TIDMKAT
RNS Number : 3312X
Katoro Gold PLC
04 May 2021
Katoro Gold plc (Incorporated in England and Wales )
( Registration Number: 9306219)
Share code on AIM: KAT
ISIN: GB00BSNBL022
("Katoro" or "the Company")
04 May 2021
Katoro Gold plc ('Katoro' or the 'Company')
BLYVOOR GOLD TAILINGS PROJECT: CPR RESULTS
Katoro Gold plc (AIM: KAT), the AIM listed gold and nickel
exploration and development company, is pleased to announce the
results of a comprehensive Competent Person's Report ("CPR"), that
reports on the results and findings of additional technical and
financial work that was conducted on the Blyvoor Gold Tailings
Project ("the Project") in response to the recommendations and
findings of the Blyvoor Scoping Study announced in RNS dated: 07
May 2020 and 4 March 2021. Katoro is currently in the processes of
finalizing a comprehensive funding package in accordance with the
Blyvoor Joint Venture ("the JV") that will allow the construction,
commissioning and operation of a mining and processing facility
capable of processing 500,000 tonnes of tailings material per
month, at an average Life of Mine ("LoM") gold grade of 0.29 g/t
and confirmed recovery of 51%, before incorporating recovery gains
from the latest metallurgical optimization tests. The optimization
results indicated that overall recoveries of up to 60% can be
achieved by milling the coarser fraction (+75um) of the feedstock
which comprises around 30% of the total Run of Mine ("RoM").
The findings of the CPR were subject to the results of the
confirmatory and optimization metallurgical test work. Following
receipt of all the outstanding metallurgical test results, the
Company is now able to validate the findings of the CPR and further
engage with prospective funders towards conclusion of funding
arrangements as set out above.
The CPR comprises an advanced Pre-Feasibility level study, a
SAMREC compliant reserve and resource statement, and a South
African Mineral Asset Valuation ("SAMVAL") report for Blyvoor TSF
1, 6 and 7 and Doornfontein TSF 1, 2 and 3 gold tailings storage
facilities.
Note: Previous technical work on the Project was reported in
RNS's dated 15 December 2020 (Resource Results) as well as 30
September, 16 November, and 30 November 2020, (General Updates)
respectively.
Highlights CPR
-- Total project resource size of 1,410,000 oz gold consisting
500,000 oz gold in the measured category (35.5%), 368,000 oz gold
in the indicated category (26.1%), and 542,000 oz gold in the
inferred category (38.4%) (Table 1)
-- TSF 6 and 7 was upgraded to Probable Reserve status
containing 424,000 oz gold and 392,000 oz gold, respectively (Table
2).
-- The mine plan includes 1,325,822 oz gold after applying a 2%
dilution factor, a 95% Mine Call Factor, and accounting for 1% ore
losses.
-- The CPR demonstrates (before incorporation of the results of
the recent metallurgical optimization work):
-- An unlevered Project Net Present Value ('NPV@7.9%') of US$
114 million, a 33% Internal Rate of Return ('IRR') and a Return on
Investment ('ROI') of 64%;
-- LOM of 25 years building to a production capacity of 500,000
tons per month with an overall production of 675, 842 ounces of
gold over LOM;
-- Low-cost operation:
-- With an estimated All-in Sustaining Cost ('AISC') of US$861 per ounce of gold;
-- All-in Cost ('AIC') of US$1,067 per ounce of gold;
-- Total Project capital costs of US$152m across the life of the Project, and
-- Peak funding requirement of US$69m.
-- The study utilised an average gold price of US$1,610 per
ounce compared to the current price of c. US$1,800 per ounce;
-- Additional metallurgical test work confirmed the current
grade vs. recovery model from previous technical studies and no
further metallurgical test work is required;
-- Optimization studies revealed that by milling a portion of
the feedstock (with coarser size fraction (+75 um)), overall
recovery can be increased up to c. 60% from the current confirmed
51% average recovery over LoM and 53.5% for the reserve (TSF 6 and
7); and
-- Following rigorous independent review, evaluation, and
assessment, the Project demonstrates robust technical and economic
viability.
Louis Coetzee, Executive Chairman of Katoro, said: "We are
extremely satisfied and pleased with the results of the projects
thus far. Completion of technical work was delayed substantially by
repeated COVID - 19 restrictions in South Africa, but at the same
time allowed for better and more detailed review and optimization
work to be done.
