29th May 2014 11:09
LONDON (Alliance News) - Red Rock Resources PLC Thursday said it has received a positive preliminary technical and economic assessment on the Nyanza deposit on the Migori project in Kenya, including forecast production of about 80,000 ounces of gold over nine years and projected life of mine revenue from gold sales of USD95 million, assuming a gold price of USD1,200 an ounce.
In a statement, the company said the highlights from the report also included a prediction that a capital cost of USD3 million was recoverable within the first six months of the mine operating. The assessment, which was looking at the viability of mining the deposit as a stand-alone open pit mine, said the option gave a pretax net present value of USD8 million at a 10% discount rate.
"The results of this Technical Assessment indicate that the Nyanza pit is a potentially robust project and we will continue to work on cost optimisation as we continue our studies," Chairman Andrew Bell said in a statement.
"Red Rock Resources will proceed with its objectives of upgrading and expanding existing Mineral Resources at Nyanza in parallel with further feasibility phases as well as continuing greenfield exploration," he added.
The technical and economic assessment is the first stage towards getting a so-called bankable feasibility study for a project. The bankable feasibility study is required to secure financing for a project.
Red Rock Resources currently has a 15% direct and 32.27% indirect interest in the Migori project, but will acquire a 60% direct interest when the full bankable feasibility study is completed.
The company's shares were up 6.3% at 0.255 pence Thursday.
By Steve McGrath; [email protected]; @SteveMcGrath1
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