22nd Jul 2015 07:08
LONDON (Alliance News) - Gemfields PLC Wednesday said it has received the competent persons report for the Montepuez ruby mine in Mozambique, which includes a maiden JORC mineral resource estimate and ore reserve.
The report has defined the mines indicated and inferred mineral resource as 467 million carats of ruby and corundum at a grade of 62.3 carats per tonne of ore with probable ore reserves totalling 432 million carats at a diluted grade of 15.7 carats per tonne.
Of the total miner resource, indicated resources contributes 423 million carats whilst the inferred resource totals 44 million carats.
In terms of the economics of the project, the mine is expected to have a 21 year life of mine to produce a total of 432 million carats, with mining capacity expected to start at 3.3 million tonnes of ore per annum before increasing to 5.6 million tonnes by July 2017 whilst processing capacity will start at 400,000 tonnes per year before rising to 1.3 million tonnes by July 2016.
The projected real cash flow of the project over the 21 year period is estimated to be around USD2.76 billion. The post-tax net present value of USD996 million is accompanied by an internal rate of return of 311.7%.
Capital expenditure will total USD64 million overt the first two years of the project, rising to USD305 million over the entire 21 year period.
The report was conducted by SRK Consulting (UK) Ltd.
Gemfields has a 75% stake in Montepuez, with the remaining 25% stake being owned by local partners, Mwiriti Limitada.
"As the first recorded mineral resource and ore reserve statement for Montepuez, the significance of this report is not only a milestone event that bares testament to the quality of work carried out by SRK and the expertise from within the Gemfields team, but provides further evidence to the continued growth, positive momentum and opportunity inherent within the coloured gemstone sector," said Chief Executive Ian Harebottle.
"As I have said on many occasions over the past few years, this is still just the very beginning, with much more yet to come," he added.
Gemfield shares were up 4.7% to 61.00 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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