The completion of the technical work and especially the
independent SAMVAL valuation of the project once again confirms
that the project is very robust in all aspects and puts the Company
in a very strong position to finalize funding discussions as set
out above. We are now in the process of determining to what extent
the higher recovery rates may improve the already robust project
economics and will be updating the market in this regard in due
course".
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014.
CPR key outcomes and discussion
CPR Element Findings
Project Financials For the total resource, the Study demonstrated
an unlevered Project Net Present Value ('NPV@7.9%')
of US$ 114 million, and a 33% Internal Rate
of Return ('IRR') and a Return on Investment
('ROI') of 64%.
Total estimated free cash flow of US$257.4m
across the life of the Project.
Note - The study utilised:
* An average exchange rate of ZAR 17.02/USD over life
of project.
* An average gold price of US$1,610 per ounce over life
of project.
Capital Cost The Project has a peak funding requirement
of US$69m ( ZAR1.183 billion, comprising of
ZAR1.177 billion capital and ZAR6 million rehabilitation
premiums) in the construction year (Year 0),
with a payback period of 2.6 years from the
start of production.
Note - The study utilised:
* Capital estimates based on PFS level designs,
utilising supplier quotations and benchmarking.
Operational Cost The AISC was calculated as ZAR69/feed t which
translates to US$861/oz
The AIC was calculated as ZAR85/feed t which
equates to US$1,067/oz
Note - The study utilised:
* Mining operating costs have been obtained from mining
contractors. A 20% contingency has been applied to
the selected contractor operating cost to make
provision for the required level of accuracy.
* On-mine overheads operating costs estimated from
first principles, utilizing supplier quotations and
benchmarking.
* Processing operating costs estimated from first
principles, utilizing supplier quotations and
benchmarking.
* Tailings operating costs estimated from first
principles, utilizing supplier quotations and
benchmarking.
Mineral Reserve Total resource size of 1,410,000 oz gold of
and Resource which 500,000 oz gold is measured status (35.5%),
368,000 oz gold is indicated status (26.1%),
and 542,000 oz gold is in inferred status (38.4%)
(Table 1).
TSF 6 and 7 was upgraded to Probable Reserve
status containing 424,000 oz gold and 392,000
oz gold, respectively (Table 2).
Total ounces in mine plan are 1,325,822 oz
gold after applying a 2% dilution factor and
a 95% Mine Call Factor, and accounting for
1% ore losses.
* Mineral Resource estimates were conducted and
reported in accordance with the requirements of the
SAMREC Code.
* TSFs No. 6 and 7 contain mostly Measured and
Indicated Mineral Resources and the resource
estimation component is at Definitive Feasibility
Study level.
* TSF No.1, Doornfontein TSF's No. 1, 2 and 3 are only
Inferred and are thus at Scoping Study level
* Mineral Reserve estimates have been completed in
accordance with the requirements of the SAMREC Code.
* Measured and Indicated Mineral Resources have been
converted into Probable Mineral Reserves. Additional
work is required to upgrade Probable Mineral Reserves
to Proven Mineral Reserves.
Table 1: Mineral resource statement for Blyvoor Gold Mine TSFs
effective 22 January 2021.
The operator for the Project is the Katoro Joint Venture.
TSF Mineral Resource Total 50% Attributable to Katoro
Classification
Tonnes Grade Au Content Tonnes Grade Au Content
-------- -------- ------ ------------
Mt g/t koz Mt g/t koz
-------- ------- ------------ -------- ------ ------------
TSF No. 6 Measured 30.5 0.32 318 15.25 0.32 159
------------------------ -------- ------- ------------ -------- ------ ------------
TSF No. 7 Measured 18.0 0.31 182 9.0 0.31 91
------------------------ -------- ------- ------------ -------- ------ ------------
Total Measured 48.5 0.32 500 24.25 0.32 250
-------- ------- ------------ -------- ------ ------------
TSF No. 6 Indicated 13.9 0.30 134 6.95 0.30 67
------------------------ -------- ------- ------------ -------- ------ ------------
TSF No. 7 Indicated 21.0 0.35 234 10.5 0.35 117
------------------------ -------- ------- ------------ -------- ------ ------------
Total Indicated 34.9 0.33 368 17.45 0.33 184
-------- ------- ------------ -------- ------ ------------
Total Measured and Indicated 83.5 0.32 868 41.75 0.32 434
-------- ------- ------------ -------- ------ ------------
TSF No. 1 Inferred 7.2 0.25 58 3.6 0.25 29
----------------------- -------- ------- ------------ -------- ------ ------------
TSF No. 6 Inferred 0.5 0.25 4.1 0.25 0.25 2.05
----------------------- -------- ------- ------------ -------- ------ ------------
TSF No. 7 Inferred 0.7 0.52 12 0.35 0.52 6
----------------------- -------- ------- ------------ -------- ------ ------------
Doornfontein TSF No. 1 Inferred 23.7 0.31 234 11.85 0.31 117
----------------------- -------- ------- ------------ -------- ------ ------------
Doornfontein TSF No. 2 Inferred 9.3 0.32 96 4.65 0.32 48
----------------------- -------- ------- ------------ -------- ------ ------------
Doornfontein TSF No. 3 Inferred 18.1 0.24 137 9.05 0.24 68.5
----------------------- -------- ------- ------------ -------- ------ ------------
Total Inferred 59.5 0.28 542 29.75 0.28 271
-------- ------- ------------ -------- ------ ------------
Notes:
No cut-off applied.
