) and Insuco Restricted (“Insuco”), have been appointed to undertake an Environmental and Social Affect Evaluation (“ESIA”) for the Kobada Gold Mission. The ESIA for the Kobada oxides feasibility examine was accomplished throughout Q3 2021 and is presently awaiting approval. Delays to this had been because of the international coronavirus pandemic throughout 2020 and a part of 2021 and subsequent lockdowns which prevented neighborhood session going down. These consultations had been accomplished with overwhelming help for the Kobada Gold Mission, and the ultimate ESIA report has been submitted to the Malian Authorities. The evaluation included the enterprise of a collection of baseline research, in addition to the enterprise of an impression evaluation and related administration plan, along with the required session and disclosure course of.

Consultations with the related and affected events indicated constructive help for the mission, whereas the ESIA has been accepted by the related authorities, with the allowing course of being finalised.

An ESIA modification solely is required for the Kobada sulphide feasibility examine. Varied specialist research have been accomplished as a part of the sulphide feasibility examine, and the ESIA modification shall be commissioned and as soon as the oxide ESIA is authorized an environmental allow up to date.

Key Impacts

Key environmental and social impacts recognized up to now as half the ESIA course of, are summarized as follows:

  • Employment alternatives throughout the building and operational part. It will translate into an improved way of life for these employed and their households.
  • Nationwide, regional, and native companies and contractors will profit each immediately and not directly from Kobada Gold Mission-related building and operational actions because of the buy of products and companies.
  • Mission growth has the potential to supply elevated availability and alternative for a variety of abilities growth and job coaching, significantly for girls and native youth.
  • Throughout all of the phases of the Kobada Gold Mission, fee of dividends, tax on taxable earnings, royalties and floor lease will contribute to the fiscus.
  • Implementation of a Resettlement Motion Plan and Livelihood Restoration Plan for neighborhood members immediately affected by the mission infrastructure.
  • Impacts on the organic, bodily and social atmosphere that may be mitigated as a part of the Environmental and Social Administration Plan.

With the intention to obtain the suitable environmental administration requirements and be certain that the findings of the environmental research are applied by way of sensible measures, the suggestions from the ESIA have been used to compile an Environmental and Social Administration Plan (“ESMP”). The position of the ESMP is to help AGG in decreasing potential impacts and dangers and attaining its environmental aims in addition to fulfilling its dedication to the atmosphere. The ESMP shall be used to make sure compliance with environmental specs, monitoring and administration measures.

AGG will develop a collection of Environmental Motion Plans, in an effort to handle anticipated impacts as per the necessities of the IFC`s Sustainability Framework.

Capital Prices

The tables beneath summarize the estimated capital prices for the Kobada Gold Mission as estimated by the impartial consultants. These prices had been in virtually all instances constructed up from quotations and proposals from tools and repair suppliers.

The 2021 DFS prices presently make the most of a contractor owned and operated mining fleet. The contractor mining choice was discovered to be the popular choice for the mission given the decrease upfront capital price.

The method plant shall be developed in two phases; first part will allow processing of saprolite/laterite ore for the primary 7 years and extra crushing and milling capability shall be added to allow processing of sulphides and/or mix of oxides and sulphides.

The TSF shall be developed in 5 distinct phases comparable to “lifts” of the total containment dam wall. This has allowed for the prices to be allotted to the preliminary capital expenditure price range for the primary part and for sustaining capital for phases two and three.

All monetary evaluation for the lifetime of mine consists of the overall design, building and commissioning, manufacturing, sustaining and closure.

Description Capital Value Contingency Whole Capital Value
US$ US$ US$
Preliminary Capital
Mining Pre-Manufacturing and Institution 27,094,882 352,000 27,446,882
Plant and Infrastructure 82,883,293 5,788,140 88,671,434
TSF Section 1 26,750,301 2,675,030 29,425,331
Proprietor`s Value 14,198,934 2,150,949 16,349,883
Working Capital 4,348,043 434,804 4,782,847
Whole Preliminary Capex 155,275,453 11,400,924 166,676,377

Desk 4: Whole Preliminary Mission Capital Prices

Description Capital Value
US$
Mining 7,002,058
TSF Phases 2 and three 28,458,836
Mine Large -Resettlement 60,833,324
Mine Large-Rehab and Closure 25,435,654
Mine Large Publish Closure Prices 5,641,917
Whole Sustaining Capital 127,371,789

Desk 5: Whole Sustaining Mission Capital Prices

Determine 7: Capital Value Comparability is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/5bcb5942-2a47-482a-b3da-9801c005a88b

Working Money Prices

The next working money prices had been estimated and included into the monetary evaluation:

LOM
US$/t processed US$/oz
Mining 11.25 421.24
Processing 8.55 320.39
G & A 2.23 83.34
Refining & Transport 0.10 3.70
Royalties 1.40 52.46
Whole 23.53 881.13

Desk 6: Whole Working Money Prices LOM

“OPEX has elevated primarily based upon considerably increased international prices of metal and gas, which impacts energy technology and mining prices particularly. Mining prices have elevated by round $120/oz. The principle contributor to this improve is the extra direct price of mining waste and ore, accounting for roughly 50% of this improve. As well as, the impression of an prolonged lifetime of mine and the contractor overheads related to this, further grade management, and drilling and blasting prices in additional competent ore accounts for an additional 25% improve. Lastly, the impression of a rise in diesel price used as an enter parameter accounts for an additional 25% improve. Regardless of these international will increase the mission delivers a really spectacular post-tax free money stream of US$550 million,” commented Danny Callow, CEO of African Gold Group.

