Robex Resources Inc./Nampala: Feasibility Study Reveals a Pre-Tax Net Present Value (NPV) of $113.6 Million at $1,250 Gold Price Per Ounce, and an Internal Rate of Return (IRR) of 46.45%
QUEBEC CITY, QUEBEC -- (Marketwire) -- 11/08/11 -- Robex Resources inc. (TSX VENTURE: RBX)(FRANKFURT: RB4) is pleased to announce the excellent results of the feasibility study for its 100%-owned Nampala project located on the Mininko permit in Mali. The feasibility study was prepared by a consortium of prominent internationally renowned mining industry consultants lead by the engineering consulting firm Bumigeme assisted by engineering firm Met-Chem Canada (Met-Chem) and Mr. Jacques Marchand, independent engineer and qualified person (QP) for mineral resource estimation as defined by NI 43-101.
Highlights of the feasibility study are as follows (all currency in US dollars):
-- At $1,250 gold price per ounce (base case), pre-tax net present value
(NPV) of $113.6 million, discounted at 5%, and an internal rate of
return (IRR) of 46.45% (100% equity basis) and a two (2) year payback
period;
-- Using near-current spot price for gold of $1,600 per ounce, a pre-tax
NPV of $207.6 million, at 5% discount rate, and IRR of 73.70%;
-- Initial eight-year mine life at a mill throughput of 5,200 tonnes per
day utilizing conventional open-pit mining and a limited crushing-
grinding with CIL recovery of gold; after eight (8) years, depending on
market conditions, two (2) more years of processing low-grade stockpiled
ore;
-- Production average of 39,327 ounces per year (recoverable gold) for the
initial eight-year mine life;
-- At $1,250 gold price per ounce (base case), total estimated earnings
before interest, taxes, depreciation and amortization (EBITDA) of $206.3
million;
-- Average cash operating cost of $585 per ounce for the initial eight-year
mine life; ($640 average if low grade stockpile is processed in years 9
and 10);
-- Estimated low start-up capital of $52.9 million (excludes Owners Costs);
-- Average gold recovery rate of 88%;
-- Low strip ratio of 0.55:1;
-- Low rate of cyanide consumption;
-- Proven and probable open-pit reserves of 17.3 million tonnes at 0.70
grams per tonne gold for a total of 392,520 ounces of gold (345,418
ounces of recoverable gold at 88% average recovery rate);
-- Potential for future conversion of resources to reserves and further
resource growth.
Commenting on the feasibility, President and CEO Andre Gagne said: 'We have in less than three years transformed Robex from being an ill-funded exploration stage company to the position of now having the opportunity to become a near-term gold producer with an expected annual gold production around the 40,000 oz level. The Nampala feasibility study shows robust economics generating an estimated EBITDA of $206.3 million with a discounted pre-tax net present value of $113.6 million and an IRR of 46.45% using the base case parameters of $1 250 per ounce of gold and a 5% discount rate. Using near-current spot price for gold of $1,600 per ounce, the Nampala project economics improve substantially with a pre-tax NPV of $207.6 million, an IRR of 73.70% and an estimated EBITDA of $324.8 million. In addition to these already impressive figures, the Nampala project offers significant upside on resource and reserve growth and, to this end, a work program is beginning to test the large, mostly unexplored, 2.4km extension to the south of the existing Nampala resource. We are very proud that, in such a short time span, we were able to deliver a positive feasibility study and we are very grateful to the Mali Government and the Mining Authorities for their support and consideration. This study will immediately be submitted to the proper Authorities in Mali as we await the issuance of the mining license'.
The table below presents a list of the project parameters taken from the feasibility study:
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Total tonnes ore mined (Mt) - including processing of
low-grade ore during years 9 and 10 17.3 million tonnes
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Open-pit ore processing rate (Mt) 5,200 tonnes per day
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Average mill feed gold grade (first 8 years) 0.77 g/t
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Average mill feed gold grade - including processing of
low-grade ore during years 9 and 10 0.70 g/t
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Gold recovery rate 88%
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Life of mine (LOM) 8 years
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Life of mine (LOM) - including processing of low-grade
ore during years 9 and 10 10 years
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Total contained gold ounces 392,520 ounces
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Total gold production (recovered gold) - including
processing of low-grade ore during years 9 and 10 345,418 ounces
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Average annual gold production (first 8 years) 39,327 ounces
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Capital costs (CAPEX) $52.9 million
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Cash operating cost (per tonne) $12.75 per tonne
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Cash operating cost (per recovered ounce-first 8 years)$585 per ounce
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Cut-off grade 0.3 g/t
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Average strip ratio 0.55:1
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The base case uses a price for gold of $1250 per ounce and a cut-off grade of 0.3 g/t which results in 17.35 Mt of ores at an average grade of 0.7 g/t being fed to the concentrator over a 10 year period, including the processing of low-grade ore during years 9 and 10. The project generates a pre-tax NPV of $113.6 M, at a 5% discount rate, with an internal rate of return of 46.45 %. Cash operating costs were estimated at $585 per ounce for the initial eight-year mine life (No by-product credit was accounted for silver which averages 0.46 g/t in ore).