No geological loss applied.
Mineral Resources are stated inclusive of Mineral reserves.
Mineral Resources are reported as total Mineral Resources and are not attributed.
Table 2: Blyvoor TSF No.6 and TSF No.7 Mineral Reserve
estimation effective 22 January 2021.
The operator for the Project is the Katoro Joint Venture.
TSF Mineral Total 50% Attributable to Katoro
Reserve
Classification
Tonnes Grade Au Content Tonnes Grade Au Content
------- ------ ----------- -------- ------- ------------
Kt g/t koz Kt g/t koz
------- ------ ----------- -------- ------- ------------
TSF No.6 Probable 44,860 0.29 424 22,430 0.29 212
----------------- ------- ------ ----------- -------- ------- ------------
TSF No.7 Probable 39,408 0.31 392 19,704 0.31 196
----------------- ------- ------ ----------- -------- ------- ------------
Total Probable 84,276 0.30 816 42,138 0.30 408
----------------- ------- ------ ----------- -------- ------- ------------
Notes:
No Mineral Reserve cut-off applied.
Mineral Reserves are reported as total Mineral Reserves and are
not attributed
Grade and Recovery Recent metallurgical test work confirmed historical
results and the recovery utilized in the CPR
and Valuation of 51% over LoM and 53.5% for
the reserve (TSF 6 and 7).
Further optimization tests revealed that significant
increased recovery of up to 60% can be obtained
by milling the coarser fraction of the Run
of Mine before leaching. Process design trade
off studies are currently being completed to
understand the exact impact of this on the
project economics.
Next Steps Sufficient work has been completed to enter
the detailed design phase with Mining, TSF
and Plant contractors. The high-level next
steps are:
* Preparation of scope for bidding documents for
Contractors by Owners Engineer.
* Bidding and Evaluation.
* Final Detailed designs
* Construction
* Operation
Review by Qualified Persons
Information in this announcement that relates to the Blyvoor
Mineral Resource is taken from the report titled "
P20-006a_Katoro_BlyvoorTSF_CPR_Final" date 22 January 2021 (the
"Report"). The Report contains a SAMREC-compliant Mineral Resource
estimate, PFS and SAMVAL and was prepared for the Katoro TSF Gold
Project (Blyvoor Joint Venture) in which Katoro Gold plc holds a
50% attributable interest. The Competent Person responsible for the
submission of this document is Mr Daniel (Daan) van Heerden
(Director, Minxcon): B Eng (Min.), MCom (Bus. Admin.), MMC, Pr.Eng.
(Reg. No. 20050318), FSAIMM (Reg. No. 37309), AMMSA. Mr van Heerden
has worked in the mining industry for over 30 years. He has
extensive experience in managing underground and open cast mining
operations in South Africa and abroad for world-class mining majors
and junior mining companies. He was responsible for new business
development for two major mining companies and has experience in
mining mergers and acquisitions. He is currently heading the Mining
Engineering division of Minxcon, where he is integrally involved in
activities such as valuation, due diligence, finance structuring,
change management required post the event, feasibility studies,
life of mine plans, technical reviews and writing of technical
reports for various commodities.
Information contained in this announcement has also been
reviewed by Mr. Noel O'Keeffe, geologist, BSC. P.Geo, who is a
Member of the Institute of Geologists of Ireland. Mr. O'Keeffe has
several years' experience in the evaluation of gold projects.