Monetary Evaluation

The Kobada Gold Mission monetary evaluation was ready utilizing the discounted money stream mannequin. In making ready this mannequin there have been a number of assumptions and materials elements which have been employed that are offered in Desk 7.

Description Unit Assumption
Income
Gold Worth US$/oz 1,750
Refining Losses % 0.08%
Low cost Fee % 5.0%
Gas Costs
Diesel Worth US$/L 0.797
HFO Worth US$/L 0.68
Fiscal
Authorities Royalty % 3%
Tax Vacation yrs 3
Tax Fee (after tax vacation) % of income 30%
Tax Fee if there may be loss % of annual turnover 1%
Dividend Tax % 10%
Depreciation % 10% over 10 years
Kilograms to Ounces kg/troy oz 32.1505
Diesel SG t/m3 0.85
HFO SG t/m3 0.97
Different Fees
Bullion Transport & Refining Prices US$/oz 3.70
Trade Charges Rand/US$ 14.50
US$/£ 0.93
US$/A$ 1.57
US$/C$ 0.81
CFA/€ 655
CFA/US$ 561

Desk 7: Monetary Mannequin Assumptions

The findings of the mannequin are summarized in Desk 8.

DESCRIPTION PRE-TAX AFTER TAX
LOM Tonnage Ore Processed t (000) 45,028 45,028
LOM Feed Grade Processed g/t 0.868 0.868
Manufacturing Interval yrs 16 16
LOM Gold Restoration % 95.6% 95.6%
LOM Gold Manufacturing Oz (000) 1,202 1,202
LOM Payable Gold After Refining Losses Oz (000) 1,201 1,201
Gold Worth US$/oz 1,750 1,750
Income US$ million 2,102 2,102
LOM Working Prices US$/oz 881 881
AISC US$/oz 972 972
NPV US$ million 506 355
IRR % 44.8% 37.6%
Low cost Fee % 5.0% 5.0%
Discounted Payback Interval Years 2.33 2.33
Mission Web Money US$ million 773.1 549.9

Desk 8: Abstract of Monetary Findings

Determine 8: Money Circulation Projections is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/d280160c-5202-44c8-8bfe-c73282ed0593

The next tables element the NPV and IRR sensitivities of the mission to gold worth, CAPEX, OPEX, restoration and feed grade. Earlier than these the sensitivity evaluation percentages are proven.

Determine 9: NPV and IRR Sensitivities is accessible at https://www.globenewswire.com/NewsRoom/AttachmentNg/7958c9a9-30fc-49d3-a4e6-97cc04a4020a

Average Gold Price (US$/oz) US$/oz 1,488 1,575 1,750 1,925 2,013
NPV @ 5% (After Tax) US$M 191 246 355 465 520
IRR % 23.2% 28.1% 37.6% 47.0% 51.7%
Cash Flow Payback Years 3.87 3.22 2.33 1.76 1.55
Maximum Funding US$M 170.29 169.99 169.37 168.76 168.46

Table 9: Key project metric sensitivity to gold price

NPV @ 5% (After Tax) Discount Rate
US$M 0% 5% 10%
Ave Gold Price US$/oz 1,488 324 191 109
1,575 399 246 150
1,750 550 355 234
1,925 700 465 317
2,013 776 520 359

Table 10: Gold price and discount rate sensitivity analysis

NPV @ 5% (After Tax) Average Gold Price (US$/oz)
US$M 1,488 1,575 1,750 1,925 2,013
Average Head Grade g/t 0.738 46 93 189 281 328
0.782 95 145 244 343 392
0.868 191 246 355 465 520
0.955 286 346 466 587 648
0.999 333 396 522 648 712

Table 11: Gold price and head grade sensitivity analysis

NPV @ 5% (After Tax) Average Gold Price (US$/oz)
US$M 1,488 1,575 1,750 1,925 2,013
Change in OPEX -15% 272 327 436 546 601
-10% 246 300 409 519 574
0% 191 246 355 465 520
10% 136 192 301 411 466
15% 108 164 275 384 439

Table 12: Gold price and operating costs sensitivity analysis

NPV @ 5% (After Tax) Average Gold Price (US$/oz)
US$M 1,488 1,575 1,750 1,925 2,013
Change in CAPEX -15% 214 268 377 487 542
-10% 206 261 370 480 535
0% 191 246 355 465 520
10% 177 231 341 450 505
15% 169 224 333 443 498