The table below outlines the pre-tax NPV and IRR sensitivity to gold price as well as the estimated EBITDA and payback period at each gold price level:
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Pre-tax Pre-tax Pre-tax
Gold price NPV at 5% IRR EBITDA Payback period
(per ounce) (millions) (%) (millions) (years)
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$1600 $207.6 73.70% $324.8 1.3
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$1400 $153.9 58.34% $257.1 1.6
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$1250 $113.6 46.45% $206.3 2.0
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$1000 $46.5 24.81% $121.6 3.3
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$900 $19.6 14.46% $87.7 4.3
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PRODUCTION COSTS:
Including services, maintenance, camp, total costs per tonne of ore were estimated at $12.75 per tonne, including a 12% contingency.
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Description $ per tonne
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Mining $2.44
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Processing $7.38
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G&A $1.58
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Contingencies $1.35
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Total OPEX $12.75
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CAPITAL COSTS:
Capital costs were estimated on the basis of budget quotes for major equipments and the use of local contractors in Mali for fabrication and construction.
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Description $
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Mining equipment 8,341,645
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Concentrator 26,042,331
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Infrastructure and services 8,272,260
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EPCM 5,118,748
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Contingencies 5,147,189
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Total Capex 52,922,173
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Mining, production and plant feed
The project was estimated on the basis of a 5,200 tonnes per day feed rate to the concentrator. No blasting is required for extraction as only the first layer of approximately 70-80 meters is mined in saprolite. Approximately 12% of the saprolite feed needs to be crushed and fed to the ball mill to achieve P 80 of minus 150 micron. The remaining ore is fed directly to cyanide leach.
Bumigeme recommends that Robex consider minor capital complementary addition to the project to further improve its flexibility. The addition of a gravity circuit where 15-20% of gold could be recovered would result in better leach conditions on the remaining fraction of feed and the potential to increase capacity from 5,200 tonnes per day to 6,000 tonnes per day.
The addition of a thickener would also result in a larger volume of water being recovered and recycled to process and a second thickener and set of cyclones prior to cyanide leach would ensure better control of pulp density. These capital cost additions would be fully justified and complementary to the initial plant on the basis of expanded capacity to 6,000 tonnes per day. Robex has given a mandate to Bumigeme to prepare an addendum to that effect.
Mineral resources and reserves
The Nampala exploration program was carried out under the supervision of Mr. Jacques Marchand P. Eng Geology. Met-Chem reviewed the work, data and assays and agreed with the estimate of the resources used in the preparation of the mineral reserves. Mr Marchand is an Independant Qualified Person (QP) as defined under NI 43-101.
Nampala mineral resource (measured and indicated)(i)
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Cut-off Tonnes AU grade Contained Au
Grade gpt Au (millions) g/t (Troy ounce) Type
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0.3 2.67 0.48 41 103 Overburden
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0.3 15.15 0.71 347 997 Saprolite
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0.3 17.82 0.68 389 100 Total
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0.4 1.55 0.57 28 538 Overburden
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0.4 12.72 0.78 320 474 Saprolite
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0.4 14.27 0.76 349 012 Total
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(i) It should be noted that a recent new measured and indicated resources update confirmed more than 523,000.oz gold in oxide at a 0.3 g/t cut-off (announced in press release dated September 20, 2011)
MINERAL RESERVES:
The mineral reserve is the portion of the measured and indicated mineral resource that is contained within the final pit design and has recovered metal values that allow economic treatment. This mineral reserve estimate contained in this feasibility study was prepared by MetChem.
Mineral Reserve (0.3 g/t cut-off)
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MT AU grade
Type (millions) (g/t)
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Proven 12.17 0.77
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Probable 5.15 0.55
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Total 17.35 0.70
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Waste 9.5
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Strip ratio 0.55:1
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MINE PLAN:
Ore is mined over a (10) ten year period producing 345,410 ounces of gold assuming 88% recovery at the mill. Mining rate is 5,200 tonnes per day over 350 days for a total of 1.8 MT per year. Waste to ore ratio is 0.55 w/o. During the first 8 years of operation, a total of 2.75 MT of low grade at 0.35 g/t is stockpiled for treatment during the last two years (years 9 and 10).
