16th Sep 2015 08:40
LONDON (Alliance News) - Hummingbird Resources PLC Wednesday said it has received a "positive" preliminary report from an independent consultancy firm for the proposed hydro-electric power plant that will power the company's Dugbe gold project in Liberia.
"We are highly encouraged by the preliminary study for the development of a hydro-electric plant in south-eastern Liberia which, if developed, will enable a sustainable and low-cost source of power for our Dugbe gold project and secure a source of domestic power supply for the local region," said Chief executive Dan Betts.
The report was conducted by Knight Piesold Consulting for the power plant, which will lie around 10 kilometres away from the Dugbe project if built.
The development follows the signature of a collaboration agreement for the funding and development of the hydro-electric power plant back in April with IFC InfraVentures, the IFC Global Infrastructure Project Development Fund, and Aldwych International.
Hummingbird said the report has suggested a range of hydropower options that would be highly beneficial in the development of a sustainable and low-cost source of power for the Dugbe gold project, as well as the south-east Liberian region.
The report suggests building a plant on the Dugbe river would allow the plant to continue to be used by the local region long after the Dugbe gold project shuts down.
The report analysed four alternative options for a plant. The Dugbe project is considered to need 16.0 megawatts of power whilst the local region is thought to need around 20.0 to 30.0 megawatts of power during peak demand.
The report looked at a 30.0 megawatt project, generating power from three channels from the Dugbe and Botou rivers and Geebo Creek which would cost around USD169.5 million to build and a 25.0 megawatt project generating power from just the Dugbe and Botou rivers at a cost of USD141.2 million.
The third option was for a 20.0 megawatt project generating power just from the Dugbe river at a capital cost of USD108.8 million and the fourth was for a 15.0 megawatt project generating power just from the Dugbe river at a cost of USD90.0 million.
Hummingbird said further hydrological studies and topographic mapping will be conducted before finalising a pre-feasibility assessment for the plant. That study is expected to be secured in the second quarter of 2016, it said in a statement.
The USD265,000 study will be funded by IFC InfraVentures as per the terms of the collaboration agreement.
The Dugbe project is expected to initially produce 125,000 ounces of gold once in production and has a net present value of USD186.0 million and an internal rate of return of 29% based on a gold price of USD1,300 per ounce.
Gold was trading at USD1,107 per ounce on Wednesday morning.
Hummingbird shares were up 1.0% to 25.50 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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