Table 13: Gold price and capital costs sensitivity analysis

NPV @ 5% (After Tax) Average Gold Price (US$/oz)
US$M 1,488 1,575 1,750 1,925 2,013
Recovery % 80.6% 49 96 192 285 332
85.6% 96 147 246 345 394
95.6% 191 246 355 465 520
96.6% 201 256 366 477 532
98.6% 210 265 377 489 545

Table 14: Gold price and percentage recovery sensitivity analysis

Project Opportunities

The DFS has been completed based upon drilling of only 4 km of the main shear zone. Several other geologically similar shear zone structures totalling more than 55 km have been identified on the concession and these are yet to be drilled. There exists a significant opportunity to increase the size of the measured and indicated resource through targeted limited infill drilling in the inferred resources which would be an opportunity to increase mine life.

The Company, with the assistance of SENET, has advanced the engineering of the project past the level that is required for a DFS. A large part of the process plant is designed to a detailed engineering level, including earthworks and civil engineering drawings issued for construction. Ongoing schedule optimization may result in reducing the construction schedule and bringing first gold forward by a number of months.

Development Timetable

Construction of the process plant and associated infrastructure including Phase 1 of the TSF for the Kobada Gold Project is expected to take 19 months. First gold will be achieved where after the process plant will be ramped up to produce nameplate capacity within the following 2 production months. The mine is designed with ease of construction and operation as a priority. The simplified and compact process plant flowsheet minimizes the requirement for expensive and long lead process equipment, thereby substantially reducing the construction time.

“Utilising known technology to develop a robust plant flowsheet suitable for West African conditions, yet simple and flexible in design, has allowed us to fast-track the development of the engineering to a stage where much of the plant is now at detailed design level. This allows us to shorten the schedule significantly and save on engineering costs” says Danny Callow, Chief Executive Officer of AGG.

The Company also intends to outsource key specialised components of the plant from the best-in-class providers, including a state-of-the-art hybrid, solar PV, thermal and BESS, fuel storage and supply, and the mining and TSF contract.

Qualified Person

This DFS was prepared under the supervision of Nick Dempers, Principal Process Engineer at SENET and a “Qualified Person,” as such term is defined in NI 43-101.
The contents of this press release have been reviewed and approved by:

  • Nicholas Dempers, MSc Eng (Chem), BSc Eng (Chem), BCom (Man), Pr.Eng (RSA), Reg.No 20150196, FSAIMM (RSA), Principal Process Engineer of SENET (Pty) Ltd with respect to processing and infrastructure,
  • Uwe Engelmann, BSc (Zoo. & Bot.), BSc Hons (Geol.), Pr.Sci.Nat. No. 400058/08, MGSSA, a director of Minxcon (Pty) Ltd. with respect to mineral resources,
  • Ghislain Prévost, BSc Eng. (Mining), MScA Eng. (Mining) and P. Eng. (OIQ #119054), a Principal Mining Engineer with DRA Americas Inc. with respect to mineral reserves and mining methods,
  • Guy John Wild, BSc Eng., MSc Eng. and P. Eng (#940269), a Director and Senior Tailings Dam Engineer at Epoch Resources with respect to the tailings dam,
  • Stephanus Coetzee, B.Sc Hons (Environmental Management), Pr.Sci.Nat. No 40044/04, Director of ABS Africa with respect to the ESIA.

Each of the aforementioned individuals are independent Qualified Person as defined by NI 43-101.

About African Gold Group

African Gold Group is a TSX Venture Exchange (TSX-V: AGG) listed exploration and development company with a focus on building Africa’s next mid-tier gold producer. The Company has a highly experienced board and management team with a proven track record in the African mining sector operating mines from development through to production. AGG’s principal asset is the Kobada Project in southern Mali, which is in an advanced stage of development having completed the 2020 DFS and is targeting gold production of 100,000 oz per annum. As well as the initial Kobada Gold Project, other exploration locations have been identified on the Kobada, Farada and Kobada Est concessions, offering potential for an increase in resource. For more information regarding African Gold Group visit our website at www.africangoldgroup.com.

For more information:

Cautionary statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, statements regarding, the 2021 DFS, production potential and economics of the Project, upside potential of the Project, drilling and exploration plans of the Company, mine plan, mine schedule, processing of materials, power and water infrastructure, tailings management, logistics, refining, environmental and social aspects, key impact, capital costs, operating costs, financial metrics, project opportunities and development timetable with respect the Project. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.  Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of AGG to be materially different from those expressed or implied by such forward-looking information, including but not limited to: receipt of necessary approvals; general business, economic, competitive, political and social uncertainties; future prices of mineral prices; accidents, labour disputes and shortages; available infrastructure and supplies; the COVID-19 pandemic and other risks of the mining industry. Although AGG has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. AGG does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE. 

African Gold Group Publicizes Up to date DFS With 66% Reserve Improve and 100koz per 12 months for First 10 Years African Gold Group Publicizes Up to date DFS With 66% Reserve Improve and 100koz per 12 months for First 10 Years

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