Positive feasibility study for Moto Gold project

Vancouver – There may be a new mine on the horizon for the Democratic Republic of the Congo (DRC), as a feasibility study gave a green light to Moto Goldmine‘s (MGL-T) Moto Gold project.

The mine would process 4.5 million tonnes annually for 8.5 years to produce a total of 3.9 million oz. gold from a mineral reserve of 37.8 million tonnes grading 3.2 grams gold per tonne. The project would produce 400,000 oz. gold each year at an average operating cash cost of US$294 per oz. produced. Project economics were calculated using a gold price of US$600 per oz.

Capital and infrastructure costs come in at US$483 million. That includes a US$78 million mining fleet, US$47 as a construction contingency, and a US$80 million hydroelectric power station that would provide 86% of the project’s annual power requirements. Installed diesel generators would supplement the hydroelectric power supply during the dry season.

Initial capital costs could be recovered in 4.5 years; payback fall to 3 years using a gold price of US$750 per oz.

The study was based on the project’s measured and indicated resources, which total 77.8 million tonnes grading 2.8 grams gold. Not included were the inferred resources, which add 98.9 million tonnes of 3.8 grams gold.

The project, which sits in northeast of the DRC, would encompass no fewer than six open pits feeding one mill. The Moto Group is developing an exploitation plan that includes high-grade underground mining as well as expansion to the planned open pits.

Metallurgical testwork showed a basic flowsheet, incorporating primary crushing and SAG milling such that 80% pass 106 microns followed by a carbon-in-leach (CIL) circuit, yields optimum recovery for oxide ores. Transition and fresh ores will use the same circuit followed by flotation; the concentrate would be reground and leached in a dedicated CIL circuit.

It is a joint venture project. Moto’s wholly owned subsidiary Border Energy holds 60%, state-run L’Office des Mines d’Or de Kilo-Moto holds 30%, and the remaining 10% is held by Belgian Orgaman.

In addition to the costs of the pre-feasibility study, the Moto Group spent more than US$5 million over the last 15 months to fund the feasibility study, which among other things funded a drilling program consisting of over 600 holes totaling 75,000 metres. Total project expenditures sit at over US$13 million.

Moto’s share price fell 30 or 10% on news of the feasibility study, closing at $2.76 on small volume. The company has a 52-week trading range of $2.30 to $7.97 and has 62.9 million shares issued.