No blasting is required during the (10) ten year period as only the saprolite and cover are mined out. This has the advantages of limiting the number of equipment on site. Production of ore and waste can be accomplished with only one bulldozer, one 4 meter cube shovel and one 4 meter cube payloader. Transport of ore and waste will be done by 5 trucks of 41 tonnes capacity. Mining costs per tonne of ore (including waste) is estimated at $ 2.44 / tonne ore.
MILLING: The final flow sheet was designed based on results from SGS Lakefield facilities and Acme in Vancouver. The CIL mill will operate 24 hours / day for 350 days/year and a 90% availability.
Only 12% of the feed needs to be crushed and processed through a ball mill. The balance is screened off and will be fed directly to the leach circuit, which requires P80 minus 150 microns (100 mesh) material sizing. Screening capacity was designed for 300 tonnes per hour to ensure spare capacities. Ball mill capacity is based on a work index of 13 kw-hr / tonne.
Residence time in leach is at 30 hours. At a later stage, Robex may consider the addition of another tank to increase leach time if on-going metallurgical work demonstrate the possibility of gain in recoveries above 88%. The CIL circuit design is as follows:
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Circuit CIL Unit Criteria
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Feed Tph 230
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Grade g/t 0,70
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% solids % 42
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Granulometry micron 80%-150 microns
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Recovery % 89,7
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Residence time Hr 30
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Liquids reject g/t 0,021
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Solids reject g/t 0.117
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Carbon g/l 10
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Carbon Load g/t 3500
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Transfer rate of carbon tpj 1.2
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Time for carbon transfer H 3
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Number of monthly elution 20
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Carbon is to be regenerated on site and gold is recovered by plating on steel cathodes. The steel cathodes plated with gold are removed at intervals to be mixed with fluxes and fed to a melting furnace for Dore production. Reagent consumption for cyanide and lime is low as demonstrated by SGS and Acme with 0.43 kgm CN/t and 0.5 kgm / t respectively. Mill operating costs are estimated at $7.98 / tonnes with power generation representing the highest component.
Engineering Services:
Bumigeme is a metallurgical and engineering firm involved in various projects in western Africa and is presently involved in the construction of a gold project in Mali. Mr. Jacques Marchand has 30 years experience in Africa and has completed various mandates. He is the QP person on the mineral resources.
Met-Chem is based in Montreal and was involved in the review of the geological model and was responsible for the mine plan design, including mineral reserve, equipment selection and costing. Met-Chem is recognized for its work in Africa and worldwide.
An NI 43-101 complement independent technological report will be filed on SEDAR within a few weeks.
For more information about the Nampala deposit and to access the corporate presentation, please visit: www.robexgold.com
The resources information of this release as well as the results set out have been verified by Jacques Marchand, P.Eng. P.Geo, and an independent Qualified Person.
This press release contains statements that may constitute 'forward-looking information' or 'forward-looking statements' as set out within the context of security law. This forward-looking information is subject to many risks and uncertainties, some of which are beyond Robex Inc.'s ('Robex') control. The actual results or conclusions may differ considerably from those that have been set out, or intimated, in this forward-looking information. There are many factors which may cause such disparity, especially the instability of metal market prices, the results of fluctuations in foreign currency exchange rates or in interest rates, poorly estimated reserves, environmental risks (stricter regulations), unforeseen geological situations, unfavorable extraction conditions, political risks brought on by mining in developing countries, regulatory and governmental policy changes (laws and policies), failure to obtain the requisite permits and approvals from government bodies, or any other risk relating to mining and development. There is no guarantee that the circumstances anticipated in this forward-looking information will occur, or if they do occur, how they will benefit Robex. The forward-looking information is based on the estimates and opinions of Robex's management at the time of the publication of the information and Robex does not assume any obligation to make public updates or modifications to any of the forward-looking statements, whether as a result of new information, future events, or any other cause, except if it is required by securities laws.
Neither TSX Venture Exchange nor the regulatory service provider (as the term is defined in TSX Venture Exchange's policies) accepts any liability of any kind as to the authenticity or accuracy of this release.
Contacts:
Investor relations
Andre Gagne
President and Chief Executive Officer
418-527-5023
a.gagne@robexgold.com
Skype: andregagne11
Frederic Berard
Vice President
HKDP Communications and Public Affairs
514 395-0375, extension 259