**S**
For further information please visit www.katorogold.com
Bhavesh Patel +44 20 3440 6800 RFC Ambrian Limited Nominated Adviser
Andrew Thomson
---------------- ----------------- -------------------- -------------------
Nick Emmerson +44 (0) 1483 413 SI Capital Ltd Broker
Sam Lomanto 500
---------------- ----------------- -------------------- -------------------
Isabel de Salis +44 (0) 20 7236 St Brides Partners Investor and Media
Beth Melluish 1177 Ltd Relations Adviser
Glossary of Technical Terms
Au Chemical symbol for gold
"Cut-off The cut-off grade is the level below which material
grade" within an ore body does not contain sufficient value
to economically justify processing into a final saleable
form
------------------------------------------------------------------
"density" Measure of the relative "heaviness" of objects in terms
of constant
volume. Density =-mass/volume
------------------------------------------------------------------
"g" Gram - a metric unit of weight
------------------------------------------------------------------
"g/t" Grams per metric tonne - a measure of weight of the
economic mineral (e.g. gold) is in each metric tonne
of material to be mined
------------------------------------------------------------------
"Indicated That part of a mineral resource for which tonnage,
Mineral densities, shape, physical characteristics, grade and
Resource" quality can be estimated with a moderate level of confidence.
Based on exploration, sampling and testing information
gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill-holes.
The data-point locations are appropriate to confirm
physical continuity, while they are too widely or inappropriately
spaced to confirm quality continuity. However, such
locations are spaced closely enough for quality continuity
to be assumed.
------------------------------------------------------------------
"Inferred That part of a mineral resource for which tonnage,
Mineral grade and quality can be estimated with a low level
Resource" of confidence. It is inferred from geological evidence
and assumed but not verified physical continuity with
or without coal quality continuity. Based on exploration,
sampling and testing information gathered through appropriate
techniques from locations such as outcrops, trenches,
pits, workings and drill-holes which is limited or
of uncertain quality or reliability.
------------------------------------------------------------------
"kg" Kilogram (one thousand grams) - a measure of weight
------------------------------------------------------------------
"koz" One thousand ounces - a measure of weight
------------------------------------------------------------------
"m" A metre - a measure of length or thickness
------------------------------------------------------------------
"Measured A Measured Mineral Resource is that part of a Mineral
Mineral Resource for which quantity, grade or quality, densities,
Resource" shape, and physical characteristics are estimated with
confidence sufficient to allow the application of Modifying
Factors to support detailed mine planning and final
evaluation of the economic viability of the deposit
------------------------------------------------------------------
"Mineral A "Mineral Resource" is a concentration or occurrence
Resource of diamonds, natural solid inorganic material, or natural
solid fossilised organic material including base and
precious metals, coal, and industrial minerals in or
on the Earth's crust in such form and quantity and
of such a grade or quality that it has reasonable prospects
for economic extraction. The location, quantity, grade,
geological characteristics, and continuity of a Mineral
Resource are known, estimated or interpreted from specific
geological evidence and knowledge.
------------------------------------------------------------------
"Mt" Abbrev. for megaton (measure of weight). Equals 1 million
tonnes
------------------------------------------------------------------
"Probable "Probable Mineral Reserve" is the economically mineable
Mineral material derived from a Measured or Indicated Mineral
Reserve" Resource or both. It is estimated with a lower level
of confidence than a Proved Mineral Reserve. It includes
diluting and contaminating materials and allows for
losses that are expected to occur when the material
is mined. Appropriate assessments to a minimum of a
Pre-Feasibility Study for a project or a Life of Mine
Plan for an operation must have been carried out, including
consideration of, and modification by, realistically
assumed mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors.
Such modifying factors must be disclosed (SAMREC definition).
------------------------------------------------------------------
"Proved A "Proved Mineral Reserve" is the economically mineable
Mineral material derived from a Measured Mineral Resource.
Reserve" It is estimated with a high level of confidence. It
includes diluting and contaminating materials and allows
for losses that are expected to occur when the material
is mined. Appropriate assessments to a minimum of a
Pre-Feasibility Study for a project or a Life of Mine
Plan for an operation must have been carried out, including
consideration of, and modification by, realistically
assumed mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors.
Such modifying factors must be disclosed. (SAMREC definition).
------------------------------------------------------------------
"SAMREC" South African Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves
------------------------------------------------------------------
SAMVAL South African Code for the Reporting of Asset Valuations
------------------------------------------------------------------
"t" A metric tonne - a measure of weight
------------------------------------------------------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
DRLDZGGKRFLGMZM
(END) Dow Jones Newswires
May 04, 2021 02:00 ET (06:00 GMT)
Katoro Gold (LSE:KAT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Katoro Gold (LSE:KAT)
Historical Stock Chart
From Apr 2023 to Apr 2024
